Unlike their predecessors who opened regional or at most trading and distribution offices, this time Indian companies are putting their money in manufacturing facilities. Two of these, Dabur and Spic between them account for about $200 million of capital investment in the Jebel Ali Free Trade Zone. In the Airport Free Zone, Pentafour and Optics Corporation are setting up state-of-the-art compact disc-manufacturing facilities. In the Dubai Investment Park, the Kopran-promoted joint venture, Globalpharma is setting up a large manufacturing facility for cardio-vascular drugs, over 70 per cent of which would be for the export market.

Facilitating this inflow of investmentis the Department of Tourism and Commerce Marketing (DTCM), a nodal agency for promoting tourism and investment. In a never-ending road show, DTCM representatives across the world are shortlisting prestigious names in high tech industries, pitching Dubai as an ideal location for their business.

Its promotion drive is rooted in the reality of Dubai's economy. As DTCM director general Khalid bin Sulayem says, "We would like to reduce our dependence on oil revenues." Unlike the other oil states, Dubai has oil reserves that will last them less than quarter of a century. Thanks to huge trading volumes, Dubai's dependence on oil is already down to 18 per cent of the GDP and policy-makers are targeting 5 per cent after a decade. They hope that a manufacturing and services base will provide not just some stability to the country's future economy, but also provide the next generation with a lucrative job market. So far, the going has been good. Non-oil GDP has increased from about $25 billion in 1993 to $45 bncurrently.

But it is manufacturing--currently comprising 11 per cent of the GDP--that policy-makers want to see increase. The Dubai government is pumping in huge amounts of money to develop the infrastructure that would attract investment in manufacturing. Most of this has gone into the Jebel Ali Free Trade Zone, the Airport Free Zone, and the Dubai Investment Park - three projects which will spearhead the country's economic diversification. While the first offers the 57-berth Jebel Ali Port within its premises for those who want to set up export units and warehouses for re-export, the second is targeted at companies manufacturing high-value goods who ship their cargo by air. The last one is best suited for those who may want to target the local market as well.

While top officials admit that the policy on what kind of industry they would like to and can attract is still being formulated, some issues are clear. Says Dubai Investment Park manager, marketing and customer services, Ahmed Mannai, "Our priorityis environmentally clean and low labour-intensive industry." That includes white goods assembly, software, and fast moving consumer goods.

And to attract that grade of industry, Dubai Investment PJSC, a $1.3-billion company that invests in joint ventures for its 22,000 shareholders, has created the Dubai Investment Park, a 3,181-hectare facility complete with housing, 18-hole golf course, restaurants, schools, and clinics. Needless to say, water, power and the best in telecommunications facilities are taken for granted and not even pitched. And authorities have not blinked at the $430-million budget for creating the infrastructure.

As Asia Pacific of Jebel Ali Free Zone regional manager Abdullah Lootah says, "We do not want a labour camp kind of manufacturing. We'd like to see even workers with a good quality of life having fun." At Jebel Ali, authorities have created housing for workers (executives they reckon would prefer to live in the city). Besides Spic and Dabur, Jebel Ali already has 189 Indiancompanies, 60 of which are in manufacturing.

At the 2.2-million square meter Airport Free Zone, where the Pentafour group is setting up its compact disc-manufacturing facility, the focus is on attracting high value-added industries. Says the free zone's director Mohammed Ahmed Al Zarouni, "With India ranked among the best software producers in the world, we are hoping that a significant portion of our investment will come from there."

The DTCM salesmen may not have to sell too hard. Historically, India has had very strong links with Dubai. Until the mid-70s, the local currency was the rupee. Families such as the Jashanmals and Wahabi, who control the largest retail and distribution networks, although in Dubai for six generations are of Indian origin. About 54 per cent of Dubai's population today comprises Indian expatriates - who have, officials admit, played an important role in creating Dubai. Indian investors, therefore, feel more at home in Dubai than the relatively hostile environment of the west.That it is just a couple of hours flying time from India only helps.

While these would be obvious benefits to the Indian investor, sentiment is not what Dubai's authorities are selling. It's about numbers for hard-nosed businessmen. Dubai's biggest attraction is its no-tax policy. But for a flat 4 per cent duty on imports, Dubai has no other taxes (In fact, authorities in Dubai are unable to provide any information on turnover or profits in their new industrial zones, as they do not tax).

Says Palmon group chairman MM Lahori, who relocated from Kandla and was in 1987 the first businessman in Jebel Ali, "There is no bureaucracy here and authorities are co-operative." From a garment manufacturer who primarily relocated to escape quotas, Lahori has now diversified into areas like refrigeration and distribution logistics software. Having seen the Jebel Ali facility being creating out of the desert, he feels that perceptions of Dubai being a center of quality products has only helped his business.

While theIndian manufacturing sector will do its own number crunching, what might swing the deal Dubai's way for sectors such as software that employ high-calibre personnel is the first-world living standards in Dubai, at well, second-world prices. While the industrial estates themselves are being equipped with plush housing, Dubai's authorities are investing much of their oil revenues in top-quality local infrastructure like roads, schools, hospitals, and housing. And catering to the tastes of expatriates is a booming leisure industry, comprising sports, restaurants and travel.

In attracting investment into Dubai, the DTCM has competition closer home. Other emirates such as Sharjah (where it is rumoured Videocon is setting up base) are emulating Dubai. Offering investment parks and free trade zones, they are beginning to create the nfrastructure. Whether the other emirates can match the quality of Dubai's infrastructure and its liberal attitude remains to be seen. The difference may be, as a consultant to the DTCMput it, "Dubai is ambitious. It wants to be first world."