During the 23 July national election in Cambodia, much attention was paid to the ruling Cambodian Peoples’ Party and its relationship with China vis-a-vis the West. Yet, with India now being the largest market in terms of population and poised to be the second-largest economy by 2075, it is time for Cambodia to strategically embrace the biggest democracy to diversify its long-term political and economic interests and reduce its dependence on China and the West.
Like many Southeast Asian countries, Cambodia sits on the nexus between China and the West. China is Cambodia’s largest investor and donor that, has spurred the latter’s economic growth. Due to this dependence and the tension over the reported Chinese naval base in Cambodia, Phnom Penh has a rocky relationship with the West. Yet, the United States and the European Union are the largest export markets for Cambodia, particularly for garment and agricultural products. Since India is an emerging power, Cambodia should hedge by engaging India more to reduce the geopolitical tension and to attract more investment in sectors that are key to sustained growth. Strengthened ties with India would provide alternative investment and export options for Cambodia, hence reducing its reliance on China and the West.