Brief on India - Laos Bilateral Relations


Untitled Document

India has enjoyed longstanding, friendly and mutually supportive relations with Lao People’s Democratic Republic (PDR). This relationship is based upon profound historical and civilizational foundations. Lao PDR admires the historic role played by India in Indochina towards promoting national liberation movements, the independence of colonized countries and the safeguarding of the newly acquired freedom. Pandit Nehru displayed considerable sensitivity and support for Laos when the latter found itself torn between foreign intervention, cold-war machinations and internal conflict. He paid a visit to Laos in 1954, which was later reciprocated by Lao leaders. The role played by India as Chairman of the International Commission for Supervision and Control (ICSC) on Indo-China is still appreciated and remembered with gratitude by the Lao leadership.

Political:
2. There exist excellent political relations between India and Lao PDR. On account of this, the Lao PDR has been supportive of major issues of regional and international concerns to India, including our claim for permanent membership of the UN Security Council. At the 59th session of the UNGA, Deputy Prime Minister and Minister of Foreign Affairs Somsavat Lengsavad, Leader of the Lao delegation, clearly articulated Lao PDR’s support for an expanded UNSC that would include India. In 2010, Laos supported India’s candidatures for a non-permanent seat on the UN Security Council for the term 2011-2013.

Diplomatic Relations:
3. Diplomatic relations between Government of India and the Government of Laos were established in February 1956. The 55th Anniversary of the establishment of diplomatic relations between the two countries was celebrated during February 2011- February 2012. The First Foreign Office Consultations between India and Lao PDR were held in Vientiane on May 2, 2012. The Indian side was led by Shri Sanjay Singh, Secretary (East) and the Laos side was led by Mr. Bounkeut Sangsomsak, Vice Minister in the Ministry of Foreign Affairs of Lao PDR.

4. Since the establishment of diplomatic relations between India and Laos, a number of high-level visits have taken place between the two countries which include visit by the first Prime Minister of India, Pandit Jawahar Lal Nehru to Laos in 1954 and by the first President of India, Dr. Rajendra Prasad in 1956. Shri Atal Behari Vajpayee, the then Prime Minister of India visited Laos in 2002. Dr. Manmohan Singh, Prime Minister of India visited Laos in 2004. Smt. Pratibha Devisingh Patil, the then President of India, paid a State visit to Laos in September 2010. Minister of Parliamentary Affairs and Water Resources Shri Pawan Kumar Bansal visited Laos in June, 2010. Shri Neiphu Rio, Chief Minister of Nagaland visited Laos in September 2010. Gen. V.K. Singh, Chief of Army Staff of India visited Laos in December 2011. Shri Salman Khurshid, External Affairs Minister of India visited Laos from November 4-7, 2012 to participate in the ASEM-9 Summit. Separately, he held bilateral meetings with H.E. Dr. Thongloun Sisoulith, Deputy Prime Minister and Foreign Minister as well as H.E. Mr. Thongsing Thammavong, Prime Minister of Lao PDR. Dr. K. Chiranjeevi, Minister of State for Tourism visited Laos to attend the ASEAN-India Tourism Ministers’ Meeting held in Vientiane on January 21, 2013.

5. High level visits from La PDR include the visit of Prince Souphanouvong, commonly known as the Red Prince, who visited India in 1975. In recent times, the President of the Lao PDR H.E. Mr. Choummaly Sayasone visited India in August 2008. A 15-member delegation led by the Deputy Prime and Minister of Foreign Affairs, H.E. Dr.Thongloun Sisoulith, participated in the 6th India-Lao Joint Commission Meeting held in Delhi during January 2010. Dr. Thongloun visited India once again in 2010. Minister of Finance H.E. Mr. Somdy Douangdy visited India for the India – LDCs Ministerial Meeting on “Harnessing the Positive Contribution of South-South Cooperation for Development of Least Developed Countries” in New Delhi in February 2011. Minister of Industry and Commerce H.E. Dr. Nam Viyaketh visited India for the India-ASEAN Fair and Business Conclave in March 2011. Assistant Minister of Foreign Affairs, Mr. Alounkeo Kittikhoun visited India in March 2011. H.E. Dr. Thongloun Sisoulith, Deputy Prime Minister and Foreign Minister visited India to attend the Mekong-Ganga Cooperation Ministerial Meeting in New Delhi on September 4, 2012. H.E. Dr. Ankhom Tounalom, Deputy Minister, Ministry of Natural Resources and Environment. participated in the ASEAN-India Environment Ministers’ Meeting in New Delhi on September 6-7, 2012. H.E. Mr. Viraphonh Viravong, Vice Minister for Energy and Mines attended the International Seminar on Energy Access held at New Delhi during October 9-10, 2012. H.E. Mr. Vilayvanh Phomkhe, Minister of Agriculture and Forestry led a 6-member delegation to attend the ASEAN-India Agriculture Ministers’ Meeting on October 17, 2012 in New Delhi. H.E. Dr. Nam Viyaketh, Minister of Industry and Commerce attended the 2nd ASEAIndia Business Forum held in New Delhi on December 18-19, 2013. H.E. Mr. Thongsing Thammavong attended the ASEAN-India Commemorative Summit held in New Delhi on December 20-21, 2013.

Economic and Commercial:
Agreements:
6. Lao PDR and India have signed several agreements over the past few years. These agreements lay down the essential framework for bilateral cooperation in matters relating to science, technology, economic cooperation and trade, as well as in defence and consular matters. Some recent agreements include:

    1. A Cultural Exchange Programme for the years 2011-13 was signed in 2010.

 

    1. An MOU was signed with the Ministry of Information and Culture in May 2007 for the restoration of the world heritage site at Vat Phu. The work on the project began in June 2009. India will spend US$ 4.1 million (Rs. 18.49 crores) on the project over an eight year period.
    1. Since 1994, under the Indian Technical and Economic Cooperation (ITEC) Agreement, an Indian Army Training Team conducts training for Lao defence personnel in English, Computers and Basic Tactics. The Indian team is the only foreign training team besides the Vietnamese and the Chinese.

 

(iv) An MoU on Agriculture Cooperation was signed in 2000. Under the MoU, a Biennial Working Plan is prepared for implementation.

Projects under Lines of Credit:
7. A number of projects have been supported through Indian Lines of Credit over the past few years. Some of the recent projects include:

    1. In June 2004, India provided a Line of Credit of US$ 10 million for a 115 KV Transmission Line from Ban-Na in Champassak to Attapeu. The project was completed in 2006.

(ii) In August 2008, during the visit of President Choummaly Sayasone, an agreement was signed to provide a US $ 33 million loan for 3 projects. WAPCOS is the project management consultant for these projects and Angelique International is the implementing agency. The three projects are:
(a) Supply of equipment for rural electrification worth US $ 4 million. This was completed in September 2009.
(b) The Paksong-Jiangxai-Bangyo transmission line project worth US $ 18 million. The project was commissioned on September 10, 2010 by the two Presidents.
(c) The Nam Song 7.5 MW hydropower project worth US $ 11 million. The project completed in October/November, 2012 and inaugurated in February, 2013.
(iii) A US $ 17.34 million loan agreed upon for the development of irrigation schemes in Champasak province, the agreement for which was signed in May 2009. M/s WAPCOS has developed the project. The project implementation is under progress.

    1. On September 13, 2010, a loan agreement between Exim Bank and the Ministry of Finance was signed in Vientiane in the presence of the two Presidents for a US $ 72.55 million loan for the following two projects: (i) 230 KV Double Circuit Transmission Line from Nabong to Thabok and sub stations worth US $ 34.68 million; and (ii) 15 MW Nam Boun 2 Hydropower Project worth US $ 37.86 million.

Foreign Direct Investment (FDI):
8. Indian entrepreneurs committed a combined US$ 950 million in plantation, iron ore and agar wood which made India the 7th largest investor from 22nd position in 2010-11. India now ranked 8th in FDI in Laos with total 33 projects and investments of US$ 161 million in 2011-12.

9. Some Major Indian investments include :
(i) Birla Lao Pulp and Plantation, established in June 2006, is committed to investing US $ 400 million in a Eucalyptus pulp and plantation project in Savannakhet province. This is the biggest Indian FDI in Laos. 13619 hectares have been planted in Savannakhet and Champasak provinces till Feb 2012. The company has spent US $ 31 million up to March 2012.


(ii) The Lao SPG CMC Mining Company Limited, a subsidiary of GIMPEX India, obtained a license for an iron ore mine in 2008, with a commitment to invest US $ 10 million, out of which US $ 7.7 million has been spent. This is a 200 hectare iron-ore mine at Ta En village, Viengxay district, Samneua province. As of March 21, 2011, the mine has produced 60,717 metric tonnes of iron-ore, of which 56,408 metric tonnes have been exported to China.


(iii) The HSMM Group has invested US $ 13.8 million in agarwood plantations and two factories in Vientiane and Xaysomboun, Vientiane province. It has a US $ 800,000 iron ore mine in Sekong province in partnership with Mineral Enterprises Limited, and a US $ 100,000 iron ore mine in Khammuan province.

Human Resource Development:
10. Under human resource development, the Government of India has been providing over 210 scholarships to Lao nationals through the Indian Technical and Economic Cooperation [150 slots], the TCS Colombo Plan [40 slots], the Mekong-Ganga Cooperation Scholarship Scheme [12 slots] and the General Cultural Scholarship Scheme [8 slots for higher studies]. So far, under ITEC, GOI has trained about 1000 Lao nationals.

11. The LIEDC (Lao-India Entrepreneurship Development Centre) was set up under India-ASEAN Fund and inaugurated by our EAM in Vientiane on 27 November, 2004, LIEDC trains Lao entrepreneurs for setting up small and medium scale business.

12. The LICELT [Lao India Centre for English Language Training] was set up in Vientiane on June 12, 2007 under the India-ASEAN Cooperation framework. The LICELT is one of our assistance projects in human resource development.

13. India set up an IT centre in Vientiane in November 2004, as well as a National Data Centre in May 2006. Ten Rural Telecommunication Centres were set up, seven in provinces and three in the Ministry of Health, the Prime Minister’s Office and the office of the Governor of Vientiane.

Bilateral Trade:
14. India’s bilateral trade with Laos was dramatically escalated to $37 million in 2009-10 from mere US$ 9.52 in 2008-09. The trade balance which had been overwhelmingly in favour of India turned towards Lao. This development stems primarily from India’s purchase of copper ores and concentrates of $19.7 million from Lao. India’s exports have increased on account of surge in sales of electrical and electronic equipment and pharma products to Lao. However, during 2010-11, the bilateral trade between two countries was again reduced to US$ 13.33 million with exports to Lao were US$ 13.11 million and imports by India were practically non-existent at US$ 0.22 million. In 2011-12 the total bilateral trade was US$ 104.50 with exports from India were US$ 14.97 million, while imports from Laos were US$ 89.53. According to the latest data released by Department of Commerce, GoI, the total bilateral trade in 2012-13 has now reached to US$ 167.49 million with exports from India at US$ 28.89 million, while imports from Laos at US$ 138.61.

India’s Trade with Lao PDR (in US$ million)

S. No.

Year

2009-2010

2010-2011

2011-2012

2012-2013

1.

EXPORT

16.93

13.11

14.97

28.88

2.

IMPORT

20.05

0.22

89.53

138.61

3.

TOTAL TRADE

36.98

13.33

104.50

167.49

4.

TRADE BALANCE

(-) 3.12

12.89

(-) 74.56

(-) 109.73

Source: Department of Commerce, Government of India.
15. Metals, ores, machinery, electronic equipment, pharmaceuticals and timber are the main products traded between India and Lao PDR.
16. In 2009, India has accorded the Duty Free Tariff Preference Scheme (DFTP) to Least Developed Countries including Lao PDR. The Scheme grants Laos duty free access to 94% of India’s total tariff lines.

Defence Cooperation:
17. Twenty-five TATA jeeps were gifted to the Lao National Army on January 21, 2003. 20 static line parachutes were presented to the Lao National Army on April 2, 2009.
18. A five-member Indian Army training team led by Captain Dhiraj Kumar conducted a three week training capsule on unexploded ordnance (UXO), mines and improvised explosive devices (IED) from February 22 to March 11, 2011. A three-week Second Intensive Training Capsule on ‘UXOs and Demining’ was conducted during February 12-March 7, 2012, by a five-member Indian Army team for Lao People’s Army.

ASEAN-India Framework:
19. On August 13, 2009 India and ASEAN signed the Trade in Goods Agreement. India and ASEAN have concluded Agreements on Trade in Services and Investment in December, 2012 in New Delhi. Lao PDR has participated in ASEAN-India Business Fairs held in New Delhi in 2011 and 2012.
20. A number of activities were organised by India under the ASEAN-India framework in 2012 to commemorate the 20 years of ASEAN-India relations and 10th anniversary of summit level partnership. The second ASEAN-India Car Rally in conjunction with marker events was also organised. Finally, to commemorate the event India-ASEAN Summit was held in New Delhi on 20-21 December, 2012, which was attended by Heads of States/Governments of all ten ASEAN members countries.

Indian Diaspora:
21. The 150-strong Indian community has grown in profile, particularly after the formation of the Indian Chamber of Commerce in the Lao PDR in September, 2010. The Indian community is engaged in jewellery trade, the restaurant and hotel industry, manufacturing, garments, mining, plantations and agarwood. A few members work for international organizations, multinationals, consulting organizations and private businesses. Kirloskar Brothers, the Aditya Birla Group, WAPCOS, Angelique International and Lao-SPG CMC Mining (P) Limited have offices in Lao PDR.




 
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