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Keynote address by Secretary (CPV&OIA) at LEADS 2020 FICCI Seminar on Gulf and West Asia Reimagining Business Beyond Oil

October 14, 2020

I appreciate this opportunity to speak to you about India’s engagement with the Arab region, in the Gulf and West Asia. It is multifaceted and there are opportunities that lie ahead. My congratulations to FICCI for taking the initiative to host LEADS 2020. It is a timely discussion to explore the way ahead in a rapidly transforming world.

Covid was an unprecedented disruption, at all levels, across the world. It was not only a health crisis but also imposed socio-economic challenges. Global economy slumped, social interaction was curtailed and individuals were fearful. It was imperative for the global community to coordinate efforts in the fight against coronavirus. India reached out and extended cooperation to more than 150 countries across the globe. India’s response to Covid was impressive and the spread of the virus was slowed down; we saw high recovery and low death rates.

With the Arab world, we cooperated on repatriation of stranded citizens, in both directions. Vande Bharat Mission, the largest repatriation exercise, was possible because of the active support from our partners in the region. We thank you for your cooperation. India provided emergency medical supplies to several Arab countries and deployed medical teams, emerging as the first provider of humanitarian assistance to Covid. Thousands of Indian healthcare professionals went to several countries in the region to help them address the challenge of Covid. We had cooperation in Covid research and testing. We are ready to support in vaccine availability from India, as we will be the largest producers, once the vaccine is ready.

We have to discuss how to redesign our interactions while accepting that the coronavirus may not be completely eliminated. In the new-Covid era, there will be changes in social interactions, institutional exchanges and individual preferences. At the economic level, our new normal will depend on the revival of old business, the innovation and complementarities created and the new businesses engaged in. As business leaders, you will give shape to our economic engagement.

Friends, we may be situated across the seas but are not distant. In fact, we are familiar with each other as we had contacts and exchanges for centuries. Today, the Gulf and West Asia is seen as part of our extended neighborhood. This special relationship highlights the importance of our relations, priority to its further development and reflects our shared aspirations and intimacy.

The key elements of our economic engagement are characterized by energy security, food security, human resource exchanges, growing trade and investment relations and strong connectivity. It is multi-faceted and extensive. I see our relations developing on the strong foundations of our present exchanges, while incorporating new opportunities emerging on both sides.

The two biggest items in our current bilateral cooperation, namely energy security and human resources, are also the areas which have scope for development that needs to be explored.

On energy security, 53% of India’s oil imports and 41% of gas imports come from the region. India has stakes in oil blocks in Iraq, Syria, Libya, UAE, Yemen and South Sudan. The nature of our partnership has evolved from mere buyer and seller relations to participation in upstream & downstream projects, joint ventures in refineries and building of strategic oil reserves. But we can do more.

We can explore the forging of partnerships and investments to develop the oil and gas reserves of India. Developing the significant fields in Kutch district, Cauvery basin, Mahanadi basin, Hugli basin and offshore locations in Bay of Bengal will broaden hydrocarbon production and provide win-win solutions longer into the future. Further, the movement towards alternate energy sources is leading to a new partnership in renewables. We are happy that a number of countries in the region are associated with the International Solar Alliance. Collaboration in solar and other renewables, where efficient technologies are being developed, will give a more rounded context to energy security for both sides in the long run.

The second key area of our bilateral cooperation with the region, particularly in the Gulf, is human resources. Indians were the largest expat community in region, with 9 million workers and professionals (30% of all expat work force), who also remitted $48 billion to India, which helped domestic development. At the same time, Indian expats contributed greatly to the development of the Gulf and West Asia region and there was wide recognition and appreciation of their role by the Gulf states. In fact, Indians were seen as the preferred migrants in the region. Centuries of interaction influenced our cultures, particularly through films, music and food, and now even cricket. But we can do more.

With the changing nature of industry and services, the introduction of new technologies and the development of new skills, we can leverage our interaction on the human resources front to one that is smarter and more sustainable. Mobility agreements of the future can focus on the integration of our official migration platforms, such that there is better flow of information between the foreign employer and the potential worker or professional. This will facilitate selection of better and more skilled candidates on the one hand and improved job security on the other. Skill mapping and skill matching between the two sides will similarly reduce transaction costs of hiring, ensure guarantees of more competent work-force and enhance prospects of better compensation. Thus, the human resources exchanges can see a new horizon which will ensure benefits to both sides.

Our economic engagement is the most vibrant aspect of our growing relations. This is an area with tremendous potential. Two-way investments can increase significantly, with sovereign wealth funds and portfolio investments from the Gulf region and Indian corporate investments playing a leading role. Similarly, diversification of the trade basket beyond hydrocarbons, to include engineering goods, gems and jewellery, precious metals, food products, textiles and chemicals in our exports and new products in our imports can give impetus to our trade relations. The development of joint projects on both sides and in third-countries, stronger corporate presence, expansion of connectivity and people-to-people exchanges can add a new dimension to these ties.

I would now like to dwell on a vision for the future. The LEADS 2020 agenda is not for crystal ball gazing but seek practical and business-like ways to adjust to the changing world, to optimize opportunities and to maximise economic returns. As I mentioned earlier, our relations are founded on strong traditional ties and deepening political understanding. Our strategic partnerships in the region have imparted strong momentum to our bilateral ties. The time is opportune for our economic relations to be stepped up to a higher level to match the understanding at the political level.

From a practical perspective, this would be best achieved by linking up with each other’s development priorities, focusing on future oriented technologies and deepening of people-to-people exchanges. With both India and the Arab region engaged in reforms and transformational changes in the economy, the strong political understanding and goodwill between the peoples can take economic engagement to a higher level.

The key elements of our future endeavours may focus on :

First, Aatmanirbhar Bharat provides a vision of India’s plans to become a $5 trillion economy by promoting Make in India - Make for World through integration with the global economy. The thrust in future will be on joint ventures in infrastructure and manufacturing and integrating into supply chains. Another focus will be on innovation and start-ups, such that entrepreneurial collaborations are future oriented. The success of Indian start-ups in IT, e-commerce, hospitality, logistics and others can leverage higher growth in India-Arab economic ties. Arab Sovereign Wealth Funds can play a key role in this. At the same time, potential exists for Indian investments in the Arab economies, which will be attractive to corporate India. Many Arab countries have FTAs with EU and USA, besides being ideally placed for third country trade and investments. Arab countries and Indian business can both benefit by plugging into each other’s economic growth and development priorities.

Second, New Emerging Technologies, especially in ICT, consultancy, fin- tech, logistics, edutech, healthtech and others have business potential. These will promote efficiencies and leverage future growth and development. High Technology cooperation, especially in Industrial Revolution 4.0, defence and space has potential to be stepped up. With the increased participation of private sector in both areas, the potential for cooperation is much higher. In defence sector, we can expand equipment and armament export. In space sector, there is potential for training, launch of satellites, sharing of satellite data and others. Cooperation between Centres of Excellence will stimulate continued growth. We need to transform a segment of our economic interaction to an "ahead of the curve” partnership focused on technology collaboration, R&D and high capital- intensive projects that drive future-oriented growth.

Third, high-level exchanges between India and the Arab world have promoted deeper understanding and cooperation. Business community can develop deeper links, based on each other’s national priorities and development plans. Cultural, academic, scientific and other people-to-people exchanges will promote good will among the people and facilitate economic engagement. The relations that we have enjoyed across the Arabian Sea for centuries can be consolidated with the incorporation of the new winds of change sweeping across our region. Thank you!

New Delhi
October 14, 2020


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