The Gulf Organization for Industrial Consulting (GOIC) participated in the fourth forum of GCC business owners and their counterparts from India organised by the Council of Saudi Chambers (CSC) in collaboration with the Secretariat General of the GCC Council, the Federation of GCC Chambers (FGCCC), Jeddah Chamber of Commerce and Industry and the Confederation of Indian Industry (CII). The event was held at Bay La Sun Hotel, King Abdullah Economic City (KAEC), KSA on the 18th and 19th of November.
His Excellency Dr. Ali Hamed Al-Mulla, Assistant Secretary General for Industrial Projects Sector at GOIC presided a session concerning “Indian and GCC Exports Challenges”. Dr. Al-Mulla indicated that: “The trade relationships between India and the Arabian Gulf date back to the third century B.C. and the recent discovery of oil in GCC countries fostered trade between the two parties. In addition to that, demand of Indian goods, services and labour force has increased, and with the currently changing global economic system, GCC countries perceive India not only as an economic power, but also as a potential “conciliatory” power capable of playing a positive role in supporting peace and stability in the Gulf.”
On the size of GCC-Indian trade, Dr. Al-Mulla said: “According to GOIC’s databases, the value of exports jumped from 12.377 billion USD in 2005 to 55.082 billion USD in 2014, and the value of imports increased from 9.570 billion USD in 2005 to 27.938 billion USD in 2014.”
His excellency explained that UAE and KSA are the leading commercial partners of India, and despite India’s strong dependence on petroleum imports, New Delhi is capable of cutting discrepancies by boosting its exports to the region in the form of engineering goods, textiles, advisory services and information technology. In fact, GCC countries are currently an important destination for Indian investments.
Dr. Al-Mulla underlined bilateral trade relationships between India and Qatar, he said: “India is interested in strengthening cooperation with the State of Qatar in the areas of cybersecurity and information technology. As a result, Indian-Qatari trade figures increased from 4.17 billion USD in 2008-2009 to 16.30 billion USD in 2012-2013. Although Indian exports to Qatar were limited during this period, Qatari exports to India witnessed a huge surge with the increasing Indian demand of LNG, while Qatari investments in India focused on infrastructure. In fact, Qatar’s national sovereign wealth fund is expected to invest at least 10 billion USD in India on an annual basis, more than half of which are dedicated to infrastructure investments.”
He added: “In March 2013, Saudi Arabia took a measure aiming at stimulating mutual investments: it accredited Indian companies to become the biggest investors in KSA with 625 million USD worth of investments, hence increasing investments by approximately 400 million USD. On the other hand, Saudi Arabia was ranked the 45th investor in India from April 2000 to December 2012 with total investments wort 40.90 million USD, a very humble figure compared to the potential of both countries.”
Dr. Al-Mulla explained that Kuwaiti-Indian trade figures show increasing transactions between the two countries from 10.39 billion USD in 2008-2009 to 17.67 billion USD in 2012-2013. He highlighted the remarkable size of non-oil trade between the two countries.
HE the Assistant Secretary General talked about challenges that GCC-Indian exports face, he said: “In the GCC, the rules and regulations are not unified, FDI laws are different, cost structures are diverse even within the same country sometimes, and the tariffs on imported goods are still high compared with the very low tax imposed on Indian exports in GCC countries. In addition to that, GCC countries have to pay taxes like VAT and CST. On the other hand, GCC countries face other obstacles in India such as the necessity to issue import licences and the underdeveloped Indian infrastructure which is hampering the flow of trade and investments to India.”
As to promising incentives to develop future trade relations between the GCC and India, His Excellency highlighted Indian energy security, the investment environment offered to GCC investors in India, India’s trade policy and GCC countries’ economic diversification policy.
Dr. Al-Mulla concluded by offering a number of suggestions to promote economic and commercial cooperation between India and GCC countries. He invited Indian officials to take some measures to draw GCC investments by further improving the investment environment. He also talked about the need to promote transparency by making official policies and databases publicly available and regularly updated. He said India could use its expertise in the area of SMEs to assist GCC countries in diversifying their economies, hence creating a mutually beneficial relationship. He opined: “Trade relationships between the two parties need to be promoted beyond conventional exports and imports. It is imperative to determine areas of cooperation in light of the new economic realities, like increasing Indian exports in the fields of engineering goods, textiles and advisory services. India has to assess the needs of GCC countries and investment opportunities available in the GCC to begin with, and then focus on areas in which India has a comparative advantage. The trade and investment cooperation between the two parties needs to be based on a long-term strategy and an efficient mechanism to achieve desired outcomes for both parties.”
The 4th GCC- India Industrial Forum was entitled “Opportunities and Challenges”. It was held with the participation of business owners, investors, heads and members of chambers from the GCC and India, in addition to representatives of authorities, banks and international institutions. The Forum discussed several key topics such as: investment environments in the GCC and India, promising sectors in India, strategies and policies to support SMEs, bilateral cooperation between Gulf and Indian businesswomen, renewable energies, oil and gas, food security, healthcare, funding and the role of sovereign institutions in funding projects.