India - Guyana Economic and Commercial Relations

India and Guyana enjoy a very cordial and friendly political relationship based on historical and cultural ties. However, the level of commercial and economic interaction between India and Guyana is much below its potential though there has been some improvement in the volume of bilateral trade in the recent past.

2. Three main reasons can be adduced for low volume of trade and these are:

1. Small population of Guyana which is under 800,000. It significantly restricts the size of the Guyanese market.
2. Low per capita income in Guyana which is placed around US $ 937/-.
3. Large distance between India and Guyana as a result of which freight rates become high especially on small consignments.

India's exports to Guyana:

3. India's exports to Guyana during the last three years as per the statistics released by the Directorate of Commercial Intelligence and Statistics in Calcutta are as below:-

4. The actual volume of India's exports to Guyana is higher than what is reflected in the figures given above. This is because a wide variety of Indian goods are imported by Guyanese businessmen from neighbouring locations like Miami (USA), Saint Lucia, etc. Importers here can procure Indian merchandize in small consignments from such nearby places without paying high freight. Freight on similar consignments if ordered directly from India would be prohibitively high.

5. The main items of Indian exports to Guyana are: spices, sports goods, leather footwear & leather products, drugs & pharmaceuticals, machinery & instruments, metal products, cotton yarn, fabric & made-ups, plastic & linoleum products, paper & wood products, transport equipment, handicrafts, man-made yarn, fabric & made-ups, readymade garments cotton including accessories, cosmetics, toiletries, etc.; and rubber products.

6. As regards our exports of machinery and equipment, during the last few years Indian companies have executed some important orders in Guyana and their details are as follows:
" Supply of boilers, pressure pumps, turbines, etc. by M/s. Triveni Engineering Ltd. And M/s. Kirloskar to Guyana Sugar Corporation Ltd. (GUYSUCO)

" Supply of a complete paper recycling plant to a local company, Caribbean Containers Inc., by TMT Engineering Company of Hyderabad.

" Supply of equipment for several rice and oil mills.

India's imports from Guyana:

7. India's imports from Guyana are very much limited and are mainly confined to wood and wood products and inorganic chemicals. Guyana's exports to India as per statistics of Directorate of Commercial Intelligence & Statistics are as follows:

8. Demerara Distillers Ltd. (DDL) of Guyana, the manufacturer of world-famous 'El Dorado' brand of Rum, have entered into a joint venture with a group of Indian businessmen to export/produce their products in India.
Line of Credit:

9. A line of credit of Rs.100 million was extended to Guyana in 1989. This Line of Credit was utilized by Government of Guyana for import of Indian Consultancy Services and machinery for establishment of specific industries in Guyana. A sum of Rs.28.78 million (Principal plus interest) of this LOC was outstanding as on 30.9.02. During President Bharrat Jagdeo's State Visit to India in August 2003, Government of India decided to write off this debt of Guyana as part of Heavily Indebted Poor Countries (HIPC) initiative of IMF and World Bank to reduce the debt of the poorest countries to sustainable levels.

Recent developments:

10. As one of the immediate outcomes of the President Bharrat Jagdeo's visits to India in August 2003 and January 2004, India has agreed to extend to Guyana a concessional credit line of US$ 25.2 million for modernization of its sugar industry. India has also agreed for the construction of a cricket stadium in Georgetown upto a grant ceiling of US$ 6 million to enable Guyana to host some of the Cricket World Cup 2007 matches. India has agreed to increase ITEC training slots from 15 to 35 for Guyanese scholars and in this financial year 38 Guyanese have gone to India so far for training in different establishments in India. During the August 2003 visit of President of Guyana to India an agreement was signed for establishing a Joint Business Council. The first meeting of this Council is likely to take place in New Delhi this year which will enable India and Guyana to forge more meaningful relationship to the advantage of business communities of both the countries. In January 2004 during the Presidential visit to India, both countries agreed to soon conclude a Double Taxation Avoidance Agreement and a Bilateral Investment Promotion and Protection Agreement to create a congenial commercial and economic environment.

Source : Indian High Commission, Guyana