Enhancing Economic Relations between India and Mongolia:Tasks and Opportunities

Prabir De and Sreya Pan

The relations between Mongolia and India have a long history. Both the countries have continued to build relations based on their shared historical and cultural legacy. Relations with Southeast and East Asian countries are the foundation of India’s Act East Policy (AEP). Mongolia has a strong strategic dimension, thus occupying an important space in India’s AEP. Mongolia plays a pivotal role when India aims to deepen its partnership with North East and Central Asia. Mongolia being a landlocked country relies heavily on foreign trade and investment. Although China and Russia account for a large share of Mongolia’s trade and investment, India-Mongolia trade has been growing at a faster pace in recent years. However, compared to its potential, current economic engagement is limited primarily to trade in minerals only. While strategic aspects continue to dominate the bilateral engagements, the possibility of enhancement of economic relations between India and Mongolia has never been explored in a comprehensive manner in the past. The visit of Indian Prime Minister to Mongolia in May 2015 has opened new opportunities to take bilateral relations between the two countries to higher levels. India-Mongolia bilateral relations hold the promise of fostering the regional integration process in Asia. Given the thrust of the Act East Policy (AEP), this book analyses the scope and opportunities in interdependence in economic areas between India and Mongolia, presents an assessment of economic cooperation, identifies the challenges and highlights policy issues to be sorted out to foster bilateral relations. To strengthen the India-Mongolia strategic partnership, this Study concludes that both sides should engage in constructive dialogue on areas of mutual interest such as connectivity, trade in goods and services, investment, etc. Maintaining cultural relations with Mongolia is as important as building and enhancing economic relations. The time is now right to move forward, but achieving significant progress will require effective management of bilateral trade and economic policy issues, accompanied by strategic engagement on security and foreign policy fronts.

Prabir De, Professor, Research and Information System for Developing Countries (RIS); Coordinator, ASEAN-India Centre (AIC); and Adjunct Fellow, Institute of Chinese Studies (ICS), New Delhi

Sreya Pan, Research Associate, Research and Information System for Developing Countries (RIS), New Delhi

Contents

Foreword
Preface List of Tables, Figures, Maps and Appendices
List of Abbreviations

Executive Summary
1. Introduction
2. Overview of the Mongolian Economy
3. Economic Relations between India and Mongolia
4. Mongolia’s Integration with the World Economy
5. Mongolia’s Trade Transportation Linkages with Neighbouring Countries
6. Bilateral Relations between India and Mongolia
7. Measures to Strengthen India – Mongolia Economic Relations
8. Conclusion
References
Appendices

Prabir De and Sreya Pan