Bilateral Trade between Qatar and India has Potential to Grow
Doha Bank CEO Dr. R. Seetharaman spoke at Almus Rupee Money Conference 2020 hosted by National Stock Exchange of India limited and Almus Risk Consulting. The conference was held for two days i.e. 15th and 16th December 2020. There were other speakers from Indian banks, Ex-RBI Executive Director and Ex-Deputy Governor, Foreign & Domestic bank economists, Corporate and Bank Treasury heads. The main agenda was to discuss on “Roadmap to an efficient Forex and Bond markets”.
Dr. R. Seetharaman gave insight on Global economies. He said “According to IMF October 2020, Global growth is projected at 5.2 percent in 2021. The Advanced economies growth is projected to strengthen to 3.9 percent and emerging and developing economies are expected to recover by 6 percent in 2021. The US economy is projected to contract by 4.3 percent in 2020, before growing at 3.1 percent in 2021. A deeper contraction of 8.3 percent is projected for the euro area in 2020, reflecting a sharper downturn than in the United States in the first half of the year. Inflation in the advanced economy group is projected at 0.8 percent in 2020, rising to 1.6 percent in 2021 as the recovery gains hold. In the emerging market and developing economy group, inflation is projected at 5 percent this year, declining to 4.7 percent next year.
Prospects for China are much stronger than for most other countries in this group. Oil extended gains toward $50 a barrel after OPEC+ reached a compromise deal to gradually taper production cuts this month. 2020 has been a historic year for gold and silver as unprecedented stimulus measures around the world were unleashed on financial markets. The dollar index is at 90.46 levels and is expected to fall further as fed continues its monetary easing. Crucial negotiations to secure a post-Brexit trade deal between the UK and the EU expected to happen. Global markets have surged in recent times after fall in April 2020 due to hopes of vaccine, cheering Joe Biden’s winning in US election.”
Dr. R. Seetharaman spoke on Indian economy, he said IMF expects India’s GDP growth to bounce back to 8.8% in 2021, one of the highest amongst in Emerging market and developing economies. The country has been stable with its credit ratings which is placed currently at investment grade at BBB-. India reported current account surplus of USD19.8BN which is 3.9% of GDP in June 2020. The RBI holds Forex reserves of USD568.5BN which is at new life-time highs as on November 6th 2020. The Indian banks also reported better results showcasing 1) Reduction in Slippages 2) Better recoveries 3) Strong growth in CASA mobilization lowering cost of funds and 4) Lower provisions. The FDI investments as per RBI reported is projected to be at USD42.6BN by the end of Fiscal year 2020-21. RBI has been supportive with frequent announcements of its purchases via open market operations, this has led to 10 year bond yields at 5.93%.
Dr. R. Seetharaman gave insight on Regional economies. He said “Qatar economy expected to contract by 4.5% in 2020 and recover by 2.5% in 2021. Qatar and other regional economies had witnessed economic reforms to recover from the COVID-19 as oil fell this year. Qatar central came with various procedures to combat the risk of coronavirus COVID-19 pandemic. This includes the emergency procedures, Loans and liabilities of sectors affected due to procedures taken to combat the spread of COVID-19, Guarantees for local banks and National Guarantee Program to support the private sector. In May 2020, the Public – private partnership law was introduced. The Private sector is expected to leverage from this new law. In October 2020, Qatar has allowed foreigners to own property. Qatar stock market has surged by close to 0.5 % YTD (As on closing of 15th December 2020) and has crossed 10k levels.”
Dr. R. Seetharaman spoke on Qatar-India bilateral trade, he said total bilateral trade between GCC and India stands at USD121BN. Qatar’s major exports to India include Petrochemicals, LNG, fertilizers, Sulphur and Iron Pyrites. Qatar’s major imports from India include accessories, manmade yarn, fabrics, made-ups, cotton yarn, transport equipment, machinery and instruments, manufacture of metals, ores and minerals etc. Many Indian Companies such as L&T, Tata Projects, Voltas, and Punj Lloyd have active relationships in the Qatari market through partnerships, agencies and even have set up their offices in the Qatar. Indian population in Qatar nearly 750K. On the Banking side Doha Bank has a three full-fledged banking branches in India. QNB also received approval for retail operations. In January 2019, QIA invested US$ 200 million through a primary equity issuance in Bharti Airtel’s arm Airtel Africa Ltd. In July 2019, BYJU’S (Indian learning app) announced that it has received an investment of US$150 million led by Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar. Qatar Investment Authority (QIA) is investing about US$450 million for a 25.1% stake in a unit of Adani Transmission Ltd. The deal includes a subordinated debt investment by QIA. QIA eyes stake up to USD1.5Bn stake in India’s Reliance Jio Fibre in 2020. As per World Bank report in April 2020, it expects the remittances to India from GCC to fall by 23% to USD64BN in 2020 from USD83BN in 2019. Qatar – India has set up a task force to identify projects in India for investments, this was agreed between HE Saad Sherida Al-Kaabi and Oil Minister Dharmendra Pradhan. Dr. R. Seetharaman said that the Tatweer program offers infra, office space, introduce business and helps in creating entire value chain to support SME’s in Qatar. Qatar Development Bank can help in providing equity whereas debt can be funded by other banks. India’s bilateral trade is set to grow with Qatar, this is given Qatar’s World class seaport, airport, Free zones, a new Public-Private Partnership Model and an approved Foreign Investment Law to promote non-Qatari investments.” Qatar is an AA- rated country and Doha Bank is rated A3 with stable outlook, the country offers low cost of financing and also has a sovereign fund plus gold reserves with central bank which is 2x of GDP reflecting inherent strength of the economy.