Abu Dhabi: UAE companies are eyeing new opportunities as India and the UAE announced plans to boost investment and increase trade after Indian Prime Minister Narendra Modi’s historic visit earlier this week.
Modi visited the UAE on August 16 and 17 in order to attract investments and boost the Indian economy. He met business leaders and offered them investment projects worth $1 trillion (Dh3.67 trillion).
According to the Joint statement issued by India and the UAE, the $75 billion India-UAE Infrastructure Investment Fund is aimed at supporting India’s plans for rapid expansion of next generation infrastructure in railways, ports, roads, airports and industrial corridors and parks.
Gary Dugan, Chief Investment Officer at National Bank of Abu Dhabi said the Indian government has made a very important commitment to regenerating the infrastructure of India.
“The potential payoff for the projected investment could be substantial. The country lacks sufficient high quality roads, trains travel so slowly that a taxi can cover the same journey in less time,” said Dugan in en emailed statement to Gulf News.
He said the country also lacks energy production leading to constant power outages.
“There are some very easy wins with respect to investment in basic infrastructure that could have an immediate payoff for the country and investors. We expect the major construction companies of the region and the energy industry to benefit most from the infrastructure fund initiative.”
In a presentation given to UAE based businessmen at Masdar City, Modi offered investment opportunities to the tune of $1 trillion. He said the government will take urgent steps to address concerns of the UAE businessmen and erase deficit of 34 years.
Modi is the first Indian Prime Minister to visit the UAE in the last 34 years. Indira Gandhi came to the UAE in 1981.
“We have lost 34 years. I want to erase the deficit of these 34 years. I want all of you to come to India and make 21st Century Asia’s century,” said Modi addressing a group of top businessmen from the UAE.
Lulu International, the retail chain group headquartered in Abu Dhabi, said that they formed a core task team to boost their investments in India.
“The team will soon visit India to look for opportunities. The visit of Modi has increased the confidence of investors and given new impetus to bilateral trade ties,” a spokesperson of Lulu Group told Gulf News.
The group is set to increase its investment in India. It is planning to spend $920 million in Kerala in building shopping malls and a logistics and warehouse facility in the next two years.
It is also investing more than Dh2 billion in Telangana in setting up a food processing unit and shopping mall.
“The investments in India will go up in the coming years. We have many plans.”
A number of UAE based companies are involved in projects. There is an estimated $8 billion UAE investment in India of which around $3.01 billion is in the form of Foreign Direct Investment. UAE is the tenth biggest investor In India in terms of FDI.
Emaar group is active in the real estate sector. Emaar and India’s MGF Development Limited joined together to form India’s largest FDI in real estate amounting to over half a billion dollars for projects with a capital outlay of $4 billion.
Dubai Ports World, which is operating major ports in India including in Gujarat, Maharashtra, Tamil Nadu, Kerala and Andhra Pradesh is investing over $2 billion. Abu Dhabi National Energy Company, Taqa, is involved in a power plant in Tamil Nadu and has investment plans of about $250 million.
The Abu Dhabi Investment Authority (Adia), the sovereign fund owned by the Abu Dhabi government has 12 per cent stake in Indian Company Infrastructure Leasing and Financial Services.
Dugan said India is a natural market for the UAE to invest in.
“Whilst the UAE doesn’t lack money, it lacks people. India can be an important manufacturing base for UAE companies and India is clearly a very important market for the products and services of the UAE.”
However, he said companies trying to invest in the country have a met a wall of regulations and corruption that has, at times, seemed insurmountable, or at the very least delayed projects by months and years.
“The new government has made it a priority to bring down these barriers to doing business. The land acquisition bill, currently being debated in parliament, is a key element of the changes needed.”
DP World in a statement on Wednesday reiterated the company’s commitment to enabling India’s growth and economic development through its operations in the country where it supports over 32 per cent of India’s container trade.
“Building on the historic ties and strong friendly relations between the UAE and India, DP World has established a strong market position in India, shaping the future of the maritime terminals industry and investing over $2 billion,” DP World said in a statement.
Sultan Ahmad Bin Sulayem, DP World Chairman said they have played a key role in serving India’s growing trade for more than a decade and helped redefine the container terminal business by introducing new technology, world class infrastructure and international operating practices.
“We remain committed to our operations there which form an important part of our global network,” he said.
Sultan Bin Saeed Al Mansouri, UAE Minister of Economy said the country is keen to invest in real estate sector, infrastructure, real estate and tourism industry.
“UAE investors can play a role in India’s plan of building 50 million housing projects by year 2022. The UAE companies have the know-how and capability to provide something like that. We believe this is an area we will be interested in investing,” Al Mansouri told Gulf News after attending the business meet with Modi on Monday.
Bilateral trade stands at $60 billion for the year 2014-15. India is the UAE’s second-largest trading partner and the UAE is India’s third largest trading partner after China and the US.
Both countries are planning to increase trade between the two to 60 per cent in the next five years.
