In pandemic crisis, bridging the gulf with West

Context: As globally, bilateral and multilateral trade diplomacy is set to witness a tectonic shift towards the unknown, a strong, positive message by New Delhi to the region’s investors is crucial as both are well placed to help each other.

Negative Impact of COVID on Indo-West Asia’s numbers:

• Loss of employment: 

• Workers: In the UAE alone, more than 3.4 million Indians work.
• 70% of the small business mostly owned by Indian nations may not survive for long (Dubai Chamber of Commerce & Industry survey).
• India plans to repatriate more than 100,000 of its citizens.

• Loss of remittances: UAE alone is responsible for $19 billion in remittance (3rd largest trade after US and China.

• Dwindling oil prices: Lack of demand and dispute on output caps between Saudi Arabia and Russia will carry huge costs to West Asian economies.

• Blow to investments and reform plans: 

• The major sovereign and other financial institutions in West Asia: have hit hard due to shrinking in their real estate and retail portfolios.
• Megaprojects like $500 billion futuristic mega-city of Neom planned on the coast of the Red Sea by the Crown prince of Saudi Arabia have been stalled.

Opportunities for India: Government’s Steps

• Low oil prices: India saves up to $1.35 billion for each $1 drop in oil prices, 

• India had taken advantage of the low prices to build up its strategic reserves and is looking at o?shore storage options.

• Attract investments: 

• In the hard hit investment sector of West Asia, through a positive signal sent out by recent economic reforms in agriculture and industries.
• Announcement of an empowered group headed by Cabinet Secretary Rajiv Gauba to take necessary steps to attract FDI in India.

• Utilize reverse migration: The recently launched Skilled Workers Arrival Database for Employment Support (SWADES) will house workers’ databases accessed by domestic and foreign companies.

Way Forward: 

• Expedite land acquisition: for the $50 billion mega re?nery projects invested by both Saudi’s and UAE’s national oil companies.
• Fast track resolution litigation: must be ensured that has bedeviled the sale of a major stake of Mumbai’s airport to UAE sovereign fund.