India to double two way trade with Arabs

Written by ASHOK B SHARMA | New Delhi | Updated: Feb 13 2010, 21:33pm hrs
India has expressed the hope that the two-way trade between India and the Arab countries may strengthen fast to double to US$ 230 billion by 2014 from the current level of US$ 114 billion.

A study done by the apex Indian industry body, FICCI in collaboration with KPMG reveal an investment potential of over US$ 32 billion on both sides. Arab ministers also endorsed the study and invited Indian investments

India-Arab relationship is important as India meets a substantial part of oits fossil oil needs from the Arab world.

The optimism for doubling the two-way trade was expressed here on Monday today by the Indian minister for commerce and industry, Anand Sharma while inaugurating the 2nd India-Arab Investment Projects Conclave, organized by FICCI in association with the Indian ministry ofeExternal affairs, Leaguer of Arab States and the General Union of Chambers of Commerce, Industry and Agriculture.

The two-day conclave is being participated by 10 Arab ministers and representatives from 21 out of 22 Arab countries.

Sharma said India is determined to accelerate the momentum of GDP growth to 9% and this could only be down in partnerships with the Arab world. We need to look at areas of competitive advantages. The Gulf region has large amounts of sovereign funds and India is the right place to invest. The UNCTAD and other multilateral agencies have ranked India as one of the three most attractive investment destinations after China and the US and the World Bank study shows that returns from India were the highest amongst all the emerging economies.

The Indian minister of state for external affairs, Shashi Tharoor pointed out that an early conclusion of the India-Gulf Cooperation Council (GCC) Free Trade Agreement would give an enormous boost to the economic engagement between Indian and the Arab world. He underlined the need for working on mechanisms to institutionalize the welfare of the Indian expatriate workforce in the Arab countries, particularly in the Gulf region as this region is the home to 5 million Indian workers who send an annual remittance of US$ 30 billion..

He dwelt on the historic, cultural and civilisational ties between India and the Arab world. In the modern times this bond has been strengthened further with Indias support to the legitimate demands of the Palestinian people, resolution of Suez crisis and the Algerian independence movement.

Dwelling on the historic trade links, Tharoor said : recently to recreate the magic of times gone by, a traditional sailing boat The Jewel of Muscat has been built in Oman, in large part by boat builders from Kerala, as a replica of the 9th century dhows that sailed these waters. I had the great pleasure yesterday of setting foot on the Jewel of Muscat and admiring how, in a desire for authenticity, the builders have sewn the planks together with coir fibre, rather than using nails. The Jewel of Muscat is about to set sail on a journey from Oman to Singapore via Kerala and Sri Lanka, on the route many of our forefathers regularly sailed. I am looking forward to greeting it in Kochi in mid-March and hope many of you will join me to celebrate its safe arrival there, Inshallah.

The Deputy Secretary General of the League of Arab States, Ahmed Benhelli called for Indian investment in agriculture, IT, tourism, health and urged for cooperation in human resources development and environment. The Dean of Arab Diplomatic Corp, Larbi Moukhariq called for cementing trade and investment ties.

The Qatar minister of state for international cooperation, business and trade, Khalid Bin Mohammad Al-Attiyah said India-Arab projects can strengthen economies on both sides. India-Qatar bilateral trade has touched US$ 24 billion.

The UAE foreign trade minister, Sheikha Lubna Bint Khalid said that India-UAE trade has touched US$ 48 billion, excluding trade in fossil oil and one-third of remittances of Indian workers in the Gulf region was from UAE. She invited Indian investment in nuclear energy and renewable. She said that UAE has invested US$ 5 billion in India in energy, banking and telecom sectors.

The Iraq minister for industry and minerals, Fawzi F Hariri said about opportunities for investment of US$ 30 billion to US$ 50 billion in various sectors. By 2016 oil production in Iraq is slated to increase to 10 million barrels and this offers opportunity for investment. He invited Indian investment in farm sector. There are about 70,000 Indian workers in Iraq.

The Sudan minister for investment, George Bureng Nyombe said India is a major investor next to China. He invited Indian investment in agriculture, fisheries, minerals, hydropower generation and explore the markets of COMESA and GAFTA to which Sudan is a member. Sudan is a lnk between Africa and Arab states, he said.

The Mauritania minister for economic and development affairs, CDW Wuld-Altah said that his country want to benefit from the knowledge-based economy of India and offered Indian investors to exploit the countrys natural resources. He said that Indian investors in his country can have duty free access to European and US markets.

The Palestinian minister of national economy, Hasan Abu-Libdeh invited Indian investment in infrastructure, IT, SMEs, design industry, tourism, agriculture and pharmaceuticals.

Saudi Arabias senior vice minister of commerce and industry and industrial affairs, Khalid Mohammed Al-Sulaiman wanted Indian investment infrastructure and in four economic zones.

Moroccos vice minister for energy and mines, Mohamed Yahya Zniber wanted Indian investment in agriculture and vocational training. He urged India to plead for early release of global fund for adaptation as per Copenhagen Accord.

Syrias deputy minister for foreign affairs, Ahmad Arnous also invited Indian investment in various sectors. Djiboutis deputy minister for trade and industry, Yacoub Abdi Djama urged for Indian investment in solar energy.

The FICCI-KPMG study listed several sectoral opportunities for businesses of the two regions: Regarding agriculture it said that as demand for bulk and intermediate Indian products are intact, export opportunities to the Gulf, West Asia and North America regions would continue to exist through investment in food processing , new marketing infrastructure techniques and technology transfer practices.

Regarding energy sector it said that an increasing quest for energy efficiency and oil in India is complemented by a high endowment of oil resources in the Arab region.

On education sector it said that an established education system with renowned institutes of higher education can help the Arab world to establish a world class education system.

Regarding healthcare system it said that India and the Arab region are both at an inflexion point with a pressing need to increase capacity of quality service and for the training and development of medical personnel, opening the way for the two-way investment opportunities between the two regions

On Information Technology it said that Indias position as a recognized skill based IT destination provide the growing numbers of small and medium businesses the Arab region an avenue for outsourcing.

Regarding manufacturing sector it said that the construction sector in the Gulf is booming as a result of continued investment in the development of new and existing infrastructure. This is driving demand for construction inputs, machinery.

On developing infrastructure, railways and real estate it said that India is marked by a keen focus on building infrastructural capabilities with the opened plethora of opportunities for Arabs. Indias expertise can be used in the development of the existing railways in the Gulf countries and their plans to enhance their railway connectivity. Indias rising real estate demand calls for a large scale project management specialist which Arabs have developed over a period of time.

Regarding telecom sector it said that Indias foray in the data services market can be supported through Arabs specialization in 3G through strategic alliances. Relatively lower mobile penetration in small Arab countries provides a budding market for established Indian players.