India-Arab trade dipping on strict visa rules, subsidies

NEW DELHI: The amount of business generated between India and the Arab world dipped 20 per cent in recent years as strict visa rules and subsidies to local industry make it difficult for people to set up business there, a FICCI survey said.

Strict visa rules in many Arab countries prevent easy flow of skilled workers for setting up business and subsidies to local businessmen by the state give them an unfair advantage, making it difficult for Indian businesses to offset losses, the Chamber said.

"...there has been a sharp decline of 20 per cent in business generated by them in this region," it said.

Lack of first hand information for Arab businesses,transparency in trade promotion policies, bureaucratic hurdles and red tapism, were mentioned as top most problems by respondents who participated in the survey.

About 60 per cent of the 20 companies surveyed opined that nominal understanding of regulatory framework in number of prominent Arab economies prevented them from expanding their businesses.

The report said apart from UAE, Oman, Qatar, Kuwait and Bahrain, Arab countries needed to do a lot more to attract potential Indian investors.

The survey further said besides oil and gas, FMCG, food processing and construction sector were of immediate interest to Indian companies.

Indian companies have also expressed their concerns that the registration process for new entrants in number of Arab markets should also be simplified.

"This step would indeed go a long way in promoting trade and commercial ties between India and the Arab region," FICCI said.

The respondents have urged the Indian Embassies in Arab countries to play more active role for taking care of the business interests of Indian companies.