Wednesday, September 20, 2017

Trade Zone

Bahrain beckons


By SHRIKANT RAO in Mumbai

The word gulf, not the geographical region that bears that name, can be viewed as a misnomer in the context of India-Bahrain relations. And much of that has got to do with continuous engagement and ‘closeness’ between the two countries that date back to several millennia.

 

In circa 2014 we have 350,000 or more Indians, who constitute a third of the 1.2 million population of the Kingdom, as evidence of that strong connection. The fact was further underlined last month with the historical visit of His Majesty King Hamad bin Isa Al Khalifa to India after a hiatus of 30 years.

 

The oil rich nation, as part of its ‘Look East Policy’ is now seeking to consolidate its long standing partnership with India in several areas as was evident from the agreements signed between Manama and New Delhi to bolster trade and business. 

 

 

Dr. Hassan Fakhro, Minister of Industry and Commerce, Bahrain, told this writer, “It is well known that our relations are characterised by strength and depth which extends beyond commerce and trade. We hope to build on the long legacy, explore opportunities for greater cooperation and partnership. We would like Indian firms to capitalise on the strong people-to-people contacts and to enhance investments in Bahrain.”

 

ADVANTAGE BAHRAIN

 

Indian construction majors – not to mention IT firms like Tata Consultancy Services, TechMahindra, Rolta, 3i Infotech and Aptech – have always had a very strong presence in Bahrain, and by extension, the countries of the Gulf Cooperation Council Countries. India-Bahrain bilateral trade stood at $2.15 billion in 2012-13. It included $825.3 million worth of oil India imported from Bahrain.

 

With the debilitated economic conditions within the country which was seen the Indian Rupee take its worst beating last year,    Indian businesses are increasingly looking to invest internationally, particularly  in countries like Bahrain to keep up growth momentum.

 

Around 2,200 Indian companies have set up operations in Bahrain and the number is expected to grow rapidly in the coming years. Doing business in Bahrain has become increasingly attractive because of the reforms and diversification thrust launched by the Kingdom in recent times in pursuance of its Vision 2030 programme. Bahrain is also an ideal location for Indian businesses to service the trillion dollar market in the Middle East and North Africa (MENA) region.

 

It is the only country in the GCC to have a Free Trade Agreement with the United States of America, and offers zero corporate tax with an environment having the lowest operating and living costs. Further to this, the Kingdom has      distinguished itself by allowing 100 per cent foreign ownership in 95 per cent of business activities without the requirement of a local partner.  More than anything else, new job opportunities continue to attract a large number of Indian expatriates to Bahrain.

 

Ergo, the Bahrain India Business Forum organised by the Confederation of Indian Industry (CII), both in New Delhi and M umbai, and which saw a high level delegation from the Kingdom participating, set the tone for continued engagement and presenting a huge opportunity for both sides to explore business prospects and tie-ups.

 

EYE ON INDIA

 

Recent economic reform measures easing regulations on foreign investments in various sectors, including retail and telecom, has made India attractive for Bahraini investors. Among the areas which firms from that country are eyeing keenly are real estate, hospitality, retail, IT, industrial corridors –  projects like the Delhi-Mumbai Industrial Corridor, Mumbai-Bangalore Industrial Corridor, Bangalore-Chennai Industrial Corridor and the Amritsar-Kolkata Industrial Corridor – and the new smart cities and national manufacturing zones being contemplated 

 

Ahmed A Bin Hindi, Chairman, Bahrain Businessman’s Association, whose firm is a major player in automobiles and IT, said, “The prospects for co-operation in several areas are indeed enormous. We see great potential for Bahraini investments in India particularly in the south of the country.”

 

Bin Hindi, who has been visiting the country to establish business linkages for his firm, should know.  The confidence also stems from the huge turnout of representatives of industry at the Mumbai edition of the Bahrain India Business Forum.

 

BAHRAIN BOUND

 

Veritably there is a growing interest in Bahrain among Indian companies, both as a ground for business operations and as a destination for investment. The potential is huge.  For instance, Bahrain is embarking on projects worth nearly $4.43 billion involving the construction of thousands of houses, power facilities and water projects which are intended to upgrade the island nation’s infrastructure. This is part of a $10-billion Marshall aid package approved by its GCC partners three years ago. A new ‘Economic City’ which will create a new paradigm for Bahrain through the integration of all aspects of services, industry, manufacturing and an urban lifestyle, and will host a variety of new enterprises in niche industries, is at a feasibility stage.

 

It is easy to see that Bahraini leaders, as part of their diversification strategy – the key factor is reduction in dependence on oil – are gung ho on investment from India across sectors. “We know for a fact that Indian companies are looking for new markets. Bahrain is the ideal investment destination for them,” trills Vivian Jamal, Executive Director, Business Development, Bahrain Economic Development Board (BEDB) citing the major competitive advantages offered by Bahrain in terms of cost of gas, electricity and manpower, not to mention single window access for all permissions to do business.

 

Abdul Moeed Khan, Director Marketing, Safa Group, an Mumbai based firm which supplies human resources and tools for the construction and industrial sectors in Bahrain and the Middle East, is led to say, “Bahrain is the best of all the GCC countries when it comes to doing business.”

Khan is not the only Indian singing paeans to the Kingdom’s liberal milieu for business.

 

Ebrahim Sonde, Vice President, Business Advisory, Riyada Consulting, a Manama firm which is active in diversified sectors like oil and gas, construction, banking and finance, IT and telecommunications, says, “The biggest draw for Indian EPC firms in Bahrain is that it is business friendly apart from the fact that there are a lot of infrastructure projects coming up there and in the region. There are very big opportunities to be tapped in areas of development like railways, hospitals, social housing projects, wastewater treatment plants etc. A lot of projects will come up for bidding. I estimate around $1-2 billion worth of contracts being signed within 2014.” Incidentally Sonde’s firm has been involved in offering consultancy and logistical – manpower, material and equipment – support as a local partner to Indian construction majors like Afcons, L&T and Punj Lloyd in several projects like the Mina Salman Interchange and the airport expansion programme.

 

At the Bahrain India Forum several agreements were signed between the two sides spanning a range of industries from information technology, banking and construction to petroleum to exports promotion.

 

It is not difficult to see that the future between for the two countries looks decidedly brighter than the past.




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