India&#**;s trade with Cambodia has grown from a minor diplomatic relationship into a fast-growing trade corridor. Many see it as a way for Indian companies to reduce their exposure to US tariffs. Bilateral trade rose more than ** per cent to $***.** million in ****–**. Trade in the April-June **** quarter alone increased **.** per cent year on year (YoY), according to India&#**;s commerce ministry. But there is an important catch. Cambodia faces the same US tariff pressure that Indian exporters are trying to avoid. This makes the idea of using Cambodia as a simple alternative route to the US much less attractive. The bigger opportunity, therefore, may not be in setting up production in Cambodia to bypass tariffs. It lies in selling more Indian products to Cambodia&#**;s growing market.
A ** per cent jump that means less than it looks
Cambodia is India&#**;s eighth-largest trading partner within ASEAN, but the trade volume is still very small. It accounts for just *.** per cent of India&#**;s $*** billion trade with the ASEAN bloc and is even smaller compared with India&#**;s overall global trade. The third meeting of the two countries&#**; Joint Working Group on Trade and Investment, held in Phnom Penh on August **, ****, did not result in any major trade deal. Instead, it opened up more opportunities for future cooperation. The two countries agreed to work towards an early Bilateral Investment Treaty, organise an “Invest in Cambodia” roadshow in India, and increase trade in products such as dyes and pigments. They also discussed cooperation in agriculture, banking and insurance. It is worth noting that India&#**;s trade figures have not been matched with Cambodian customs data, as Cambodia reports its trade data on a calendar-year basis.
