Taking forward its ‘Act East’ policy, the BJP government is finalising the mechanism for setting up special purpose vehicles by Export Import Bank of India and private companies to invest in manufacturing hubs in Cambodia, Myanmar, Laos and Vietnam (CMLV). “We are hoping to roll out the mechanism in the next three-four months,” Commerce Secretary Rajeev Kher told reporters on the sidelines of an event in New Delhi on Monday.
The bigger idea behind investing in CMLV countries is not only to tap these markets but also larger markets like the US with which the group has entered into trade pacts such as the TPP, the secretary said.
The mechanism, which will operate through the SPV, will have a project development facility that will be funded by the government. The project development facility will invest in a country in hubs such as special economic zones (SEZs). “It will invest in the SEZ, develop it and then allocate it to business entities in India against payment,” Kher explained.
He said that the government was making investments to begin with as the private sector was not confident about taking the first step. Finance Minister Arun Jaitley had announced in his budget speech that the government will help in setting up manufacturing hubs in CMLV "The 'Act East' policy of the government of India endeavours to cultivate extensive economic and strategic relations in Southeast Asia. A project development company through separate special purpose vehicles will set up manufacturing hubs in CMLV," Jaitley had said.