Free Trade Agreement Can Give a Boost to GCC – India Bilateral Relationship

Free Trade Agreement

H.E. Sheikh Fahad Bin Mohammad Bin Jabor Al Thani, Chairman of Doha Bank, H.E. Sheikh Abdul Rehman Bin Mohammad Bin Jabor Al Thani, Managing Director of Doha Bank, Mr. Ahmed Abdulla Ahmed Al-Khal – Member, Board of Directors of Doha Bank, Dr. R Seetharaman, Doha Bank Group Chief Executive Officer, Mr. Justice A R Lakshmanan, former judge of the Supreme Court of India. Advocate Dr. VRS Sampath, founder and promoter of Madras Development Society

Doha Bank has received license to commence Banking operations in India and as a pre cursor to its entry into Indian Financial Market it hosted a knowledge sharing session on “Opportunities in Qatar and GCC” on 4th April 2014 at Hotel ITC Grand Chola, Chennai. The event was attended by H.E. Sheikh Fahad Bin Mohammad Bin Jabor Al-Thani, Chairman of the Board of Directors of Doha Bank, H.E. Sheikh Abdul Rehman Bin Mohammad Bin Jabor Al-Thani, Managing Director of Doha Bank and Mr. Ahmed Abdulla Ahmed Al-Khal – Member, Board of Directors of Doha Bank. Dr. R Seetharaman, Doha Bank Group Chief Executive Officer invited the dignitaries. The event was well attended by heads of several Indian corporates, senior bankers and senior members of Legal fraternity and members of Local Chambers of Commerce.

Free Trade Agreement

Doha Bank CEO, Dr. R. Seetharaman, speaking during the knowledge-sharing session

Speaking at the knowledge sharing session Dr. R. Seetharaman gave an insight on Global economy. He said” According to IMF outlook in Jan 2014, growth in advanced economies would accelerate markedly in 2014 to 2.2%.As a result of the December budget agreement in US, fiscal consolidation impact on growth will be limited in 2014. However severe winter impact the growth in USA. In many emerging market and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern. The emerging economies such as Turkey, Argentina and Ukraine faced political crisis in 1st Quarter of 2014.Growth in China rebounded strongly in the second half of 2013, due to an acceleration in investment however concerns of slower growth and Shadow banking emerged in 1st Quarter of 2014.The Central Banks in some of the emerging economies also raised the interest rates. Russia control over Crimea has resulted in surge in prices of agricultural commodities.”

Dr. R. Seetharaman highlighted current trends in Indian Banking Sector. He said “ In its recent monetary policy RBI had kept the policy repo rate unchanged at 8.0%.RBI is firmly focused on keeping the economy on a disinflationary glide path that is intended to hit 8% CPI inflation by January 2015 and 6% by January 2016. Since Jan 2014 RBI has shifted focus to CPI from WPI bringing its approach closer to counterparts from Indonesia to Europe to the U.S. In 2012 India had ended with credit growth at 16.3% and deposit growth at 13.3%.Bank deposits grew by 15.9% annually in 2013 while credit growth clocked 14.5% in the same period. Credit growth will remain subdued in 2014 due to overall economic slowdown. Recently RBI extended the timeline for full implementation of the Basel III capital regulations by a year to March 31, 2019.”

Dr. R. Seetharaman gave insights on bilateral trends between GCC – India. He said “In Feb 2014 India sought Saudi Arabia’s support for early conclusion of the free trade agreement with GCC countries. The free trade agreement between the GCC and India can expect to give boost to bilateral trade. India plans to launch Saudi –India Business network (SIBN) to promote commerce and trade, investment, business-to-business interactions and exchanges with Saudi Arabia. Renewable energy is an area which offers tremendous scope for Indian and Saudi companies to work together. In March 2014 Saudi Arabia and India formalized the structuring of the $750-million Saudi-Indian Investment Fund. India’s investment in the UAE is estimated at US$52 billion, excluding the companies based in free zones in Dubai, Abu Dhabi and other emirates. UAE ranks 10th among the top investing countries in India. UAE’s investments in India are concentrated mainly sectors such as power, metallurgical industries construction development, services sector, computer software and hardware. India and the UAE are working towards a Bilateral Investment Promotion and Protection Agreement to enhance investments. Kuwaiti investments in India are in excess of $ 2.5 billion. Kuwait wants Indian companies to bid for gas, railways, construct hospitals and schools and other infrastructure projects”

Dr. R. Seetharaman gave insights on opportunities in GCC. He said “Projects worth more than US$450bn are expected to be launched in 2014. Qatar, UAE and Kuwait are expected to have projects worth more than US$70bn, US$85bn and US$70bn respectively in 2014. GCC airports are planning to increase their capacities. India and GCC nations can harness strong energy relationship by extending their partnership to manufacture value added products such as refining, petrochemicals, plastics, fertilizers and pharmaceuticals. GCC is expected to attract US$57bn into petrochemical industry over the next five years. The growing demand for healthcare services coupled with regulatory changes and emphasis on quality healthcare makes the GCC huge potential for the Indian Healthcare companies. Qatar plans to spend more than $1bn in next 5 years to build and equip hospitals and medical cities. Indian economy an ideal source for sourcing and developing agro based value chain in the GCC region. Indian investors in turn have huge opportunities for investment in knowledge and skill based services in GCC, particularly in fields like IT. With greater emphasis on education sector and push for scientific research facilities in the GCC, universities and research institutes from India can use their expertise and the market opportunities to expand in the region. “

In his concluding remarks Dr. R. Seetharaman said that the free trade agreement between the GCC and India can expect to give boost to their bilateral relationship.