The current slowdown in the Gulf region, especially in the UAE, may bring an unexpected advantage for India?s construction sector. The exodus of skilled workers from that region could help the Indian industry to bridge the critical gap in the workforce.

The return of the Indian workers is coming at a time when the construction sector in India is passing through a difficult time and is in dire need of skilled labourers. Some analysts have said that the exodus out of the Gulf region is purely a temporary phenomenon.

Earlier this week, minister for overseas Indian affairs Vayalar Ravi informed Parliament that nearly 50,000 to 1,50,000 Indian workers, most of them from the Gulf countries, have probably returned to India due to the global economic slowdown.

In his written reply to a question, Ravi had told the Lok Sabha that the workers in the United Arab Emirates seemed to be most affected.

However, the Indian missions in Saudi Arabia, Kuwait, Bahrain and Qatar have not reported any ?large-scale adverse impact on Indian workers?, though there have been ?reports of some job losses?.

Diplomats of the Gulf region told FE on condition of anonymity that the situation in the region, particularly in the UAE, is in bad shape as a lot of construction work has been put on hold due to the financial meltdown.

?No fresh projects have been unveiled in the UAE, not many have returned from other Gulf countries; the Kingdom of Saudi Arabia does not issue re-entry visas on the expiration of the three-month visa,? said a diplomat from that country.

According to Ficci officials, ?Recent years have witnessed significant growth in the Indian investment flows into the region. In Saudi Arabia alone, India is now the fourth largest investor, ahead of Japan. Indian investments are booming from $250 million three years ago to $1.2 billion by 2007 end.?

Indian companies have established more than 157 joint ventures between 2000 and 2006 in Saudi Arabia. These are in sectors as diverse as management and consultancy services, construction, telecommunications, information technology and pharmaceuticals. There are also flourishing collaborations between companies in design, consultancy, financial services and software development, officials from Ficci added.

?Several of these workers have returned to India only temporarily, that is, on leave without pay and expect to go back once the economy revives and projects start,? said officials.

Gulf countries account for 90% of Indian immigrants, most of them blue-collar workers.

It is estimated that more than $2 trillion investable funds are lying at the disposal of Arab countries which can be targeted for further growth and development of India?s infrastructure, industrial and services sectors on a sustained basis. According to a Ficci analysis, the total export-import activity between India and the Arab countries stood at $102 billion in 2007-08.

Despite the current economic scenario, wherein European and US economies are hit the hardest, India, with projected growth rate of over 6.5%, is still viewed as a stable and growing market by Arab business houses. This indicates towards significant increases in India-Arab trade in the coming years.

Despite UAE faring badly due to the current economic churnings and many of its sectors recording a decline of over 30-40% in their businesses, Indian companies are unanimous in their opinion that the Emirates, followed by Oman, have been able to retain their pre-eminent position as ideal business destinations for attracting Indian businesses.

However, according to UNCTAD report, more than four-fifths of 2007 FDI into West Asia was concentrated in three countries: Saudi Arabia, the UAE and Turkey. A growing number of energy and construction projects, as well as a notable improvement in business environments, attracted FDI to countries of the Gulf Cooperation Council (GCC).

Direct entry, hassle-free process and better regulations to get visas are some of the issues high on the agenda of Indian corporates having direct business interests in the region.

?By initiating such reforms, Arab countries would facilitate easy movement of Indian business houses for undertaking a number of projects. This will have a favourable impact on the cost of completion of projects in hand as Indian companies would not be forced to recruit workforce from other countries due to visa cap and other regulations restricting the number of people coming from specific countries,?observed officials.

Bridging the gap

•Nearly 50,000 to 1,50,000 Indian workers, most of them from the Gulf, have probably returned to India due to the global economic slowdown

•The situation in the region, particularly in the UAE, is in bad shape as a lot of construction work has been put on hold due to the meltdown

•The workforce is returning at a time when the construction sector in India is passing through a difficult phase and is in dire need of skilled labourers

•Indian companies have established more than 157 joint ventures between 2000 and 2006 in Saudi Arabia

•Total export-import activity between India and the Arab countries stood at $102 billion in 2007-08