A few policy catalysts to boost bilateral cooperation
There is a huge potential for diversifying India’s exports especially into project exports to the Gulf Cooperation Council (GCC) markets, says a study by Export-Import Bank of India.
While India’s trade relations with countries in the Gulf region have transformed considerably over the last decade, the structure and pattern are yet to be diversified, said the study “Enhancing India’s Bilateral Relations with the GCC Countries: Trends in Trade, Migration and Remittances”.
The study analyses the two distinct areas of cooperation in the India-Gulf economic relationship, viz. bilateral trade especially commodity trade, and migration from India resulting in a large expatriate community in the Gulf.
The study highlights that the Gulf Cooperation Council (GCC) is one of India’s largest regional trading partner, with total trade averaging more than US$120 billion during the period 2009-2019.
The study found that India continued to remain the second-largest export destination for GCC and its third-largest import source, accounting for close to 10% each of GCC’s total exports and imports.
Behind this growing economic relationship, lies the vast Indian diaspora in the region. The GCC countries are home to over 9 million Indian migrants which has resulted in a massive inflow of remittances to India amounting to US$48.5 billion in 2018.
The study notes that both these intertwined aspects of India-Gulf ties have paved the way for further expansion of India-Gulf relations.
The study finds that avenues for cooperation, driven by mutual interests, could include the healthcare sector, research and development in the pharmaceutical sector, construction and development of petrochemical complexes, infrastructure development, agriculture and food processing, education and skill development among others.
The India Exim Bank study also suggests a few policy catalysts that could help boost bilateral cooperation which could include:
- expansion of trade based on identified commodities that India has the potential to export, which would help in narrowing India’s high trade deficit with the Gulf;
- increased focus on project exports from India;
- diversification of markets;
- increased cooperation in the services sector; and
- improving trade logistics; among others.
A webinar titled “Enhancing India-GCC Relations: Prospects in Project Exports and Beyond” on 6 October 2020 was hosted by India Exim Bank.
The study was released in the presence of Munu Mahawar, Ambassador of India to Oman; Dr. Deepak Mittal, Ambassador of India to Qatar; Piyush Srivastava, Ambassador of India to Bahrain; and senior officials from the Embassy of India in Kuwait, Larsen & Toubro Limited and Afcons Infrastructure Limited.
The GCC and Indian Ambassadors urged more Indian companies to take advantage of the emerging opportunities in both the GCC and India.
Amb. Mahawar stressed that abundance of land, excellent infrastructure, ports, airports, roads, low utility costs especially low power cost, its strategic location and free trade arrangement make Oman a preferred destination for Indian Investment.
Oman in its ‘Vision 2040, has identified priority sectors for development towards diversification and India is considered as a strategic priority partner for Oman, he highlighted.
He identified the mining sector, transport infrastructure, health care as promising sectors for collaboration.
Amb. Mittal opined that huge opportunities exist for Indian exporters in the pharmaceutical sector, oil and gas sector in Qatar and offered to extend support to Indian enterprises venturing to engage with partners in Qatar.
Amb. Srivastava highlighted that opportunities exist in pharmaceutical products including alternative medicines, medical equipment, and renewable energy especially solar energy and in the fintech, digital and IT sectors in Bahrain and generally in the Gulf region. #exports #economy #GCC #investment /fiinews.com
