The Hindu Business Line : New era of economic interaction

THE India-Gulf Partnership Summit is being viewed here as a hallmark event that signifies the new era of economic interaction between the Gulf states and India.

As the first such large gathering of nearly 350 Indian and UAE industry representatives and professionals in the UAE after a gap of many years, the summit titled "India Calling", is generating enthusiasm and expectations among delegates.

With the oil rich Gulf states eager to pump some of their surplus funds into profitable ventures overseas and India opening its doors wider to foreign investment, industry observers here believe the time is ripe for forging stronger economic ties that go beyond trade exchanges to more long term and meaningful partnerships.

Reflecting this optimism, the Indian Ambassador to the UAE, Mr C.M. Bhandari, told Business Line that India's strong economic fundamentals and bright future have generated interest among Gulf investment institutions and corporate bodies.

"Every major institution is today looking at India and this augurs well for future economic joint ventures and exchanges," he said.

Mr Bhandari was of the view that events like the ongoing summit will provide a wider platform for more exchanges between business players. "I would like future summits to include special sessions in other emirates in the UAE, so that industry players in these emirates also get sufficient exposure," he said.

The envoy pointed out that a delegation from the Abu Dhabi Investment Authority, ADIA, one of the premier UAE investment institutions, had visited Mumbai and New Delhi recently and had held detailed discussions regarding portfolio and industrial investment opportunities.

"The feedback they have given me is that they are very impressed by the strength of the Indian economy. They met several officials from banks and business houses as well as the UTI and RBI. They have evinced interest in India's booming capital market and in some projects. It is likely some major investments could be in the offing in the near future," Mr Bhandari said.

He also cited the efforts by the Indian semi-government body IL&FS (International Leasing and Financial Services) to promote investments in Indian projects and indicated that the ADIA team also held talks with IL&FS officials.

On the Indian side, he pointed out that several State Governments were showing interest in attracting investment from the Gulf states for a host of projects. "Several State delegations have visited the UAE in recent months and are scheduled to visit in the coming period. This is providing healthy exposure of Indian prospects to the UAE side," he added.

The India-Gulf Partnership summit is a long overdue, broad based exchange between industry players, according to Mr Suresh Kumar, CEO, Emirates Financial Services and President, Indian Business and Professional Group (IBPC), Dubai, co-organisers of the summit.

"India has a dominant presence in the Gulf states in terms of people, but this has not been leveraged to the maximum in terms of economic partnerships. I think this summit is the beginning of such an engagement," he told Business Line.

India's emergence as a rapidly growing economy with a GDP that is more than all the GCC states put together, coupled with its historical links with the Gulf region calls for deeper economic ties than the current trade relations and selective investments, Mr Kumar said. A GCC-India FTA agreement, which is currently at the level of bi-lateral discussions with the six Gulf states, could go a long way in boosting economic interaction, he said.

"The GCC is already on fast track FTA negotiations with the US and has initiated talks with Australia. India needs to step up the pace of such discussions with the Gulf states as it could lead to substantial investment flows. At present, there are a lot of hiccoughs that has restricted flow of investment and this needs to be re-visited keeping in mind the benefits for both parties," Mr Kumar said. Gulf portfolio investment in India at the moment is to the tune of $2.5 billion, while FDI is less than half a billion dollars, excluding the oil sector.

The IBPC plans to focus on dialogue between young Indian and GCC entrepreneurs for the next partnership summit planned for the latter part of 2006, Mr Kumar said. "Our next focus is on young leaders involving institutions like the young Arab leaders. We hope to facilitate interaction and devise a structural exchange programme."

Mr Yashwant Sinha, Indian Consul General, Dubai, said that India's trade with the UAE touched $12 billion in the last fiscal, registering a 63 per cent growth, with Indian exports alone touching over $7 billion. "Against this upbeat backdrop, this summit is an important event where both sides are looking at key areas for partnerships. There have been a lot of investments by Dubai institutions in India in recent months and Indian expertise is also being sought for joint ventures here like the recently launched Dubai Gold and Commodities Exchange. ," Mr Sinha said.

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