ASEAN Represents Significant Business Opportunity For Indian Startups
India signed a free trade agreement with ASEAN in 2009. This is know as the ASEAN–India Free Trade Area (AIFTA). Since then India has been strengthening it's relationship with ASEAN which has got a further boost with the 'Act East' policy of the current government.
This article is triggered by the 5th India – ASEAN Economic Forum event that the author attended recently. ASEA is the Association of South East Asian Nations and comprises of 10 countries. These are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philipines, Singapore, Thailand and Vietnam. ASEAN was started in 1967 by Indonesia, Malaysia, Philippines, Singapore, and Thailand and was later expanded to include Brunei, Cambodia, Laos, Myanmar, and Vietnam. ASEAN combine has a total population of over 622 million people and a GDP of over US $ 2.6 trillion. As a single entity it is the seventh largest economy of the world. Indeed the ASEAN Economic Community has been established in December 2015 along the lines of the European Union.
India signed a free trade agreement with ASEAN in 2009. This is know as the ASEAN–India Free Trade Area (AIFTA). Since then India has been strengthening it's relationship with ASEAN which has got a further boost with the 'Act East' policy of the current government. Trade between India and ASEAN stood at US $ 65 billion as of 2015-16. ASEAN represents significant business opportunity for India and there is no reason why startups in growth stage cannot take advantage of this. It is heartening to note that this opportunity has now expanded with the signing of the ASEAN-India Agreements on Trade in Service and Investments in July 2015.
From a market point of view India has much in common with the ASEAN region apart from historical and cultural links. Here are are few such similarities.
– Large young and tech savvy population.
– Growing middle class.
– High mobile penetration.
– Growing internet penetration.
– High growth in low cost airline traffic.
– High growth in app based cab services.
– High growth in eCommerce.
This means that tech based solutions developed for India are equally relevant for ASEAN with some localization. A recent report released by Temasek and Google estimates that ASEAN's internet economy could be worth US $ 200 billion within 10 years.
Here are some suggestions for entrepreneurs looking to explore the ASEAN market.
– Build relationships with local partners with complementary needs in terms of market access and technology. Angel list ( https://angel.co ) is a good place to start.
– Participate in trade shows in target countries. It is not very expensive and you can get partial subsidy from government schemes.
– Export promotion councils, chambers of commerce and Exim bank can also provide support.
– Lot of export is now happening through eCommerce route. This has leveled the playing field between the big and small players.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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