New Delhi, July 5 (IANS): Indian companies with interest in the Gulf have witnessed their business in the region decline by 20 percent, an industry lobby said here Sunday.
According to Federation of Indian Chambers of Commerce and Industry (FICCI), strict visa rules in many countries in the Middle East are obstructing easy flow of manpower for project execution.
Also, direct and indirect subsidies to domestic companies there have made it more difficult for Indian businesses to offset their losses, FICCI said in a statement.
"It’s indeed noteworthy how Indian businesses have witnessed such a steep decline in their businesses in the Arab region. But I am confident about the inherent resilience of Indian businesses to bounce back,” said FICCI secretary general Amit Mitra.
According to 80 percent of the companies covered by a FICCI survey, below to nominal understanding of regulatory framework in several Gulf economies was also affecting the growth of Indian companies in the region.
This was despite the fact that these companies rated the region very high on the scale of potential and unexplored markets.
Similarly, Arab businesses and potential investors did not have first hand information about India and its business climate.
"This has indeed affected the faster growth in trade relations between India and the economies in the Arab region," the chamber said.
Moreover, it said, several Gulf states still lacked transparency in trade promotion policies.
Bureaucratic hurdles and red tape were two other areas of concern for Indian businesses.
The United Arab Emirates (UAE), despite being hard hit by the slowdown, followed by Oman, is the most-preferred investment destination for Indian businesses, FICCI said.
In terms of transparency in rules and regulations for setting up businesses, the UAE again remained the best for 90 percent of the respondents, the survey found.