While all eyes are on the finals of the FIFA World Cup football in Doha, Qatar, let me tell you, readers, an equally exciting story, not about football, but about an Asian miracle born out of trade and investment.
The story originates historically since the Indus Valley civilization but picked up steam with the growing trade between India and the Gulf region via dhows. The dhows set sail along with the North-East and South-West monsoon winds. Metaphorically, it is a story of the Monsoon Wedding, a marriage between India and the Gulf.
This is a story of an Asian miracle, a tale of a regional boom among global doom and a tale of India’s growing friendship with the Gulf countries, (See the FTA story between India, the UAE and GCC on page 7). Consider some basic data: In 2001, the trade between (Gulf Cooperation Council) GCC and India was less than $ 6 billion. In 2012, ASSOCHAM estimated that bilateral trade between India and the GCC is likely to cross $ 130 billion in 2013-2014. Today India’s trade and economic ties with the region are around US$ 160 billion. The surge in growth of trade and economic and commercial links between GCC and India from $ 6 billion to $ 160 billion in 20 years is truly an awesome transformation, an unprecedented remarkable story of turnaround.
Gulf’s galloping growth
All six Arab Gulf economies surged at very high rates of growth before 2012. Saudi Arabia (KSA), with 28.5 million people, the largest and one of the most powerful countries in the Middle East region, with 16 per cent of the world’s oil reserves, has a per capita income of $ 55,300. KSA is the only member of the G-20 powerful club of nations among all the six Arab countries of the Gulf. KSA assumed the G20 Presidency in December 2019, hosting the Leaders Summit held on 20-22 November 2020 in its capital Riyadh.
The United Arab Emirates (UAE), a Confederation of seven countries, including Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, Ras Al Khaimah, and Umm al Quwain, has six million residents and a per capita income of $ 68,100. Tiny and thumb-shaped Qatar, with mere 3 million residents, was growing at a phenomenal 20 per cent growth before 2007-2008, its economy, which contains 13 per cent of the world’s gas reserves, was almost doubling every five years. Its per capita income today is $125,000, the second-highest in the world. Kuwait, with 2.8 million residents, and 6 per cent of the world’s oil reserves, has a per capita income of $ 72,000. The Sultanate of Oman, geographically the second-largest country in the Gulf region, with its 34 million residents, has a GDP per capita of $ 46,100.
The island nation of Bahrain, with its tiny 1.2 million population, has a per capita GDP of $ 50,700. All the six Gulf countries are very prosperous with high standards of living for their citizens almost comparable to the rich nations of Europe and the Americas, Japan and South Korea.
Rich remittances from NRIs
There are several positive fallouts from India’s long and rich interaction with the Gulf region. According to the World Bank figures, India has $100 billion in remittances coming from abroad. Between 2016-17 and 2020- 21, the share of remittances from the USA, UK and Singapore increased from 26 per cent to over 36 per cent, while the share of the 5 GCC countries (Minus Bahrain) drooped from 54 to 28 per cent.
About 54 per cent of the total remittances of $ 71 billion coming to India in 2016-17 were from the Gulf region, a mammoth $ 36 billion annually. Between 7.5 million to 8.5 million Indian expatriates live, study and work in the Gulf region, the bulk moved there since 1973, ever since the oil prices spiked globally. The majority are blue-collar, and the minority are white-collar salariat.
Indian diaspora in the Gulf also includes traders, entrepreneurs, and billionaire businessmen. The top billionaires include the $ 5 billion M A Yusuff Ali of the Lulu Group, $ 4.1 billion Ravi Pillai, $ 3.15 billion B R Shetty, Chairman of NMC Health and Fianablr group, $ 3 billion Mickey Jagtiani of the Landmark group, $ 2 billion Joy Alukkas, the Jewellery King, $ 2 billion Sunny Varkey of the GEMS Education, Varkey Foundation and several others.
The Kutchi merchants, and the Khimjee family based in Oman are equally prosperous, playing a stellar role in the modernization of Oman. The Gulf India link remains an untold story, no less remarkable than the Silicon Valley billionaires from India. Therefore, India’s most successful FTA story is with the UAE (see page 7).
