Besides the lack of direct sea route and security, political uncertainty, and fear kept away the Indian businesses from Iraq since 2002.
Besides the lack of direct sea route and security, political uncertainty, and fear kept away the Indian businesses from Iraq since 2002. With the bilateral trade touching $19 billion between 2017-18, there are huge opportunities for Indian companies in various sectors including commodities, infrastructure and crude oil.
In an effort to reclaim the lost markets, in association with the Department of Commerce, Trade Promotion Council of India (TPCI) led a delegation of Indian exporters to four Iraqi cities for rebuilding confidence to restart trade with that country. The delegation had exporters of tea and other commodities like confectioneries, spices, ready to eat food, fresh & frozen fruits & vegetables and pulses.
Through the Indian embassy in Iraq, the delegation had visited Baghdad, Najaf, Karbala and Erbil, to meet with prominent buyers. There were meetings with the Minister of Trade in the Iraqi government Mohammed Hashim Al Ani, and senior officials in the company of senior officials of Ministry of Trade and of Foreign Economic Relations of Iraq. They also had meetings with representatives and members of Iraqi Indian Economic Cooperation Council, Iraqi Indian Business Council, Federation of Iraqi Chamber of Commerce and Najaf Chamber of Commerce.
According officials, “Lack of formal banking system between the two countries is keeping the Indian exporters away from Iraq. Pre-2002, there existed a good banking system in place between the two. This issue is expected to be resolved soon.”
According to Khaldoon Tareq, Commercial Attache in the Iraq Embassy, New Delhi, “Iraq is supplying petrol to India and has exceeded Kingdom of Saudi Arabia in current year. After 2003, most of Indian companies were afraid to enter Iraqi market but now when the perception about security risk has changed, Indian companies are eager to enter into the Iraqi market with 34 million consumers and an increasing per capita income annually due to positive economic growth.”
The bilateral trade between the two countries has exceeded $ 19 bn in 2017-2018 and Iraq has ranked 10th in the list of India’s trading partners. In the 45th session of Baghdad international Fair which was held from Nov 10-19, in Iraq, more than 46 big Indian companies participated in this major event.
Mohit Singla, chairman TPCI, points out that “Direct sea route cannot be blamed as the trade is being diverted through the Dubai route. You cannot attribute the lack of trade between India and Iraq to lack of direct sea route as the trade is being diverted through Dubai. If Sri Lankan businessmen can do trade in the existing set-up, so can India.”
“The major issue was fear and the delegation that visited Iraq last month was the first of its kind in an effort to help the Indian businesses to change their perception to the Iraqi market,” Singla added.
Before 2002, India was exporting $ 52.46 million worth of tea to Iraq, which constituted 73.35% of the overall tea import by Iraq from foreign countries, with Sri Lanka far behind, exporting $19.06 mn worth of tea with 26.64% market share.
India is exporting goods especially food products including rice, beans, Sugar and also another items such as steel, pipe lines electrical items, motors, Rickshaws, cycles, construction materials such as tiles, granites, sanitary ware.