PM Modi’s visit highlights India's prospects for Middle East construction
Prime Minister Modi’s tour of the Middle East highlights a renewed appreciation of the Indian economy, but can regional construction leaders capitalise on the opportunities?
The recent signing of numerous agreements – with significant Indian involvement – looks set to enhance the quality and volume of building work in the Middle East.
Some of the most notable construction updates of the month coincided with the World Government Summit (WGS) 2018, which was held in Dubai on 11–13 February. Indian Prime Minister, Narendra Modi, who was concluding a three-day tour of the Middle East last week, delivered the WGS 2018 keynote speech.
Modi’s visit to the region resulted in tangible collaborations with key Middle Eastern countries that could boost local construction markets. For instance, six agreements to develop infrastructure projects worth more than $40m were signed between India and Palestine, one of the countries that Modi visited in the region (p7).
In addition, eight agreements covering sectors such as defense, tourism, and military were signed between India and Oman during Modi’s trip. According to Indian media outlet, Economic Times, India is also considering the establishment of defence production facilities in the sultanate.
The prime minister was perhaps busiest in the UAE, however. As well as addressing topics such as technology, climate change, and economic reforms at WGS 2018, while in the Emirates Modi met with the UAE’s Crown Prince, HH Sheikh Mohammad bin Zayed.
The two leaders discussed India’s participation in Expo 2020 Dubai, and the prime minister suggested ways in which Indian companies could participate in the UAE’s ongoing infrastructure projects. They also reviewed the target of $75bn (AED275.5bn) that the UAE is set to invest in India’s infrastructure development.
Modi welcomed Abu Dhabi Investment Fund’s participation in India’s National Infrastructure Investment Fund (NIIF), and praised DP World’s deal with NIIF to create a joint investment platform for transportation and logistics businesses in India.
The subcontinent is undoubtedly a valuable trade partner of the UAE, and other Middle Eastern countries. While the more sceptical business leaders in the region may be somewhat wary of Indian construction giants potentially eating into their existing market shares, this does not have to be the case. For example, commenting on the impact of Chinese production on global steel prices in 2016, Russian mining giant Norilsk Nickel Group’s senior vice president, Andrei Bougrov, said that China’s ambitious production programmes made it “a worthy business partner” and one that all global organisations should look to work – rather than compete – with.
Not unlike China, India has the dichotomous advantage of being an emerging market that is both hungry for new international investors and capable of promoting its existing supporters. Middle Eastern construction leaders eyeing international markets would do well to consider the sub-continent as the starting point for their journey – but they must do so before the competition heats up.