Building on the strong bilateral trade ties, India should now look to align with the Gulf Cooperation Council (GCC) on the investment front, R Seetharaman, Chief Executive Officer, Doha Bank, has said. Both sides should create a “GCC-India Infrastructure Bank” to bolster investment ties and tap the synergistic growth opportunities, he told BusinessLine here.
India is emerging as a stronger player than the rest of the world and everyone around the world is taking notice, he said. “There is a new momentum going between Gulf countries and India. Trade is going to improve further. Remittances are coming. But investments have not come in as much as they should.”
He expects investments into India from the Gulf States to pick up as the latter look at diversification in the wake of fall in oil prices. “They (Gulf States) all believe India is the right destination and logical fit now. There is a change in the market preference — that is India,” he said.
Repayment option Talking about the GCC-India Infrastructure Bank, Seetharaman pointed out that India is, on an average, paying out nearly $100 billion for its oil related purchases. “India could say that instead of my paying you (Gulf States), the same could be invested as FDI in India. There could be a five-year moratorium arrangement. From the sixth year, the normal process could be resumed and existing commitments met,” he said.
These resources could be channelled into the GCC-India Infrastructure Bank to fund infrastructure development in India. Seetharaman also said there is marked improvement of investment inflows into India with the opening up of the economy.
“More investments will flow from Gulf States into India if a single window is presented and there are enough projects with exit strategies for investors,” he said.
SME opportunities Seetharaman also sees ample opportunities for small and medium enterprises (SMEs) in India to establish a presence in the Gulf.
“I want more Indian companies to come (to the Gulf). SMEs have bigger opportunities. They should set up businesses in free zones,” he said. Last year, Gulf States spent nearly $175 billion for various projects.
On the bilateral investment protection agreement, Seetharaman noted there is already one between India and the GCC. However, individual members would have to separately approve, or enter into, such agreements. The UAE has done it and others are expected to do it, he added.
At present, annual bilateral trade between India and the GCC stands at over $130 billion.