DNA Money Edit: Gulf crisis opens a window of opportunities for India

The mounting diplomatic crisis in Gulf has clearly isolated Qatar, creating huge amount of confusion in the whole of Middle East. Saudi Arabia, the UAE, Egypt, Bahrain, and others, have closed transport links with Qatar. According to them, Qatar is supporting extremism and undermining regional stability. India has maintained that it is an internal matter of the Gulf Cooperation Council, but raised concerns about Indians in Qatar. India and Qatar share very strong economic ties, with the total bilateral trade reaching $15.67 billion. India’s exports to Doha are tiny at $1.05 billion in 2014-15. Qatar is the largest exporter of LNG and India imports over 90% of its natural gas from Qatar. In addition, Qatar is in the process of building a domestic airline in India.

The crisis in fact provides a window of opportunities for India. Hyper markets in Doha and other neighbouring cities have run dry within a few days of the crisis. There is also a lot of churn in the employment as people from neighbouring countries are leaving Doha, providing job opportunities for Indians. Qatar will surely need fresh labour, at least in the short-term.

Crude oil prices may creep up slowly, but gradually. A research report by UBS suggested that any notable rise in oil prices, say by $10 a barrel, may push India’s import bill higher, which could dent current account deficit (CAD) by $11 billion. As of now, prices have dropped in the global market.

The crisis now provides an opportunity for India to abridge the huge balance of trade with Qatar.