Bahrain is looking at increasing the economic cooperation with India. With its rich pool of high net worth individuals and a strong set of financial institutions, the country is exploring to step up investment in the lucrative Indian market. Bahrain is also bringing a large business delegation to India this week to explore ways to strengthen bilateral ties with economic cooperation and investment. Bahrain?s minister of transportation and acting chief executive of the Bahrain Economic Development Board Kamal Ahmed, in an interaction with Subhash Narayan and Timsy Jaipuria explains how the two nations can explore various business opportunities. Excerpts:
How is the trade between India and Bahrain progressing? What do you think are the ways to increase the trade between the two nations?
The ties between the two countries are progressing well ? indeed the work being done towards a Free Trade Agreement between India and the Gulf Cooperation Council (GCC) reflects just how important ties between these two regions are. The GCC is India?s largest trading partner and India is currently the third-largest trading partner of the GCC accounting for 11.5% of all the region?s trade.
In Bahrain, our non-oil exports to India in 2011 totalled more than $480m, with non-oil imports just shy of $400m and over the past four years, trade between Bahrain and India has increased threefold.
Bahrain has long been a prominent financial centre in the Gulf region and our petroleum industry has enabled us to diversify into downstream engineering and manufacturing. And as we look to adapt our economy so that we can create jobs for Bahrainis for the long term, we are increasingly developing our capacity in areas such as ICT and services ? all areas in which India has been historically strong.
Various Indian companies like State Bank of India, ICICI and Tata Consultancy Services are already operating in Bahrain and as we continue to develop, and as the Gulf market continues to grow, we believe there will be increasing opportunities for Indian firms in Bahrain.
What areas you think where Bahrain can invest in India? Have you planned any investment, if yes, kindly share some details?
India is one of the world?s fastest-growing economies, and it is clear that growth markets like India will drive global economic expansion in the coming decades. So whether it is investment out of or investment into Bahrain, India is a very important market for us. So Bahraini companies and financial institutions will, I?m sure, be looking to India as a potential market as they expand and look to invest overseas.
We are already seeing banks financing joint ventures between Indian and Bahraini companies to take advantage of opportunities both in Bahrain and in India.
How do you see investment climate in India? Do you think it is helpful for increasing the level of investments between the two nations?
What investors look for first of all is a market that is showing sustainable growth ? something that is clearly present in India. So any country that is seeing the sort of broad-based economic growth, driven by a rising middle class is going to look attractive to investors.
We know that creating the right climate for investors is not a one-time action, but a continual process. So no country is perfect and we can all do more to enable the expansion of private enterprise ? whether that is through lowering taxes and bureaucracy or investing in infrastructure and education. But India?s strengths as an investment location ? strong economic growth, skilled Anglophone workforce, a government committed to helping businesses to grow ? are very attractive and are the same strengths and principles that drive our own economy.
How do you see the trade trend in oil and gas sector between the two nations? Are you also planning to meet the oil and gas ministry officials here expressing to increase trade on this front?
Oil continues to play an important role in Bahrain?s economy, as it has done since we were the first country in the region to discover it in the 1930s. And clearly India?s rapid economic expansion is going to create a need for energy to fuel it. We are currently looking at increasing our oil production through exploring new offshore fields and I?m sure that we will continue to play a role in helping India to meet its energy needs.
What are the sectors in which your country is looking for investments? Is there any target investment figure in your mind?
Bahrain?s economic diversification programme is designed to provide sustainable long-term economic growth and create high-quality jobs for all Bahrainis. So, we are looking to attract investments that will help us to achieve those goals. So financial services and ICT are areas of focus for us where India has been historically strong. But, we are also seeing Indian investments elsewhere ? for example, from JBF Industries,who have established a factory in the Bahrain International Investment Park to manufacture polyester and metalised film. So we are really looking for investments in a range of industries.
India and Bahrain are negotiating a free trade area agreement. What, according to you, should be the quantum of trade between the two countries if the free trade agreement (FTA) is implemented?
We in Bahrain pride ourselves on the open, liberal economy we have created ? one which was ranked the 12th freest economy in the world this year by the Heritage Foundation. So international agreements that enable us to trade more easily with other countries ? such as FTAs and Double Taxation Agreements ? are very important and the negotiations between India and the GCC are a reflection of the importance of the relationship between the two regions. Bahrain already has a number of similar agreements in place.
While we can?t give an exact number on the impact on trade that an FTA would have, we know from experience that it boost trade.