PM’s Oman-Qatar visit to boost investment, energy securityNovember 8th, 2008 - 11:25 am ICT by IANS
Muscat, Nov 8 (IANS) Prime Minister Manmohan Singh’s visit to Oman and Qatar Nov 8-10, his first in the over four-year tenure of the United Progressive Alliance (UPA) government, is expected to ring in a new chapter in India’s relations with Gulf countries.The visit should not be seen from only the perspective of Oman and Qatar, but also from that of the Gulf as a whole since the region is being seen as a key partner in India’s growth in the 21st century.
Apart from the 4.8 million-strong Indian diaspora, who form a significant chunk of the Gulf workforce, the region is important for two reasons - energy security and bilateral investment and trade.
As the world grapples with a financial crisis sparked by the credit crunch in the West, the Gulf is turning out to be a key player in the world economic order.
“The current international economic and financial situation provides a unique opportunity for India to leverage the vast surplus funds in the Gulf for our development needs, and to accelerate trade and investment flows into each other’s countries,” Manmohan Singh said in a statement ahead of his visit to the region.
One of the highlights of the visit will be the signing of an India-Oman Joint Investment Fund.
The decision to set up the fund was taken during the visit of Oman’s Deputy Prime Minister for the Council of Ministers Sayyid Fahd Bin Mahmoud Al Said to New Delhi in December last year.
“The fund is intended to create seed capital, identification of infrastructure projects in India and Oman, and creating special purpose vehicles,” India’s Ambassador to Oman Anil Wadhwa told IANS.
When India’s Minister for External Affairs Pranab Mukherjee visited Saudi Arabia in April this year, he had said that there is scope for investment of $600 billion in India’s infrastructure sector.
And now, in the wake of the global financial crisis, various surveys and research reports have stated that India would turn out to be a key destination for investors from the region in the near future.
But at the same time, some say, India’s long-term economic outlook will depend upon the government’s ability to invest in infrastructure.
Even as the Gulf is witnessing a $1.9 trillion construction boom, investors of the region have been increasingly looking to expand their portfolios abroad. By all accounts, India and China figure prominently in their plans.
Boosting bilateral trade will be another key area that the Indian side will explore during meetings with Omani and Qatari leaders. A free trade agreement between India and the Gulf Cooperation Council (GCC) will figure prominently, as Oman is hosting a key GCC summit this year.
Apart from Oman and Qatar, Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates (UAE) comprise the GCC and India figures as a major export-import partner for all these countries.
Bilateral trade between India and Qatar stands at $2.6 billion, boosted largely by Qatar’s gas exports to the subcontinent, while that between India and Oman is expected to touch $1 billion by the end of this year.
While India’s exports had for long been consumer items, foodstuff and industrial equipment, information technology has now assumed great importance too.
As the West, the traditional market for India’s IT firms, reels under a global financial crisis, the Gulf is an alternative with great potential.
According to International Data Corp figures, the Middle East and African IT market is expected to soon reach $80 billion from $51 billion in 2008.
The prime minister’s visit to Qatar will also underscore the region’s importance for India in terms of energy security.
“We attach great importance to our ties in Qatar, which is one of the largest and most reliable suppliers of our energy needs from the region,” Manmohan Singh said in his statement.
It was in 1999 that India and Qatar signed an agreement, according to which Qatar started supplying 7.5 million metric tonnes of liquefied natural gas (LNG) per year - five million metric tonnes to Dahej in Gujarat and 2.5 million metric tonnes to Kochi in Kerala.
This has significantly increased India’s profile in Qatar and vice versa. But India wants to upgrade the current buyer-seller relationship with Qatar in this regard into a more sustainable partnership.
“Given the complementarities that exist between us, I am confident that we can build a mutually beneficial strategic partnership in this sector,” Manmohan Singh said.
This will mean opportunities for Indian companies to participate in upstream and downstream activities in Qatar’s gas fields.
Manpower development and labour welfare issues will also come up for discussion as Indians form a vast majority of the Gulf’s workforce.
India already has a longstanding labour welfare pact with Qatar and this time a manpower development agreement will also be signed with Oman.
There are around 500,000 Indians in Oman and 420,000 in Qatar and the prime minister’s visit will surely mean a lot to the Indian diaspora in this part of the world.
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Tags: credit crunch, deputy prime minister, global financial crisis, india and oman, indian diaspora, infrastructure projects, infrastructure sector, manmohan singh, prime minister manmohan, prime minister manmohan singh