Late Extra: Indian firms target Iraq with NRI tie-ups in Gulf

Save your coins for the moment. The Iraq pie is not yet ready for the table. Speculators who might be dreaming of hitting the jackpot in post-Saddam Iraq need to remind themselves that rebuilding Iraq is not like playing on the one-arm bandit slot machines.

Indian companies and individuals have begun to make preparations to bid for the left over contracts after the Anglo-American coalition and its other minor partners have had their fill.

Be warned that despite remonstrations to the contrary, the coalition is going to be the major financial engine on the premise — after all they took the risk, ignoring world opinion and rid Iraq of Saddam Hussain.

In India, industries have begun identifying the areas where they will not have to take on too many competitors.

Tea is one of the best examples — the competition will be from Sri Lanka and some other minor players. The list of commodities and products which India can export is being scrutinised presently.

So how does all this impact on the NRIs in the Gulf? It has been learnt that some Indian companies are trying to tie up with Gulf-based firms, especially those based in the free zones.

Among the latter, Jebel Ali is the prized destination. The factors which have prompted this are clear and make sense.

In the past, Indian companies have fallen flat on their faces because of not being able to adhere to tight delivery schedules. This time the wiser ones are trying not to take chances. The time element is going to be vital if one is going to help the Iraqis and, in turn, help oneself.

Indian companies which have not yet established a base in Jebel Ali and other UAE free zones, are now looking for NRI partners who are already operational and have warehousing capacity.

One businessman in fact wants to try a new version of the 'sea-air' transportation avenue, which Dubai had pioneered in the 1980s. This man wants to change it to 'air-sea' or 'air-land' method.

Fly in goods to Dubai and from there transport them to Iraq by sea (read Umm Qasr) using a feeder service or overland via Kuwait. Build up a good need-based inventory at Jebel Ali and they feel that they would have overcome one major past deficiency.

I have been approached to assess a number of business proposals. While most measure up, I have warned the businessmen/business houses that they have in the past also failed on another count.

That is, don't try dumping sub-standard goods. In the past there have been complaints that Indian businessmen show and get approval of the samples they propose to deliver but once the supply gets underway the end user discovers that the goods delivered are not those which were promised. Lost contracts and penalties have been the result apart from acquiring a tarnished image not only for themselves but also India and their NRI partners.

The other major shortcoming of Indian products was their packaging. However, over the past decade, the Indian companies have realised that packaging is as important as the quality of the products. On this count I am satisfied that the quality of packaging of Indian products has improved tremendously. They might still not be able to beat the standards of goods packaged in the West or other developed countries in south-east Asia but Indian companies will be able to hold their own in the present scenario.

The ace which the Indian companies do hold is that even before the era of Saddam Hussain they were doing substantial business with Iraq. The icing on the cake for the Indians is that the Iraqi public at large likes India and its people. I know because as an Indian in Iraq I was accorded a very warm welcome and the ordinary Iraqi from the taxi driver to the hotel manager to the shopkeepers went out of their way to make my visit pleasant.

Bearing that in mind, my advice to the Indian businessmen would be — please don't betray this trust established over decades. To the NRIs who are willing to enter into partnerships with Indian firms it would be wise to check out not just the proposals but the reputation of the companies with whom they choose to deal.