In the Soviet era, Armenia was a highly industrialised nation and a leading manufacturer and exporter of textiles, machine tools and automotive components. Following the disintegration of Soviet Union, Armenia shifted its focus to the agriculture sector that was once an insignificant segment of the economy.
Today, Armenia is known for its stable economy, steady growth and openness towards privatisation. The country is also an important energy exporter to a number of European and Asian nations. Owing to the investment friendly climate in Armenia, several Indian SMEs are eyeing this Central European country for trade and investment opportunities.
In recent times, India has become an important Asian trading partner of Armenia. Notably, total exports from India to Armenia in 2008 were pegged at around $48.9 million, while Armenian exports to India during the same period hovered at around $2.4 million.
India’s export basket for Armenia consists of electrical equipment, plastics, pharmaceuticals, chemical goods and optical equipments. Alternately, Armenia exports raw rubber, textiles, books and non ferrous metals to India.
Sectors of growth
According to market experts, India and Armenia are yet to tap the opportunities that exist in bilateral trade. Indian SMEs in the IT sector can enter into strategic alliances with their Armenian counterparts for knowledge-sharing and technology transfer. Armenia too has sought assistance from Indian SMEs in the IT segment to boost its evolving IT industry.
Armenia is a lucrative trade destination for Indian SMEs engaged in the textiles sector. By setting up manufacturing units in Armenia, Indian SMEs can gain easy access to the Commonwealth of Independent States (CIS) countries that do not levy taxes on Armenian goods.
The thriving gems and jewellery sector in Armenia is another segment that Indian SMEs, particularly those engaged in exporting diamond can explore. Armenia imports raw diamonds primarily from Russia. Indian diamond exporters can strengthen their foothold in the gems and jewellery sector by supplying their B2b Productsin the Armenian market.
Promoting bilateral Trade Leads
To promote increased economic exchanges between the two countries, the Armenian embassy in India initiated a “four plus one” policy of sector-specific cooperation. Under this policy, Armenia has sought assistance from India to boost its four key sectors. These include IT, agriculture, science and technology (S&T) and SME.
India is assisting Armenia by conducting training programmes on a regular basis. With both countries adopting a positive approach to enhance trade relations, Indian SMEs can be optimistic about their growth prospects in Armenia in the near term.