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Laos invites FDI in Key Sectors from India

New Delhi, November 14, 2006

India-Laos trade has picked up steadily. the time is now ripe to strengthen trade and investment relations bringing the specialities of both the countries under a common umbrella. At a Luncheon meeting in New Delhi, Vice President of Foreign Affairs of the Lao PDR, HE Phongsavath Boupha said Laos wants Indian investors to set up businesses in Laos, with the possibility of 100% FDI possible.

H E Boupha on an official "sensitization" tour to the European countries aims at announcing the missions of Lao Government's Sixth-Five Year Plans that focusses strongly on socio-economic development and substantial poverty reduction by the year 2010 in the country. These hopes bring him to India to encourage Indian investors to invest in the booming industry and agriculture of Laos.

"Laos is planning a round table conference on public investment programme, trade and private sector, in order to mobilize funds for its social economy. We expect around 70 percent of the investment requirement in Laos to come from the private sector," said Mr. Boupha.

Though landlocked, Laos is surrounded by China, Vietnam, Thailand, Cambodia and Myanmar; and by developing strong relationships with its neighbors; it has on offer a market of almost 250 million for Indian investors to tap.

It is rich in natural resources such as water (for hydro-power generation), mineral resources, especially tin, gypsum and iron, gold & copper mines and rice production, which make it a lucrative destination for investments from all corners of the world. Registering an upsurge in Laos business and overall growth, Laos is looking forward to a 7.5-8 % growth in the near future for which it requires sizeable number of foreign investors.

India's bilateral trade with Laos has witnessed a quantum growth by over a hundred per cent since the last year to reach almost US$ 6 million in 2006. Director General of Planning Department, Planning and Investment Commission of Laos, Dr. Khamliane Pholsena said that Laos has abundant land, cheap labour and natural resources. It expects to receive in return, capital and technology from its foreign investors.

Mr. Pholsena said Indian entrepreneurs could invest in the power sector, mining, food processing and setting up of sugar and rice mills. There is also scope for business in the wood and timber industry, pharmaceuticals, light engineering sector, IT, agro- processing and tourism.

India has had age-old cultural as well as political ties with Laos. Keeping in sync with this The Government of India has extended a credit of US$ 2 million to the Lao PDR, and an additional soft loan of US$ 5 million for upgrading the irrigation management system.

India and Laos have also signed an agreement on Joint Commision in areas like agriculture and irrigation, science & technology, economic cooperation and trade, defence & consular matters and Exemption of Visa Requirement for Holders of Diplomatic and Official Passports.

The most important commodities of India's exports to Laos, in terms of value, are machinery & mechanical appliances (especially irrigation pumps), drugs and pharmaceuticals, plastics, lac, gum, resin & other vegetable extracts, processed vegetables & fruits, articles of iron & steel, paints & varnishes, textiles, sports & electrical goods.

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