Mongolia: trade relations with India intensify

Mongolia intensifies trade relations with India increase and increase their trade flows. During a meeting held in Ulan Bator, the two Heads of State, Pratibha Patil and Tsakhia Elbegdorj, were able to take stock of the situation: among the objectives of the meeting, the strengthening and consolidation of political-economic relations between the two States through the definition of some agreements capable of giving greater stimulus to the Mongolian economy. Strong cultural ties already exist between the two countries, and the economic growth experienced by Mongolia in recent years, together with the improvement of democratic conditions which occurred especially following the dissolution of the Soviet Union and a consequent opening towards the free market, they have undoubtedly contributed to accelerating a process of rapprochement by New Delhi, which sees in Ulan Bator an economic and political partner it can rely on.

The meeting led to the signing of some important agreements, both from a strategic and diplomatic point of view and from a strictly commercial point of view. The two Presidents signed a bilateral cooperation agreement relating to defense policy and the redefinition of their strategic interests, but they did not limit themselves to this. Agreements have also been signed between the respective parties Planning Commission (these are government institutions that deal with providing development plans and projects, aimed at improving the economic and social conditions of the countries in question): in this regard, India, which can count on a certain level of experience accumulated in these years, will support Mongolia in economic planning and design processes, through better optimization of resources and the creation of a design apparatus. Mongolia has in fact set up a National Committee for Development and Innovation in which India will play an important role.

The ambitious partnership plan also includes agreements on energy and mining, as well as the creation of a center that deals with education, information technology and outsourcing, which will involve an investment by New Delhi of 20 million USD. To intensify contacts between the two nations and further improve trade relations, collaboration agreements have also been signed for the strengthening of means of communication, thanks to the stipulation of agreements and exchange programs which will allow easier travel between the two populations and greater information between the two States, through the channels of the media.

India has long since established several training centers in Mongolia, offering its cooperation in the field of education and training to better qualify the skills of young people and the local workforce. It is no coincidence that some Indian companies have long since set their sights on the potential offered by Mongolia, settling in this vast and sparsely populated territory. The exploitation of minerals represents one of the country's main businesses, and in the future the number of Indian companies that will operate in various sectors, from agriculture, to food, to technological products, to the training sector, to infrastructures, to tourism will be always greater.

Mongolia, which is spread over an area of 1,565,000 square kilometers, has a population of approximately 2.7 million. The GDP grew by 6.1% in 2010 and the local market presents itself in a very interesting way: since the 90s, in fact, the necessary reforms have been implemented to open up the economy, encouraging and stimulating foreign investments. The country has recorded significant growth rates thanks not only to the abundant presence of natural resources, which represent its main wealth, but also thanks to the presence of a stable political system. It certainly takes time to consolidate development and give a greater boost to growth dynamics, but it is still a nation that has been able to successfully make the transition from a planned economy to a free market economy.

However, Mongolia depends overwhelmingly on its neighbors, namely Russia and China. The latter, in particular, represents the main trading partner: trade with Beijing accounts for 50% of total foreign trade (in terms of exports and foreign trade) and China receives 75% of Mongolian exports. Precisely for this reason, India deems it appropriate to intensify its relations with Ulan Bator: the commercial partnership between the two countries has always been good and bilateral trade reached USD 16.9 million in 2010, thanks in particular to the Indian export of pharmaceuticals, veterinary medicines, automobiles and auto parts.

According to leading international analysts, Mongolia is a growing economy capable of offering commercial and investment opportunities in the medium to long term. Furthermore, its privileged relationship with New Delhi constitutes an excellent opportunity for interested Italian companies, since India could in fact represent the channel and the useful connection bridge for accessing this market.

READ ALSO:

The success of Italian companies in India

Internationalizing your business abroad: strategic choice or opportunity?

Digital Export Manager (DEM): internationalization in a digital context