IBEF Research: India Inc. in the Arab World

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Introduction:

India attaches strategic importance to its relations with the Arab world. With the region's proximity to India and the common objectives of peace, stability and security that the two share, the historically established political, strategic and commercial relationships between India and the Arab world have strengthened. India obtains a major portion of its crude oil supplies from the Arab world. Besides, this region qualifies as one of the most important economic partners of India in trade, investment and joint ventures (JVs). Over the years, frequent high-level visits from both sides have led to the consolidation and expansion of bilateral relations.

The increasing number of Indian companies venturing in the Arab world has seen many Indians immigrating to the Arab world. Over 4 million Indians have settled in the Arab world, especially in the UAE, Saudi Arabia, Qatar and Kuwait, repatriating US$ 20 billion to the home country in 2005-06. However, foreign investment from Arab countries in India is significantly below potential. Even the investments from rich countries of the Arab world have been on the lower side. To expedite bilateral trade and increase investments, India aims to sign bilateral investment protection agreements with an increasing number of Arab countries. Discussions are being carried out for negotiating a free trade area (FTA) between the two sides.

Overview of the Study:

This publication includes case studies of top Indian companies that have set up their operations in the Arab world. This study was a combination of primary and secondary research, and involved the experiences of 27 Indian companies in the Arab world.

Structure of the Report:

The report covers the following sections:
• India and the Arab world - Economic and Commercial Relations: This section provides an overview on the existing economic and commercial relations between India and the Arab world. It briefly discusses India's commercial relations with major countries in the Arab world in terms of commodities imported/exported and balance of trade. Bilateral trade between the two regions, FDI inflows from the Arab world in to India and the major projects undertaken by Indian companies in Arab countries are also discussed.

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