M i F d ith ASEAN INDIA C ti itMoving Forward with ASEAN-INDIA Connectivity

Financing and Supporting Mechanism:Financing and Supporting Mechanism: Views from Exim Bank

November November 2727, , 20132013BangkokBangkokBangkokBangkok

India – ASEAN Cooperation

ASEAN is the second-largest trade partner of India after EU-27

Closer linkages with ASEAN as part of India’s ‘Look East Policy’Closer linkages with ASEAN as part of India s Look East Policy

India became a member of the ASEAN Regional Forum (ARF) in 1996. The bilateralcooperation reached a new height when India-ASEAN relationship was upgraded to thesummit level in Nov 2001

In October 2003, a Framework Agreement on Comprehensive Economic Cooperation wassigned between ASEAN and India, covering Free Trade Agreements (FTA) in goods,services and investment, as well as areas of economic cooperation

The agreement for freeing trade in goods has already been implemented with theASEAN on January 01, 2010

The India-ASEAN FTA would eliminate tariffs for about 4000 products (which includel t i h i l hi d t til ) t f hi h d ti f 3200 d t illelectronics, chemicals, machinery and textiles) out of which duties for 3200 products will

be reduced by December 2013, while duties on the remaining 800 products will be broughtdown to zero or near zero levels by December 2016

India-Malaysia Comprehensive Economic Cooperation Agreement came into force from

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India Malaysia Comprehensive Economic Cooperation Agreement came into force fromJuly 01, 2011. This is India’s second bilateral CECA in ASEAN region, after Singapore

India‐ASEAN Trade Relations

Robust Trends in Bilateral Trade  (US$ bn)

Exports Imports Total Trade

India – ASEAN trade flowsRise in total Indo‐ASEAN trade underlined bybuoyancy in both exports and imports

56.2

78.975.9

Exports Imports Total Trade

India’s trade with ASEAN accounted for asignificant 9.6% of India’s total trade in2012‐13

36.733.0

30.6

42.2 42.9

30.7

39.145.3 43.9

56.2

India’s exports to ASEAN have grown at afive‐year CAGR of 14.5%, while imports at15.3%

12.616.4

19.1 18.1

25.6

18.122.7

26.2 25.830.6

India’s trade deficit with ASEAN stood at US$9.9 bn in 2012‐13

The India ASEAN FTA is expected to further

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2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

The India‐ASEAN FTA is expected to furtherprovide the necessary impetus for boostingtrade relationship

Source: Ministry of Commerce & Industry, Government of India

Major Trade Partner in ASEAN Region

Export Partners in ASEAN (US$ mn) Import Partners in ASEAN (US$ mn)

4Source: Ministry of Commerce & Industry, Government of India

India‐ASEAN Trade & Investment Opportunities

ASEAN’s importance to India is not only for its large market (combined GDPsize of US$ 2305.5 billion in 2012), but also for their strategic location, in thel i hb h d f I diclose neighborhood of India.

Potential for Investment: Growing infrastructure needs in the ASEAN region,i ll th M k t i ff h t ti l G t t fespecially the Mekong countries offers huge potential. Greater amount of

investments are needed in the transport sector, mostly road projects.Improved infrastructure connecting these economies would help in realizationof the benefits of trade facilitation effortsof the benefits of trade facilitation efforts.

Border Trade between India and ASEAN, especially the CLMV countries(through Myanmar) has special significance Immense potential due to the(through Myanmar) has special significance. Immense potential due to thegeographical continuity with India and Myanmar sharing common border inthe North Eastern Region – with 4 states, namely, Mizoram, Manipur,Nagaland and Arunachal Pradesh

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Nagaland and Arunachal Pradesh.

India‐ASEAN Trade & Investment Opportunities

India’s trade with the Mekong Countries has increased over seven-fold, from US$ 2.1 bn in 2003 to US$ 16.5 bn in 2012. India’s share infold, from US$ 2.1 bn in 2003 to US$ 16.5 bn in 2012. India s share intheir global trade, however, was only 2.1% in 2012, which shows thepotential for increasing trade with the region.

Increased trade & investment with ASEAN is of immense importancefrom the perspective of India’s international trade and regionalintegrationintegration.

High potential for enhancing bilateral trade relations. Improvedconnectivity and trade facilitation can enhance the sameconnectivity and trade facilitation can enhance the same.

HOW CAN EXIM BANK SUPPORT?

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Exim Bank of India

India’s premier Export Finance Institution

Established on 01 January 1982 under the Export-Import Bank of IndiaAct, 1981 for the purpose of financing, facilitating and promotingforeign trade in India.foreign trade in India.

Wholly owned by Government of India

Board of Directors appointed by Government of India; comprises topofficials from key GOI Ministries, RBI, ECGC, commercial banks,professionalsp o ess o a s

Headquartered in Mumbai, we have 10 Domestic Offices in India and8 overseas Offices (Addis Ababa, Dakar, Dubai, Johannesburg,

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( , , , g,London, Singapore, Washington and Myanmar).

Enhancing India–ASEAN Connectivity: Support Mechanism 

South East Asia region has been a focus region for Exim Bank andSouth East Asia region has been a focus region for Exim Bank, andthus forms a critical component of the Exim Bank’s strategy topromote and support two-way trade and investment

Exim Bank provides comprehensive range of financing ,advisory andsupport programmes to promote and facilitate India’s trade andinvestment relations with the ASEAN Countriesinvestment relations with the ASEAN Countries.

Exim Bank plays the role of a catalyst for investment in ASEAN regionby extending loans to Indian companies for investment in the regionby extending loans to Indian companies for investment in the regionand entering into various collaborative programmes.

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Financing Programmes

Financing Programmes (Various Currencies)

Export Credit Import Credit Loans for Exporting Units

Medium / Long Term Short Term Import Loan for capital goods

Term Loans for expansion/ diversification / new projects/ export product development/

Lines of Credit

Supplier’s Credit

Pre / Post Shipment

Credit Bulk Import Loan for Raw Materials

export product development/ export marketing / research &

development

Term Loans for overseas equity Credit

Buyer’s Credit

Term Loans for overseas equity investment

Direct equity stake in Indian/

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Direct equity stake in Indian/ Overseas ventures of exporting

companies

Key Lending Programmes / Support Mechanism

Sovereign Lending Programs

Project Exports Financing

Overseas Investment Finance (OIF)

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Sovereign Lending Programs

Lines of Credit  (LOC) Programme

A Li f C dit (LOC) i fi i h i th h hi h E i B k t d t fA Line of Credit (LOC) is a financing mechanism through which Exim Bank extends support forexport of projects, equipment, goods and services from India.

LOC extended to Foreign Governments or their nominated agencies such as Central Banks, stateowned commercial banks and para-statal organizationsowned commercial banks and para statal organizations.

LOCs enable buyers in those countries to import developmental and infrastructuralprojects, equipment, goods and services from India, on deferred credit terms

Credit offered is 100% of Contract Value Credit tenors could range upto 20 yearsCredit offered is 100% of Contract Value. Credit tenors could range upto 20 years

LOCs are extended at the behest of Govt. of India and Exim Bank also extends its own LOCs toregional development banks, overseas financial institutions, commercials banks etc.

Status of LOCsNo. of LOCs operative : 179No of countries covered : 75

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No. of countries covered : 75Total amount of LOCs sanctioned : USD 9.67 billion

Sovereign Lending Programs

Lines of Credit operative in ASEAN

Borrower Key Sectors/Projects covered

Cambodia Electricity transmission line; Water development projects

Lao PDR Electricity Transmission Line project; Irrigation Project;Hydropower Projects

M R il P j t / d ti f Y M d lMyanmar Railway Projects/ upgradation of Yangon-MandalayRailway Systems, upgradation and maintenance ofworkshops; Refinery Projects; Manufacturing PlantProjects; Transmission Line project; PetrochemicalsProjects; Transmission Line project; Petrochemicals

Vietnam Hydro Power Project

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Sovereign Lending Programs

Buyer’s Credit under NEIA

Exim Bank has introduced this product in conjunction with ECGC under GOI’sNational Export Insurance Account (NEIA)p ( )

Bank finances and facilitates project exports from India by way of extendingcredit facility to overseas sovereign governments and government ownedy g g gentities for import of goods and services from India on deferred credit terms.

Facility to cover 85% of contract value. Credit period upto 15 years may beac ty to co e 85% o co t act a ue C ed t pe od upto 5 yea s ay beconsidered.

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Exim Bank ‐ Supporting Overseas Projects

Exim Bank plays a pivotal role in promoting & financing overseas projects.

Projects and services, broadly categorised into: Civil engineeringj y g g gconstruction projects, Turnkey projects, Consultancy services, and Supplycontracts on deferred payment terms

Exim Bank extends funded & non funded facilities towards financing projectExim Bank extends funded & non-funded facilities towards financing projectexports from India.

Over the past two decades, increasing number of contracts have beenp , gsecured by Indian companies in Asia, Sub Saharan Africa, CIS, LatinAmerica.

S h j t l t th ff t f th h t t t iSuch projects supplement the efforts of the host country governments inachieving their developmental objectives.

Projects Under Execution with Exim Bank’s Support (As on March 31 2013)

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Projects Under Execution with Exim Bank s Support (As on March 31, 2013)

No. of Contracts : 293 Value of Contracts : US$ 21.37 billion

No. of Countries : 69 No of Indian companies : 90

Ongoing Project Exports Contracts: ASEAN

Exim Banks has supported a number of Indian companies, by way of funded and non-funded facilities for Projects in ASEAN Region. Illustrative list below:j g

Country Key Sectors/Projects covered

Cambodia Electricity transmission line; Water development projectsy p p j

LAO PDR Electricity Transmission Line project; Irrigation Project; Hydro electric projects

M l i R il P j t G i li T l i tMalaysia Railway Project, Gas pipeline, Telecom equipment

Myanmar Engineering & Construction, Oil & Gas, transmission line, supply of equipment

Singapore Offshore drilling rigs, tunnel ventilation & environmental control systems

Thailand EPC Contract for platform compression facilities, EPC for Gas pipeline

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Vietnam Hydropower project

Promoting Investment – OIF Programme

Comprehensive assistancePre investment advisory services

Finance available for:Greenfield projects;

Pre investment advisory servicesFinance through debt and equity

Greenfield projects;Brownfield expansion;Overseas acquisitions directly or through special purpose vehicles

Direct equity participation in Indian ventures abroadDirect equity participation in Indian ventures abroad.Joint investments by Indian and overseas company in third country markets.As on March 31, 2013, Exim Bank has provided finance to 436 ventures set up bymore than 352 companies in 71 countriesmore than 352 companies in 71 countries.In ASEAN region, Exim Bank has funded overseas ventures of Indian Companies inIndonesia, Malaysia, Myanmar, Singapore and Vietnam.Investments sectors supported include coal mine acquisitions textiles shipping

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Investments sectors supported include coal mine acquisitions, textiles, shipping,paper, Coffee, carbon black, abrasives, etc.

Other Support Mechanisms

Institutional Linkages : Exim Bank has a wide network of alliances withfinancial institutions and investment promotion agencies, market promotionp g pboards and service providers across the globe for assisting externallyoriented Indian companies in their quest for globalization.

Exim Bank as a Consultant: Exim Bank is well positioned to share itsExim Bank as a Consultant: Exim Bank is well positioned to share itsexperience and expertise in the fields of capacity creation, institutionalstrengthening, export development and export capability creation. The Bankis thus well placed to provide a range of technical assistance in these fields.p p g

Asian Exim Bank Forum: With a view to enhance cooperation and forge astronger link among its member institutions, the first meeting of Asian CreditExport Agencies (ECAs) was held in India in 1996 at the initiative of EximExport Agencies (ECAs) was held in India in 1996 at the initiative of EximBank , which led to the formation of the Asian ECA Forum. Memberscomprise ECAs from Australia, China, India, Indonesia, Japan, Korea,Malaysia, Philippines, Thailand and Vietnam. ADB is a permanent

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Malaysia, Philippines, Thailand and Vietnam. ADB is a permanentObserver.

Other Support Mechanisms

Research Studies: Exim Bank carries out research on areas related tobilateral trade and investment, sector/product/country and regional studies, asp y galso policy issues related to the external sector with a view to enhancingcompetitiveness of Indian exporters. The published research studies relatedto ASEAN include:ASEAN Countries: A Study of India’s Trade and Investment PotentialBIMSTEC Initiative: A Study of India’s Trade and Investment Potential with Select Asian CountriesEnhancing India-Myanmar Trade and Investment Relations: A Brief AnalysisIndia’s Trade and Investment Relations with Cambodia, Lao PDR, Myanmar, Vietnam (CLMV): Enhancing Economic Cooperation

Representative Offices: Exim Bank has two representative offices in theASEAN region - Singapore and Yangon. The representative offices play arole in facilitating India’s economic cooperation with ASEAN countries

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Moving Forward….g

Enhance infrastructure connectivity construction: Connectivity of railways,roads sea routes telecommunication networks oil & gas pipelines in theroads, sea routes, telecommunication networks, oil & gas pipelines in theregion.

Increased participation of Indian Companies in various Infrastructureconnectivity construction.

Development of roads and railway networks to connect India with ASEANcountries will provide an avenue for cross border trade and expedite economiccountries will provide an avenue for cross-border trade and expedite economicdevelopment in this region

Increased credit support to connectivity projects: Explore multilateral financingpp y p j p gcooperation mechanisms towards funding gaps, provide direct financingsupport, value added services, project feasibility studies, consultancy etc.;Companies may adopt various approaches including PPP, BOT, etc.

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Moving Forward….g

Facilitate Trade and investment cooperation's through mechanisms such asthe Asian Exim Bank Forum. ECAs to build close cooperation through jointp g jfinancing/guaranteeing projects.

Strengthen Knowledge sharing activities amongst ECAs in the region,information exchange, best practices etc.

Closely work with Multilateral Institutions: Co-financing of Projects / EximBank holds Business Opportunities Seminars with World Bank/ADB toBank holds Business Opportunities Seminars with World Bank/ADB tofacilitate and encourage more Indian companies to actively bid formultilateral funded projects overseas / Consultancy Assignments

Exim Bank ready to join hands with you towards greater contribution toconnectivity and increase trade & investment with ASEAN.

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THANK YOUMeghana Joglekar

Resident RepresentativeExport Import Bank of IndiaExport-Import Bank of India20, Collyer Quay, #10-02,

Singapore 049319Tel: (65) 65326464/5423( )

Email: meghanajoglekar@eximbankindia.in

Jasmeet Singh NarulaResident RepresentativeResident Representative

Export-Import Bank of India 54-A |Ground Floor | Boyarnyunt Street |

Yangon | MyanmarYangon | MyanmarTel : +95 1 389520

Email: jasmeet.n@eximbankindia.in

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WebsiteWebsitewww.eximbankindia.inwww.eximbankindia.in