ARAB COMPANIES IN INDIA
SUCCESS STORIES
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Executive Summary 04
Abu Dhabi Commercial Bank 06
Damas Jewellery LLC 07
Emaar MGF Land Private Limited 09
ETA General Private Limited 11
Indo-Jordan Chemicals Company Limited 12
Kuwait Airways 14
Kuwait Projects Company 15
Mfar Constructions Private Limited 17
Royal Jordanian 19
Talal Abu-Ghazaleh Organization 21
West Asia Maritime Limited 23
C O N T E N T S
A report by IMaCS for IBEF
India.The gulf region has emerged as one of the natural choices due to its proximity and close cultural ties with India
The gulf countries are strengthening their relationships with the Asian countries.The Asian region has emerged as one of the fastest growing regions in the world with leading economies like China, India and the ASEAN region achieving double digit or high single digit growth rates.The high demand for oil and the search for alternative energy sources have made the Arab companies to invest in new market and new sectors.
Opportunities in Indo-Arab business relations
With an estimated demand of at least US$ 150 billion to develop infrastructure, India is looking for large investments from the Gulf.The FDI from the region is growing slowly but much lower as compared to the potential investments.The total FDI from the Gulf Cooperation Council (GCC) countries has been around US$ 2 bn in 2006.
India has developed expertise in a number of areas including emerging areas such as IT,Telecom, Biotechnology and Pharmaceuticals. India offers sustained manpower resources and R&D capabilities in a number of areas.
To further accelerate bilateral trade and investment, India is planning to sign bilateral investment protection agreement with more Arab countries and discussions are already going on for negotiating a free trade area (FTA) between the Executive Summary
India and its people have always enjoyed good relations with the Arab world covering areas including economic, technical and business cooperation. Indian ties with the region date back many centuries when trade and travel flourished between the Indian kingdoms and the Arab world.
The geographical and cultural proximities have also played an important role in the ties that have existed in the distant past.
The depth of the economic relationship is reflected by the presence of 3.5 million Indians in the Arab world (mainly Saudi Arabia, UAE, Qatar and Kuwait) and their annual remittances to the country comes up to a staggering US$24 billion a year.This has had an impact on the Indian consumer demand for goods and services.
Arab countries have emerged as the largest supplier of energy to India. Over 60% of India's oil need is meet by the region. India has been increasingly making strides into the Arab world, with exports to the Arab world and Northwest Africa having grown substantially over 2005 from US$14 billion to US$17 billion in 2006and imports (excluding oil) had going up from US$9 billion to US$13.9 billion during the same period.
Need to look beyond energy
Both the countries have realised to look beyond oil and energy in their trade relationships. Post liberalisation, many Indian companies have acquired global ambitions and are looking at markets outside 4
EXECUTIVE SUMMARY
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advisory services and technical and design services to a number of clients in the Middle East by taking advantage of the availability of quality manpower in India.
Damas Jewellery LLC- Damas Jewellery LLC is one of the largest Jewellery retailers. India, being one of the largest consuming countries for gold, provides a large opportunity for Damas. Damas intends to establish a chain of showrooms across the key cities of India.
Royal Jordanian Airlines- Royal Jordanian
Airlines is the national carrier of Jordan and started operations in India in 1989. It plans to expand to other key cities such as Bangalore, Hyderabad and Chennai in the near future apart from the present Delhi and Mumbai.
Kuwait Airways- Kuwait Airways is the national carrier for the state of Kuwait and started operating to India in 1959. It operates flights to a number of Indian cities.
Indo Jordan Chemicals- A joint venture between Jordan Phosphate Mines Company and SPIC, one of the large Indian conglomerates.The Arab Investment Company SAA (TAIC - Saudi Arabia) is the other stakeholder in the company.
The company is capitalising on the cheap source of raw material availability in Jordan and the market for phosphorus based chemicals in India.
Abu Dhabi Commercial Bank- Abu Dhabi Commercial Bank (ADCB) is one of the largest national banks in UAE. India plays a key role in the banks strategy, as India is the only country that the bank has operations in apart from UAE.
The bank presently has branches in Mumbai and Bangalore and plans to add ten more branches in the near future.
two sides. India and the Gulf Cooperation Council (GCC) have signed a framework agreement on economic cooperation that would give a fillip to existing commercial and economic ties between the two sides.
Arab companies in India
Large Arab companies have moved in quickly to capitalise on the growth opportunities that India offers. Bulk of the Arab investments are in areas such as construction and infrastructure and transportation. Both joint venture (JV) and fully owned subsidiaries are prevalent routes adopted to invest in India.The JV route appears to be adopted when local market knowledge is critical to success of the business - as in the case of real estate. A brief snapshot of some of the Arab companies who have been operating in India are given below:
Emaar MGF Land Private Limited- A 50:50 JV between Emaar Properties PJSC of Dubai and MGF developments Limited. Emaar entered India with the largest FDI in real estate amounting to over half a billion dollars for projects involving a capital outlay of US$4 billion.
Mfar Constructions Private Limited- An associate company of M/s Galfar Engineering and Contracting LLC of Muscat. Mfar has many prestigious constructions in India under its belt spread all over India.
Talal Abu-Ghazaleh Organization (TAGorg)- Talal Abu-Ghazaleh Organization (TAGorg) is an international professional services firms that provides a wide range of consultancy services through its member firms and focusses on providing assistance to Indian firms that plan to tap the Middles East markets
Pulsar Knowledge Centre- Pulsar Knowledge Centre is the subsidiary of Kuwait Projects Company (KIPCO). Pulsar provides business
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DISCLAIMER
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This publication is for information purposes only. While due care has been taken during the compilation of this publication to ensure that the information is accurate to the best of IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.
IBEF neither recommends nor endorses any specified products or services that may have been mentioned in this publication and nor does it assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this publication.
IBEF shall, in no way, be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this publication.
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