It is a rare bilateral state visit where the term “historic” is not trumpeted by media and officials surrounding the event. Rarer still is a meeting where that term is actually justified.
By Dharmi Magdani
It is a rare bilateral state visit where the term “historic” is not trumpeted by media and officials surrounding the event. Rarer still is a meeting where that term is actually justified. And yet last weekend’s visit to the Kingdom of Bahrain by Prime Minister Narendra Modi was exactly that – the first ever visit to the country by an Indian Prime Minister. That ties between the two nations stand longer and deeper than most only underscores the strategic importance of the visit from a bilateral relationship perspective.
Indeed, Bahrain and India’s trading relationship stretches back millennia to the days when the early Dilmun and Indus valley civilisations exchanged pearls and spices. Today, bilateral trade stands at some $1.3 billion, and the focus has shifted to aluminium, iron and steel – a trend set to continue given Bahrain’s large infrastructure project pipeline. There is a sizeable Indian diaspora in the Kingdom – at some 400,000 the largest foreign community – and more than 20 branches of prominent Indian companies registered, not to mention well over 3000 registered joint ventures. Some prominent names include TCS, TechMahindra, Chemco plastics, Electrosteel, ICICI & SBI, Mukta cinemas
The Prime Minister’s inaugural visit comes at a time when this ancient relationship is once again on the cusp of exciting change – towards service exports, an area which could see the two countries quickly enhancing economic ties. Bahrain has positioned itself as a strategic fit when it comes to synergies in areas such as FinTech and ICT – areas where India is an emerging power – and recent Bahraini delegations to India have focused on bringing Indian technology companies (scaleups) & startups and investment to those sectors of its rapidly diversifying economy.
For example, in December 2018, an economic delegation led by the Bahrain Economic Development Board (EDB) – the investment promotion agency with offices in Mumbai – saw the signing of an agreement with the Indian state of Maharashtra to create a framework for cooperation in FinTech innovation and knowledge-exchange. Now Indian cryptocurrency exchange Belfrics is one of several FinTechs testing innovative technologies in Bahrain’s regulatory sandbox. In the first half of 2019 alone, eight new projects in Bahrain’s ICT sector were started by Indian companies – more than any other country – bringing investments worth $3,117,405.
Bahrain’s nimble and innovative regulatory environment with 0% corporate tax and 100% ownership is what makes the country a gateway for Indian startups or corporates seeking access to the growing $1.5 trillion Gulf market. The Central Bank of Bahrain (CBB) have pushed forward initiatives that are playing a vital role in creating a favourable environment for digital businesses ranging from data privacy and competition laws to open banking, cryptocurrency and the most recent, robo advisory & Insurance aggregators. All this against a backdrop of a concerted government shift to the cloud.
India’s economy is developing just as quickly, and the South Asian nation has the ambitious goal of becoming a $5 trillion economy. Bahrain will have a clear role to play here for amibitious Indian companies with growth plans for the region, just as India will be key for Bahrain’s socio-economic development. The announcement on the space and solar energy programme further cements these ties, as will the introduction of the RuPay card in Bahrain, which has enormous implications for tourism and business between the two countries. As said by PM Modi: “ Now you will be able to say ‘Bahrain – Pay with RuPay’”.
With many years of shared goals, trade and ever deepening partnerships, the historic visit by the Indian Prime Minister could not have happened at a more crucial time.
The author is Regional Director – India, Bahrain Economic Development Board (EDB)