Intueri Consulting LLP (“Intueri”) is currently engaged in 3 (three) separate mandates (the client names are being withheld for purposes of confidentiality). Significantly, all such assignments bear a single central theme – analyzing various dimensions of business within the ASEAN region and among countries of the Far East, especially in terms of economic outlook and logistical linkages. This convergence in subject-matter allowed Intueri’s trade economists, supply chain consultants, and international trade/corporate lawyers as well as treaty experts (in collaboration with Intueri’s legal partner firm, AQUILAW) to study (in on-site and off-shore modes, respectively) the relevant linkages such as rail, road, waterways, etc. in-depth. Such linkages, we found, which are currently existing or which may be created through new interventions or by improving upon present options, have the potential of substantially increasing trade between countries of the region, particularly among those that are located around West Bengal (‘WB’) and Bangladesh. Thereafter, the established trade routes may be extended to the core ASEAN countries and beyond, including farther east, thus creating an intricate regional web of trade and economic connectivity.
Intueri’s assignments, as mentioned above, have either been executed, or are in various stages of execution. Along with researchers and analysts at the Bengal Chamber of Commerce & Industry (“BCCI”), Intueri’s multi-disciplinary team had occasion to critically evaluate the underlying trade routes, the Logistical Management Index (as per the WB methodology of measuring), including in respect of waterways both within India and Bengal (along with vehicular movements such as ‘ro-ro’ ferries, ships, barges, and other vessels). There were valuable conclusions and insights therefrom, yielding a significant re-examination of the following: (1) cross-border and in-country movement across miscellaneous commodity categories; (2) interconnections between road, rail and water; (3) potential for a multimodal logistical hub; (4) national economic prosperity and country-wise trade parameters at the level of products and allied economic data; and (4) value-added contribution of each of the regional economies under consideration in respect of concepts such as “Global Value Chains” (GVCs), as introduced by the World Bank.
A vital aspect of our study was the evaluation of various bilateral and multilateral trade agreements, regional Free Trade (FTAs) and Preferential Trade Agreements (PTAs), as well as global trade instruments (such as WTO, GATT, GATS, TRIPs, etc.). In addition, we examined domestic trade regimes and their appurtenant implications (such as national laws, regulatory frameworks, municipal/tax regulations in terms of customs, tariffs, duties, etc.), including the possibilities of deterrence to, and assistance of, trade. This framework of analysis, other than helping our own consultants give better advice, has the scope of being abundantly useful to multi-national corporations (MNCs), especially those engaged in the manufacturing sector, if used in conjunction with data gathered through primary on-the-ground research and secondary analysis. The findings from such research help MNCs make better-informed decisions in terms of their global expansion strategies and regional market penetration. MNCs that produce components, parts, or finished products within India are increasingly seeking such strategies, and look to leverage opportunities arising from a buoyant ASEAN economy. Accordingly, in order to exploit markets beyond, and complementary to, India’s, such data, as captured through this study, along with its key inferences, have the potential of revolutionizing regional business. The 3 (three) reports compiled by our consultants demonstrate the comparative advantages of Bengal (relative to other manufacturing bases in India or in neighboring countries). Consequently, it would appear that MNCs and major corporate houses ought to choose their locations afresh, avoiding the trappings of traditional perceptions of commerce and industry. To ignore such modern developments and new trends in policy, politics and business would be myopic and unwise.
Notably, the recently-published IMF World Economic Outlook Report (the “Report”) suggests a 4.9% increase in world trade volume in 2018-19 through major contributions by the ASEAN countries. The Report predicts a growth in world GDP stemming from investment expenditure in developed economies, and concomitantly, from consumption expenditure arising from, as has been the recurring trend in, developing countries. Hence, consumption, especially linked to trade, will be more profound in developing regions (such as ASEAN), a finding of the Intueri/BCCI consulting report that has thus been corroborated. In addition, the study also shows that improved logistics significantly reduce non-tariff costs, and thus, existing trade agreements should be exploited optimally to foster a more favorable trade environment. A combination of such factors are poised to constitute a supportive system that will prop up business and cross-country collaborations in industry and trade. Corporate bodies should contemplate considering such new evolving paradigms while formulating their international expansion strategies.