Business

AMMAN – The Arab Potash Company (APC) will export 600,000 tonnes of potash to the Sinochem Macao Chinese company under an agreement recently signed between the two sides. According to the APC website, the quantity will be exported this year, in addition to other optional quantities to be agreed upon by the two companies. 

AMMAN — Amman Chamber of Industry’s (ACI) exports to Iraq declined by 19 per cent during the first quarter of 2015, compared to the same period of 2014 due to the security conditions in the neighbouring country, ACI Director General Nael Husami said Monday.

According to a statistical report, ACI exports to Iraq in the first three months of 2015 reached JD190 million, compared to JD235 million in 2014’s first quarter.

Husami warned against the drop of exports to Iraq, calling for intensive efforts to address the challenges, most important of which is the low number of Iraqi trucks that enter the Kingdom empty to load local goods, and the long time they wait to reach the customs exchange park.

Despite the increase of the total ACI exports to external markets in the first quarter of 2015, it was not a source of relief to Husami. He noted that the rise was led by the mining industries sector, while the manufacturing sector, which employs more workforce, witnessed a decline.

According to the report, ACI total exports in the January-March period stood at JD1.08 billion compared to JD1.07 billion in the same period of 2014. 

AMMAN — Loan guarantees offered by Jordan Loan Guarantee Corporation (JLGC) seem to be gaining momentum as they were in high demand last year.

According to the JLGC's 21st annual report, the outstanding guaranteed portfolio at the end of 2014 was valued at JD64.6 million spread over 3,599 credits.

At the end of 2013, the guaranteed value was JD59.1 million spread over 3,306 credits.

Of the outstanding balance at the end of last year, JD36.1 million in guaranteed value covered 1,826 productive credits under the small- and medium-sized enterprises’ (SMEs) loan guarantee programme. 

The remaining JD28.5 million were in guarantees for 1,773 beneficiaries from real estate and personal loans.

JLGC Chairman Maher "Al Sheikh Hassan" told the shareholders in an annual report's foreword that productive projects carried out by SMEs benefited last year from financial guarantees extended to 824 loans, carrying a JD32 million nominal value. 

Sheikh Hassan, who is the deputy governor of the Central Bank of Jordan, indicated that under the export and domestic credit  guarantee programmes, JLGC also covered 1,219 shipments with a value in excess of  JD52 million.  

In  a breakdown of the latter facility, JLGC General Manager Mohammed Al Jafari mentioned that guarantees valued at JD47 million  were spread over 794 export shipments, and others valued at around JD5 million were spread over 425 domestic sales.

Tables highlighting operational activities and results  showed that the amount outstanding of loan guarantees at the end of 2014 was JD19.7 million, 98.35 per cent of the JD20 million ceiling provided under the "productive programmes/small enterprises" category.

At the end of 2013, the outstanding amount was JD13.65 million or 73.8 per cent of the JD18.5 million ceiling.

In terms of number of loans, the amount last year  was spread over 1,647 borrowers compared with 1,205 beneficiaries in 2013. 

Under the second category, named "real estate and housing programmes/personal", the performance was lower as the outstanding amount declined from JD30.8 million at the end of 2012, or 76.8 per cent of the JD40.1 million ceiling to JD28.6 million or 75.3 per cent of the JD37.9 million ceiling.

In terms of number of loans, the amount was spread over 1,944 beneficiaries in 2013 compared with 1,773 beneficiaries in 2014.

Combining both categories, outstanding loan guarantees stood at JD48.2 million at the end of last year, or 83.2 per cent of the JD57.95 million ceiling.

On December 31, 2013, the combined outstanding amount was JD44.4 million, 75.9 per cent of the JD58.55 million ceiling.

Beside those facilities, the corporation operates a loan guarantee portfolio earmarked for industrial financing. 

The outstanding value under this facility at the end of last year was JD16.4 million spread over 179 borrowers compared with JD14.7 million spread over 157 borrowers in 2013. 

The guarantees for  industrial financing last year totalled JD4.5 million to 26 entrepreneurs, 34.3 per cent higher than the JD3.3 million in 2013 to 22 beneficiaries.

Jafari pointed out that the banks participating in the transactions submitted last year claims amounting to JD530,000 for compensation on bad loans. In 2013, bank claims for reimbursement totalled JD766,000. 

The general manager said in the annual report that compensation paid by JLGC in 2014 in lieu of bad loans amounted to around JD307,000, lower than the JD332,000 paid in reimbursements in the previous year.

JLGC recouped JD354,000 last year compared with more than JD129,000 recovered in 2013.

"To encourage operational sustainability for small- and medium-sized entrepreneurs, and in consideration of the business circumstances and environment in the Kingdom in 2014, the door was opened to reschedule  some indebtedness," Jafari said in the report.

He indicated that JD5.4 million in guaranteed loans were rescheduled  compared with JD3.3 million in 2013. 

Financially, the report showed that gross earnings went up in 2014 by 4.9 per cent to JD1.75 million compared with JD1.7 million at the end of the previous year.

"The increase was due to higher operational income which rose from JD843,000 in 2013 to JD874,000 last year, and to growth in investment earnings which went up from JD829,000 to JD879,000," the report indicated.

According to the balance sheet as of December 31, 2014, JLGC generated JD420,336 net profit slightly higher than the JD419,696 posted at the end of the previous year.

The balance sheet showed shareholders' equity at JD14.5 million, and total assets at JD25.9 million.

The annual report shows that the corporation is active in channelling donor funds to SMEs in cooperation with the Central Bank of Jordan, the Ministry of Planning and the Development and Employment Fund, among others.

The Central Bank of Jordan, the Cities and Villages Development Bank, the Social Security Corporation were JLGC's main shareholders at the end of last year as they owned 47.75 per cent, 5.25 per cent and 5.24 per cent respectively of its JD10 million capital.

KUSATSU, Japan — Hirotoshi Ogura, a self-described "factory geek", is Daikin Industries'  master of doing more with less, and part of the reason Japan's recovery remains stuck in the slow lane.

As Japan heads into the season of peak demand for room air-conditioners, Ogura and other Daikin managers have been tasked with figuring out how to boost output by some 20 per cent at a plant in western Japan that six years ago the company had almost given up on as unprofitable.

The wrinkle: they have no budget for new capital investment at the 45-year-old Kusatsu plant. 

The still-evolving workaround shown to a recent visitor involves home-made robots for ferrying parts, experimental systems using gravity rather than electricity to power parts of the line, more temporary workers on seasonal contracts and dozens of steps to chip away at the 1.63 hours it takes to make a typical new air conditioner.

"We can do a lot without spending anything," says Ogura, a 33-year Daikin veteran who joined the company just after high school. "Anything we need, we first try to build ourselves."

Like Daikin, a number of Japanese manufacturers are shifting production back to Japan from China and elsewhere to take advantage of a weaker yen. 

Rival Panasonic has pulled back some production of room air-conditioners, Sharp  has brought back production of some refrigerators, and Canon  has repatriated some output of high-end copiers, according to a list compiled by Nomura.

But even as output recovers, Japanese companies remain cautious about new capital investment in factories and equipment. The trend is especially pronounced for smaller firms down the supply chain.

After increasing capital spending by 6 per cent in the just-completed fiscal year, small manufacturers plan a 14 per cent decrease in the current year, according to the Bank of Japan's quarterly survey released this week. 

Big manufacturers like Daikin plan a 5 per cent increase, but overall investment remains 10 per cent below pre-crisis 2007 levels.

Over the same time, corporate earnings have increased by 11 per cent, shares have rallied, Daikin's are up more than four-fold from its 2008 low, and Japanese companies have socked away a record 87 trillion yen ($730 billion) in cash. 

No mood for risk

For Prime Minister Shinzo Abe's economic revival plan to work, pulling Japan out of decades of stagnation and deflation, companies need to be willing to use that cash for new investment in a way they have so far baulked at in the more than two years since he took office, economists say.

"It turned out that the government and the Bank of Japan were wrong in thinking monetary easing would boost capital spending," said Taro Saito, director of economic research at NLI Research Institute. 

"Low growth expectations appear to outweigh the benefit from lower interest rates, keeping companies from boosting capital spending," he added.

For Daikin, there is a wariness that the slumping demand and sharply higher yen that almost forced the closure of the Kusatsu plant in 2009 could return at any time. Sales in Japan represent just 25 per cent of Daikin's air-conditioning sales now, down from over a third in 2009.

But managers also say the lean years have forced the company to innovate at its four home factories, a theme mirrored at Daikin's production mentor, Toyota Motor.

At the urging of Toyota President Akio Toyoda, Japan's top automaker last week unveiled the results of a five-year-old programme to re-engineer the way it makes cars to cut the costs of retooling existing factories and building new ones.

Already running its factories at 90 per cent of capacity, Toyota expects to be able to cut the cost to retool an existing production line for a new model by half of what it cost in 2009 and cut the investment needed for the new plants it is planning for Mexico and China by 40 per cent from earlier levels.

Like Daikin, the savings at Toyota will come by a thousand cuts, from smaller and more efficient paint booths to a faster and more flexible robot welding system that will also be installed at factories in Japan.

Atsushi Takeda, chief economist for the Itochu Economic Research Institute, said there was not much Abe's government could do to shake companies out of their caution, apart from cutting regulations and encouraging new industries, areas where progress has been slow. 

Most Japanese companies still see better growth outside Japan and are investing accordingly.

"Companies were so hard hit by the excessive yen strength after the Lehman shock they want to be convinced there won't be a reversal of the weak yen over the next five to 10 years," Takeda added. "They are in no mood to take risk."  

ASHGABAT, Turkmenistan — The president of energy-rich Turkmenistan said in comments broadcast Saturday that his energy dependent country has been hit hard by low oil prices and he urged the government to diversify the economy.

In a rare admission of the ex-Soviet nation's economic troubles, President Gurbanguly Berdymukhamedov said the country needed to boost earnings and urged officials to cut spending.

"The problems of the world economy have had a negative impact," Berdymukhamedov told government officials at a cabinet meeting Friday, although the comments were only aired on state television Saturday.

"These difficulties are increasingly affecting our country, [and] to a certain extent are stifling economic growth."

"In such conditions we are forced to transform our economic policies," he told the Cabinet meeting, urging officials to revise the state budget.

Efforts have been made to boost domestic industries not related to oil and gas, he said, adding that exports from these industries only amounted to $1 billion.

He demanded that the government increase this figure to $5 billion by 2020.

"Our country has rich reserves of natural resources," Berdymukhamedov said.

"In this regard, I believe that we can create a lot of enterprises able to produce high-quality products no worse than the imported products we are now using hard currency to purchase."

The government of the Central Asian country does not typically make public comments about the country's economic problems.

Turkmens were shocked when authorities devalued the national manat currency by a fifth at the beginning of the year.

Berdymukhamedov said at the time that the "extraordinary step" was triggered by low prices for gas and oil, which make up more than 90 per cent of the country's exports.

Turkmenistan has the world's fourth largest known reserves of natural gas but limited export infrastructure and few reliable partners.

The main importer of Turkmen gas is China, which is committed to expanding its consumption of gas relative to carbon-intensive fossil fuels such as coal.

Crude oil has lost around 60 per cent of its value since June due to oversupply, with a strong dollar and a weak global economy dampening demand.

DOHA — Qatar's economy grew by more than 6 per cent in 2014, official figures showed, driven by spending on huge construction projects ahead of the 2022 World Cup.

Shrugging off any fears regarding the oil price slump, the energy-rich Gulf economy expanded by 6.2 per cent last year, according to the ministry of development planning and statistics.

The strong performance is evidence of "the resilience of the Qatari economy and its ability to withstand the decline in oil prices thanks to its strong macroeconomic fundamentals," the Qatar National Bank (QNB) said in a commentary on the figures.

Qatar has made efforts to diversify its economy away from oil and gas.

A key driver of growth last year was the construction sector, which expanded 18 per cent, QNB indicated.

Qatar has embarked on a huge $200-billion (190 billion-euro) infrastructure spending splurge ahead of hosting football's premier competition in seven years' time.

Among the major projects Qatar has approved are plans to develop the country's railway network, including the construction of a metro system for the capital Doha and surrounding areas, developing the city that will host the World Cup final, Lusail, and the building of a new port.

Other non-energy growth drivers last year included the financial services and the hotel and restaurant trade.

Despite the fall in global oil prices, Qatar's premier vowed recently to stick to the infrastructure spending splurge, 

Sheikh Abdullah Bin Nasser Bin Khalifa Al Thani told business leaders at a Doha finance conference that the kingdom would maintain its plans to spend heavily on development projects in the run-up to the football World Cup in 2022.

"We reiterate our commitment to investment infrastructure, health and education," he said.

Regional business intelligence specialist MEED has predicted that Qatar will see $30 billion worth of new infrastructure projects through 2015 alone.

The prime minister's message echoed comments by Qatar's finance minister, Ali Shareef Al Emadi, who said the country would keep up heavy spending on infrastructure despite fears over the global economy.

Qatar announced that its population had jumped in February to a record 2.33 million, on the back of an influx of foreign workers moving to the country.

Sheikh Abdullah, who is also interior minister, predicted Qatar's economy would grow by 7 per cent in 2015, suggesting the population increase was likely to continue.

PARIS — The Iranian nuclear deal, which heralds a lifting of sanctions choking the country's economy, could offer an unparallelled opportunity for foreign oil companies, but may take time to tap.

Thursday's deal "could represent a first step towards a return of Western oil companies" to Iran, said an analyst.

The sanctions imposed on Iran by the United States, then by the United Nations and European Union, led to the gradual departure of major Western oil companies, leaving just Chinese and Indian firms.

The lifting of sanctions offers a rare opportunity: entry into a country that is both a major oil and gas producer.

Despite sanctions cutting oil output by over a quarter, from 4 million barrels per day (mbpd) in 2008 to 2.81 mbpd on average in 2014, Iran still remains the fifth largest producer in the Organisation of Petroleum Exporting Countries (OPEC). It exports around 1.1 mbpd of oil.

Iran holds the second-largest gas reserves in the world behind Russia.

"Iran is a country with considerable oil and gas potential," said Francis Perrin, head of the SPE group of energy policy trade journals.

But any return is at least months away, according to Pierre Terzian, head of the Petrostrategies weekly.

Once sanctions are lifted, Iran will no doubt be looking to market the oil stocks it has accumulated in order to raise cash.

It could then "before the end of the year increase its [production] level significantly", said Guy Maisonnier, an economist at IFP Energies Nouvelles Research Centre, pointing out it produced 3.4 to 3.6 mbpd in 2012. 

But the hike in production depends upon the condition of Iranian oil wells and refineries, which haven't had access to spare parts and technology from the West for several years.

Iran wants the best

Iran has made no secret of its desire to see Western energy companies return.

At the Davos forum of international business elites in Switzerland last year, Iranian President Hassan Rouhani called on them to invest in his country's energy sector.

But their interest in doing so will depend greatly upon the conditions Tehran offers.

"For the energy companies to return to Iran, the fiscal terms of the contracts are attractive, which wasn't the case before the sanctions," said Bertrand Hodee, an energy analyst at the Raymond James brokerage.

"The Iranian system of buy-back contracts was too risky for international companies," he added.

While most oil investment deals globally are in the form of production sharing agreements, with the state getting a slice of the output in return for the concession, Iran preferred buy-back deals.

Under these, the international oil companies are in effect a contractor to Iran's national oil company, and are paid at agreed rates for their investments into installations. 

"Iran is conscious of that, in particular the Iranian oil ministry, which has been working for some time on a new framework oil agreement, the Iran Petroleum Contract" or IPC, which should be more attractive for foreign investors, said Perrin, because Iran "wants to work with the best".

As the extended absence of US oil companies from Iran risks making their return more complicated, European companies such as France's Total, Italy's Eni or Royal Dutch Shell may have an advantage, Perrin added.

He remarked that Iran "isn't very satisfied" with the Asian companies currently operating in the country. 

While the reopening of Iran offers energy companies opportunities, it won't immediately help them as it could prevent a rebound in oil prices which have fallen by 60 per cent from peaks last year, although that is a benefit for the global economy.

"For the world economy, the re-integration of Iran could help to keep oil prices lower for longer and mitigate the risks that conflicts elsewhere such as in Libya might pose to global oil supply," said economist Holger Schmieding at Berenberg bank.

BERLIN — German companies are hoping to win billions of euros worth of business from Iran after world powers reached a preliminary nuclear accord with Tehran, and Germany's engineering body urged banks to revise their business policies towards Iran.

"German businesses see the agreement as an encouraging sign," Felix Neugart, a foreign trade expert at Germany's DIHK Chambers of Commerce and Industry, told Reuters.

If economic sanctions were lifted by mid-year, business with Iran could "pick up markedly" in the second half of 2015, Neugart said. He added that German exports to Iran could double in the next five years.

In 2014, the value of German shipments to Iran rose by almost 30 per cent to 2.4 billion euros after some sanctions were suspended.

"In the long-term, trade could definitely be in the double-digit billions," Neugart indicated.

According to Neugart, interest in German machines and facilities remained high. Prospects were also good for the auto, chemical, pharmaceutical, medical device and renewable energy, he remarked.

Germany's VDMA engineering association welcomed the deal, saying that as long as negotiators agreed on the remaining details, it would be a strong foundation for future relations with Iran, including economic ties.

The VDMA said while embargoes would remain unchanged from a legal perspective for German machine manufacturers until the final agreement, Iranian demand for machinery was likely to rise, because such projects often have a long lead time. Deman for spare parts for machines will also increase, the VDMA noted.

Ulrich Ackermann, head of the VDMA's foreign trade department, added that the VDMA was urging banks to revise their policies on business with Iran now rather than in late summer.

"Because when Iranian customers enquire about new investment projects soon, you can't simply put them off until autumn due to deliveries of spare parts that are urgently needed," he explained.

The VDMA indicated that exports of German machines and facilities to Iran fell to 455 million euros in 2013 from 1.57 billion euros in 2006, though they picked up to 631 million euros last year.

Michael Fuchs, a senior member of German Chancellor Angela Merkel's Christian Democrats, said an agreement could be "very advantageous" for both Germany and Iran, the newspaper Frankfurter Allgemeine Zeitung reported.

He added that existing sanctions should be "relaxed within the framework of a strictly monitored agreement as soon as possible".

DUBAI — Iranian investment banker Ramin Rabii says he shouted in joy when he learned that Tehran and world powers had reached a deal which promises to lift economic sanctions on Iran. Then he called colleagues to discuss the business implications.

Rabii, managing director of Turquoise Partners, a Tehran-based investment firm with about $200 million of assets under management, has been grappling for years with the results of the sanctions: Unstable growth, high inflation, international banking restrictions and hard currency shortages.

The agreement on curbing Iran's nuclear programme, reached on Thursday, will, if confirmed in a final deal by a June 30 deadline, begin to ease those crippling problems for Turquoise and thousands of other Iranian firms.

"We've been preparing for this moment for 10 years," Rabii said by telephone, adding that in the months leading up to the deal, Turquoise was in touch with hundreds of potential foreign investors about opportunities for them if sanctions were lifted.

He indicated that the company now planned to develop its asset management and brokerage businesses, and would hold roadshows for investors in Europe and possibly Dubai.

Frozen out of the international banking system, its foreign trade slashed by the sanctions, Iran looks likely to become the biggest country to rejoin the global economy since post-communist eastern Europe in the early 1990s.

The resulting boom could create tens of billions of dollars worth of business for both local and foreign companies and shift the economic balance in the Gulf, which has so far been heavily weighted towards the rich Gulf Arab oil exporting countries.

"Precautionary talks have already started between Iran and some big Western investors" in areas such as oil and autos, indicated Iranian-born economist Mehrdad Emadi of London's Betamatrix consultancy. "Now there will be accelerating momentum."

He predicted annual growth of Iran's $420 billion economy would rise by as much as 2 percentage points to over 5 per cent in the year after a final nuclear deal. It could accelerate further to 7 or 8 per cent in the following 18 months, matching the growth of Asia's "tiger economies" during their boom years.

Iran's trade with the European Union (EU), which totalled 7.6 billion euros ($8.3 billion) last year, could balloon 400 per cent by mid-2018, Emadi pointed out.

Banking sanctions

The complex web of financial, shipping, energy and technology sanctions woven by the United States, the EU and the United Nations is expected to take years to remove, even if a final nuclear agreement is reached and implemented smoothly.

As a result, Iran's oil exports, cut by the sanctions to about 1.1 million barrels per day (bpd) from 2.5 million bpd in 2012, may not start rebounding before 2016.

But the single most damaging sanctions measure, the US Treasury's use of Section 311 of the USA PATRIOT Act to identify Iran as a money laundering area, could be lifted quickly by the Obama administration, analysts believe.

This would have a big impact on trade and investment by letting foreign banks deal with Iran without fear of being targeted by US officials. 

Iran could be re-admitted to the SWIFT global payments system, from which it was expelled in 2012, within three months of a final nuclear deal, Emadi said.

According to Rabii, the boost to Iranian production from easier trade would quickly spur the economy, even if big foreign investment deals took longer to arrange.

"Iranian industry is currently operating at about 60 to 70 per cent capacity. Thirty per cent is idle,  that's because of the sanctions. Getting this working again is the low-hanging fruit of lifting the sanctions," he said.

The economic benefits would extend across the Gulf, particularly to Dubai, which is a traditional hub for business with Iran and has a large Iranian community.

The sanctions slashed Dubai's trade with Iran by more than a third; the emirate could now become a jumping-off point for foreign companies going back into Iran.

Airlines and logistics firms around the region also stand to profit. 

Tarek Sultan, the chief executive of Kuwait-listed logistics giant Agility, described Iran as potentially attractive because its isolation had encouraged it to develop indigenous expertise that could allow it to leapfrog other economies.

"When the international situation is resolved and restrictions are lifted, we'll be among the first ones in there," Sultan told Reuters late last year.

Other parts of the Gulf economy may at least temporarily be hurt by the rise of Iran. Gulf Arab stock markets are reforming themselves to attract foreign capital; Saudi Arabia plans to open its bourse to direct foreign investment within months. These markets will now have a major rival for funds in Tehran.

Any increase in Iranian oil sales could come at the expense of Saudi Arabia, the biggest producers among the states grouped in the Organisation of petroleum Exporting Countries, which has lifted its output near 10 million bpd. 

The kingdom already faces a record budget deficit this year because of low oil prices.

NEW DELHI — India on Wednesday set an ambitious target of almost doubling its annual exports to $900 billion in the next five years as it seeks to boost the economy and provide jobs for a growing population.

Commerce Minister Nirmala Sitharaman said the government would encourage domestic manufacturing to increase exports from $469.5 billion in the 2013-14 financial year.

She said the government wanted to increase India's share of global exports from the current 2 per cent to 3.5 per cent.

"This new policy lays out a stable and sustainable roadmap for India's global trade engagement in the coming years," Sitharaman said at a press conference.

Right-wing Prime Minister Narendra Modi promised to bring development and new jobs to India when he swept to power last spring.

But sceptics say the government will first have to tackle corruption, unreliable power supplies and the country's dilapidated infrastructure. 

Analysts said the new export target looked ambitious.

"The hurdle will essentially be the global environment, where the growth is moving up but the growth in trade is not moving in the same way," said D.K. Joshi, chief economist at Indian ratings agency CRISIL.

"There are also issues with India's export non-competitiveness, which is essentially on domestic factors which the government can control and address," he added.

According to Sitharaman, the government would focus on "addressing constraints within the country", including weak infrastructure and red tape.

"Our target is to move towards a paperless working environment," she said, adding that the government was working on allowing exporters to submit documents electronically.

Defence and e-commerce would be priority sectors, Sitharaman remarked.

Separately, the government plans to pull its tariff regime closer in line with global norms to prepare for new regional trade pacts being negotiated by advanced economies.

India has not been invited to join pacts such as the US-led 12 country Trans-Pacific Partnership (TPP) and is "not in a position to join", partly because its tariffs are not competitive, a top official said at the unveiling of a new five year trade policy.

"If the country is to stand up to these agreements, it's important that we start to address these issues," Trade Secretary Rajeev Kher said, adding that India's access to markets was likely to erode when such pacts take effect.

According to Kher, India needed lower tariffs for intermediate goods to help it further integrate with global supply chains, and that these industries would have to come more competitive. He did not give more details.

Regional trade pacts are being promoted by advanced economies after years of failure to negotiate a global agreement under the World Trade Organisation.

TPP would link a dozen Asia-Pacific economies by eliminating trade barriers and harmonising regulations in a pact covering two-fifths of the world economy and a third of all global trade.

China, which is not part of the TTP negotiations, is pushing for a separate trade liberalisation framework.

"They have been explicit about the fact that there are these mega agreements that we are not invited to — as a response to that they are trying to fix things internally," said Akshay Mathur, head of research at foreign policy think tank Gateway House.

Kher said India was interested in a third grouping known as RCEP that combines Southeast Asian nations and six others -Australia, China, India, Japan, New Zealand and South Korea.

"India expects to be a major beneficiary of the ASEAN Plus six trade pact for which negotiations are likely to be completed by year end," Kher added.

Experts say the viability of that grouping may depend on India's progress in easing domestic regulations and external barriers that constrain economic activity.

In the first 11 months of the fiscal year to March 2015, merchandise exports stood at $286.58 billion, down from $314.4 billion in the previous year.