As part of Asean’s goal of easing trade within the region, Cambodia has agreed to ratify a free trade agreement with India in legislation that will slash duties on hundred of goods including garments, rice and rubber.
Sok Sopheak, director of the Commerce Ministry’s department of international trade, said the ministry was drafting the agreement, which will be delivered to the Council of Ministers “sometime soon.”
“This agreement covers a lot of items,” Mr Sopheak said. “We will see whether we can diversify.”
Mr Sopheak added that under the agreement about 90 percent of all items produced in Cambodia would attain duty-free access to India, hopefully helping Cambodia to boost its minimal export base with India, which to date is only made up of a handful of items.
Saurav Ray, first secretary at the Indian Embassy in Phnom Penh, said that the government had informed the embassy that the agreement would be implemented in October when the National Assembly reconvenes.
“There is good demand in India for importing Cambodian products,” said Mr Ray, highlighting palm oil, cashew nuts and lentils as agricultural products for which India has increasing demand.
He added that India was also looking to outside nations to fulfill domestic demand for spices such as turmeric.
Similar trade agreements with countries in the region such as Japan have already resulted in a sizeable increase of trade activity, especially for apparel items.
Cambodian exports to India increased by 86 percent to $5.05 million during the course of 2009, according to data from the Indian Ministry of Commerce, while Indian exports to Cambodia fell by 2.88 percent to $45.54 million.
A statement on the ministry’s website posted on Friday said that ministers had “encouraged the full implementation of the Asean-India Trade in Goods Agreement by all countries within 2010” during a meeting with Asean officials in Vietnam last week.
Indian President Pratibha Devisingh Patil is to visit Cambodia on Sept 13.
India has steadily been increasing its presence in Cambodia. In May last year, the state-owned Bank of India opened its first Cambodian branch in Phnom Penh and negotiations are currently taking place to launch a direct flight between the two countries.