Brief on India - Laos Bilateral Relations


Embassy of India
Vientiane

 

INDIA-LAOS BILATERAL RELATIONS

Political

Based upon historical and civilizational foundations and the role played by India as Chairman of the International Commission for Supervision and Control (ICSC) on Indo-China, India and Lao People’s Democratic Republic (PDR) enjoy longstanding, friendly and mutually supportive relations. Lao PDR has been supportive on major issues of regional and international concerns to India, including our claim for permanent membership of the UN Security Council. More recently, Laos supported Indian candidatures in the International Court of Justice and UNESCO Executive Board elections.

After establishment of political relations in February 1956, the following high-level visits between the two countries have added momentum to the relationship:

 

Visits from India

Visits from Lao PDR

 

President:

1

Dr. Rajendra Prasad - 1956

Prince Souphanouvong, commonly known as the Red Prince - 1975

2

Smt. Pratibha Devisingh Patil – Sept. 2010

Mr. Choummaly Sayasone - August 2008

 

Vice President:

1

Shri Mohammad Hamid Ansari – Sept. 2015

 

 

Prime Minister:

1

Pandit Jawahar Lal Nehru - 1954

Mr. Thongsing Thammavong – Dec.2012

2

Shri Atal Behari Vajpayee - 2002

Dr. Thongloun Sisoulith – Jan 2018

3

Dr. Manmohan Singh – 2004

 

4

Shri Narendra Modi – Sept. 2016

 


Institutional consultative mechanisms include FOCs (the 2nd FOC was held in New Delhi on 10 August, 2015) and JCM (the 8th JCM was held in New Delhi on 10 August, 2015 and the 9th JCM was held on 23 November 2018 in Vientiane).

Deputy Minister of Foreign Affairs visit to attend 10th edition of Delhi Dialogue - Mr. Thongphane Savanphet, Deputy Minister of Foreign Affairs together with 4-member delegation comprising Mrs Phimpha Keomixay, Deputy Director General, Institute of Foreign Affairs, MFA, Ms. Veomanee Meunluang, Deputy Director of ASEAN Political-Security Community Division, ASEAN Department, MFA, Mr. Phongsavanh Sisoulath, DG ASEAN Department, MFA and Mr. Viengoudom Chanthavong, Deputy Director of External Relations Division, ASEAN Department, MFA participated in the 10th edition of Delhi Dialogue from 19-20 July, 2018. 

Delegation from Lao PDR attends Workshop on Blue Economy - Mr. Phongsavanh Sisoulath, DG ASEAN Department, Ministry of Foreign Affairs and Mr. Viengoudom Chanthavong, Deputy Director of External Relations Division, ASEAN Department, MFA participated in the Workshop on Blue Economy held on the sidelines of Delhi Dialogue-X. 

Agreements signed between the countries include: India-Laos Cultural Agreement (August, 1994), Agreement for setting up of Joint Commission on Trade, Economic and Scientific Cooperation – May 1997, Agreements on (i)Trade and Economic Cooperation; and (ii) Bilateral Investment Promotion & Protection (9 November, 2000), Agreement on Cooperation in Defence (November, 2002), , Agreement on Mutual Cooperation on Drug Demand Reduction & Prevention of Illicit Trafficking in Narcotic Drugs and Psychotropic Substances and related matters (November 2002), MoU  on setting up of Entrepreneurship Development Centre (July, 2004), Agreement on Cooperation in Science & Technology (June 2003), Agreement on Exemption of Visa Requirement for holders of Diplomatic and Official Passports (2005), MoU for the Conservation and Restoration of the UNESCO World Heritage Site at Wat Phou (May, 2007), MoU for Setting up Centre for English Language Training (June, 2007), Agreement on setting up of a Sustainable IT Infrastructure for Advance IT Training (Centre for Excellence in Software Development & Training) (August, 2015), Agreement between India and Lao PDR regarding Indian Grant Assistance for implementation of Quick Impact Projects (QIPs) [18 September 2015].

Quick Impact Projects (QIPs) :  An MoU on three projects in the field of agriculture proposed by the Lao side  viz., ‘Establishment of  Fertilizer Analysis Laboratory’ at Department of Agricultural Land Management;‘Promotion of Goat Raising in Lao PDR’ in Jieng Village, Thoulakhom District, Vientiane Province; and ‘Promoting Green Cardamom Cultivation in Paksong District, Champasak Province’ was signed between the Embassy of India, Vientiane and Department of Planning and Finance, Ministry of Agriculture & Forestry of Lao PDR on 18 October, 2017 in Vientiane.  The Projects are under process of implementation.

Defence Cooperation: Since 1994, under ITEC Agreement, a two-member 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. Indian Army had also conducted three training capsules on UXOs and De-Mining in Laos in 2011, 2012 and 2013.  10 Slots for ITEC Defence Training had been allotted to Laos for the year 2018-19. 

Commercial:

Bilateral Trade:

 

2013-2014

2014-2015

2015-2016

2016-2017

2017-2018

Indian exports to Laos

49.89

67.31

37.94

25.72

25.00

Indian imports from Laos

39.40

85.28

180.03

207.38

168.63

TOTAL TRADE

89.29

152.58

217.96

0

193.63


Source: Department of Commerce, Government of India.
(Figures in US$ million)

Top 5 Exports from India to Laos
(2017-18)

Top 5 Imports from Laos to India
(2017-18)

Item

Value

Item

Value

Electrical machinery and equipment

12.65

Gold Ores

107.45

Drug Formulation/Biological

2.81

Bulk Minerals and Ores

26.70

Buffalo Meat

1.26

Plywood and allied products

11.93

Electronics instruments

1.17

Silver

5.42

Electronics Component

1.13

Other wood and wood products

4.36


Source: Department of Commerce, Government of India.
(Figures in US$ million)

In pursuance of the announcement made by the Prime Minister of India in April 2008, India has accorded the Duty Free Tariff Preference Scheme (DFTP) to Lao PDR. The Scheme grants Laos duty free access to 94% of India’s total tariff lines.

While the trade between India and Lao PDR is still below potential, India has extended Duty Free Tariff Preference Schemes to Lao PDR to encourage export of goods from Lao PDR to India.  We also have immense opportunities in services trade that goes into building the economy of Lao PDR.  Implementation of the ASEAN-India Services and Investment Agreement would help facilitate our services trade. 

Projects under Lines of Credit:  The following projects have been supported through Indian Lines of Credit over the past ten to fifteen years.

1. 115 KV Transmission Line from Ban-Na in Champassak Province to Attapeu (2004) – completed in 2006

2. LOC for (a) Equipment for rural electrification, (b) Pakson-Jaingxai-Bangyo Transmission Line and (c) Nam Song 7.5 MW Hydropower Project (2008) – completed in 2009, 2010 and 2012 respectively.

3. LOC for Irrigation schemes in Champassak Province : comprising 3 components: (a) Conversion of diesel to electric driven pump sets & improvement of 3 pumping stations, (b) installation of ten large pump sets and (c) six large irrigation schemes (2009) – completed in 2015.

4. LoC was extended to Laos for (a) 230 KV Double Circuit Transmission Line from Nabong to Thabok and substations; (b) Extension of thabok & Nabong substations to 230 KV; and (c) Nam Gnung-Laksao, 115 KV Transmission line and substations.

5. LOC for Irrigation projects in three provinces (2013) – It has two components, that is, Conversion and commissioning of diesel driven pumps into electric pumps and Irrigation by gravity from Nam Nga, Nam Xang and Houay Yang Noi Dams. 

6. LOC for upgrading of Agricultural College in Champasak province.

Cultural Relations:

Human Resource Development: The Government of India has been providing nearly 120 scholarships annually to Lao nationals under various schemes.  So far, under ITEC, GOI has trained about 1500 Lao nationals. The LIEDC (Lao-India Entrepreneurship Development Centre) set up in November, 2004, trains Lao entrepreneurs for setting up small and medium scale business. The LICELT [Lao India Centre for English Language Training] set up in National University of Laos, Vientiane on June 2007 is one of our assistance projects in human resource development.  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 in seven Provinces and three in the Ministry of Health, the Government’s Office and in the office of the Governor of Vientiane.  Centre for Excellence in Software Development and Training (CSEDT) was inaugurated in Vientiane on 26 November, 2018.


Heritage Conservation
: An MOU was signed with the Ministry of Information and Culture in May 2007 for the restoration of the UNESCO world heritage site at Vat Phu an ancient Shiva Temple.  The work on the project began in June 2009.  The budget is around US$ 4.1 million. Eight seasons of restoration work in Phase I has been completed in May 2017.  As per ASI, restoration work of Northern Quadrangle of the Vat Phou premises is complete. Phase-II of the Project has commenced from 1 November, 2018.

Indian Community:

The 500-strong Indian community has grown in profile over the years. It 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.  It is understood that the number of Indians in Laos was much higher during the sixties and early seventies.  Most of them left after the Communists took over in 1975.  Some of them returned after a lapse of some years.  The only Indian association in Vientiane is INCHAM – the Indian Chamber of Commerce.  Though it does not cover all Indians living in Laos and is also not very active, it is the only umbrella for Indians and PIOs in the country.

The ASEAN India Business Council (AIBC) based in Malaysia has got a Chapter in Laos.  Its Lao representative is also the owner of the HSMM Group. AIBC-Laos has been active in the last one year.


Laos is a part of India’s extended neighborhood as only one country, namely Myanmar, separates Laos from India’s North East. The distance from the Lao border with Myanmar in the North to Manipur border in India is less than 2,000 kms.  Hence, we should ensure that our proposed projects like the trilateral highways, physical and digital connectivity, the Vat Phou restoration project, etc., stay on track and are completed on time. We should also seriously look at how we can bring Laos closer to India by using EXIM Bank of India finance to expand the already existing market for Indian products like TVS motorcycles and Mahindra tractors and agricultural implements, finding a way to not lose the 22,000 hectares of land, presently held on long lease by Aditya Birla Group in Laos by bringing other Indian companies who may be willing to take the land on lease for agriculture and agro processing, etc. In short, the Indian footfall including the Indian industries’ footfall is rather small in Laos and we should continue to make efforts to increase this and not lose what we already have here. As the Indian presence grows and the success stories become more, India-Lao relations in different spheres will grow. 

 

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