DOHA: On Tuesday, Qatar announced its readiness to expedite negotiations for a bilateral investment promotion and protection agreement with India, a sign of the strengthening ties between these two nations in an increasingly globalised economic environment.
Sheikh Faisal bin Thani bin Faisal Al Thani, Qatar’s Commerce and Industry Minister, highlighted India’s status as Qatar’s third-largest trading partner and emphasised the necessity for both countries to expand the boundaries of their investment and industrial cooperation. This initiative represents not only a potential economic boon for both nations but also a strategic advancement in their collaborative efforts.
The backdrop to this development is indicative of a dynamic economic landscape. India’s foreign direct investment (FDI) from Qatar has reached $1.5 billion from April 2000 to September 2024. However, it is important to note that bilateral trade has seen a notable decline, falling to $14 billion in 2023-24 from $18.77 billion in 2022-23.
Exploring opportunities
This decline underscores the necessity for renewed efforts to diversify and enhance the scope of trade, moving beyond the predominant focus on energy-related exports. Qatar is a leading supplier of liquefied natural gas (LNG) and liquefied petroleum gas (LPG) to India, but the continued skew in the balance of trade toward Qatar accentuates the urgency to broaden this economic partnership.
Minister Piyush Goyal, addressing the India-Qatar Business Forum, stressed the importance of transitioning from energy-centric trade to include new-age technologies such as artificial intelligence, the Internet of Things (IoT), quantum computing, and semiconductors.
This pivot suggests a holistic view of the future of trade relations, rooted in sustainability, entrepreneurship, and energy. By inviting Qatari businesses to explore opportunities in India’s diverse economy, Goyal indicates a commitment to fostering an environment conducive to bilateral growth that extends beyond traditional sectors.
The signing of two memoranda of understanding (MoUs)—one between the Confederation of Indian Industry (CII) and the Qatari Businessmen Association (QBA), and another between Invest Qatar and Invest India—further consolidates the framework for future collaboration.
As Qatar National Bank prepares to establish an office in Gujarat’s Gift City, it signals an increasing Qatari interest in the Indian market, strengthening financial ties that could potentially fuel further investment prospects.
Moreover, the discussions surrounding a potential free trade agreement (FTA) with the Gulf Cooperation Council (GCC) highlight India’s forward-thinking approach to its trade policy.
As India progresses toward finalising a free trade agreement with Oman and already operates within a similar framework with the UAE, the prospect of a bilateral agreement with Qatar presents an opportunity to strategically navigate the complexities of regional trade relations.
