Economic
Cost of Hate
India has
seen gradual increase of hate against its Muslim Minority. This gradual
increase of last 6 years has suddenly spiked in last 8 months, which is noticed
by global human rights groups and Governments.
The
countries and international organizations has started discussions and so are
governments. This discussion has now coming to the point it will start damaging
India’s Economy and will have serious implications.
US
Congress has already issued statement and so is USCIRF and Congress Members,
and Bernie Sanders has raised serious questions on India’s handling of Racism,
Hate and Violence against its minorities.
UK
Parliament has already discussed the matter.
EU
Parliament will take up the issue once opened. It has 3 resolutions on the
matter.
OIC – Organization
of Islamic Cooperation is world’s second biggest group of countries has already
issued statements and requested government of India, to protect the life and
properties of Muslims.
GCC – Gulf
Cooperative Council is world’s smallest but richest group with substantial
exposure and relations with India and with very good say across the worlds, is
started serious talking about Islamophobia and Hate in India. This will have
serious economic impact.
US, Europe
and UK, number of Muslim countries has echoed their concern for the Hate Crime
and Islamophobia in India.
Notably
among them are Turkey, Iran, Malaysia, Indonesia has come out with their
statements.
The real
question is How is the cost or economic impact of all this hate mongering.
I will
start with GCC.
1.
GCC hosts 9 million Indian – This
number can vary between 9 million and 12 million depending upon how you view or
calculate.
2.
The total of 79 billion USD, 55
Billion comes from GCC countries or 70%, more importantly India is single
largest recipient of foreign remittances.
Among countries, the top remittance
recipients were India with $79 billion, followed by China ($67 billion), Mexico
($36 billion), the Philippines ($34 billion), and Egypt ($29 billion). World
Bank
3.
More than 80% Indian working in GCC
are low wage earners or labor which are easy to replace.
4.
India’s Export – Fresh Vegetables and
Meat
5.
GCC is single biggest market for Fresh
Vegetables, and Fruits, Agriculture Products.
6.
GCC is single biggest market for Fresh
Meat Exports – Caracas – Goat and Sheep
7.
GCC is single biggest market for Beef
Exports.
8.
GCC is single biggest trading partner
for Agro Commodities.
GCC
countries account for 15 percent of India’s total import and 12 percent of the
country’s total export basket in value terms.
Among
the GCC countries, UAE accounted for the major chunk of India’s exports and
imports with $30.08 billion and $29.77 billion respectively in FY19.
This is despite a negative growth in both imports and exports of gems and jewelry, a major item in the product basket between India and UAE. India’s imports of gems and jewelry from UAE have seen a decline of 13 percent, while its exports of these products to UAE have fallen by 3 percent in FY19 over the previous fiscal.
UAE
accounts for 9 percent of India’s total export basket and 5.80 percent of
India’s import basket by value.
UAE is the major
destination for India’s jewelry exports, accounting for about 80 percent of
India’s exports.
Energy,
Expatriates and Economy
Indian
National make up the Gulf states’ largest expatriate community, with an
estimated 9.6 million Indian nationals living and working in the region;
especially in Saudi Arabia (2.8 million) and the UAE (2.6 million.
The GCC is
India’s largest regional-bloc trading partner, which accounted for $104 billion
of trade in 2017–18, nearly a 7 per cent increase from $97 billion the previous
year. This is higher than both India–ASEAN trade ($81 billion) and
India–EU trade ($102 billion) in 2017-18. Two of India’s top five trading
partners, the UAE and Saudi Arabia, are from the Gulf. The GCC also provided
over $55 billion in foreign-exchange remittances from Indian expatriates in
2017, accounting for over 70 per cent of India’s total.
The total
bilateral trade between the GCC and India was estimated at US$121.34 billion
($203 billion) in 2018-19. The UAE is estimated to be India’s third-largest
partner with trade in 2018-19 estimated at nearly US$60 billion ($100 billion),
while Saudi Arabia is India’s fourth-largest trading partner, with trade in
2018-19 estimated at over US$34billion ($57 billion).
They aim to
increase bilateral trade by 60 per cent over the next five years and have set a
target of $75 billion for UAE investments into India’s infrastructure
development, spanning ports, airports, highways and construction, as well as
petrochemical projects.
India expected
to attract large-scale investment from the GCC to India, following the recent
announcement of the development of a $44 billion oil refinery to be built by
Abu Dhabi National Oil Company (ADNOC), Saudi Aramco and Indian counterparts.
The announcement comes a few months after Emirates Group announced a $4.23
billion (INR300 billion) aircraft maintenance, repair and overhaul (MRO)
project in Andhra Pradesh in February this year.
Aramco
is also in talks with Reliance Industries Limited to purchase a 20 per
cent stake in its oil to chemical business, which is estimated at US$75 billion
($125.5 billion).
The GCC has also invested in
developing India’s energy infrastructure. In 2019, the Saudi Ambassador to
India stated that Riyadh wished to invest US$100 billion ($166 billion) in
India
Foreign
Direct Investment (FDI) in India increased to $61.96 billion in 2017-18,
according to Indian Government’s Department of Industrial Policy and Promotion
(DIPP). Total FDI reached $ 61.96 billion in the last four years, it said.
India: An investment gateway
Yusuffali predicts that an investment to the
tune of $150 billion will flow into retail, aviation, tourism and manufacturing
sectors from Gulf countries.
This will have a mutual benefit for both the
countries as India faces 30 per cent wastage in the Indian farm sector due to
bottlenecks in storage, packaging and transportation, and investment by Saudi
Arabia would benefit both the countries.
Why GCC Matters
And with an average GDP per capita of US $ 61,559
in terms of purchasing parity, most GCC nation rank in worlds top ten richest
countries.
Indonesia and Malaysia account for 85%
of the world's palm oil output while India is the biggest buyer of edible oil.
Indonesian crude palm oil has sold at
a premium to Malaysian oil since India this month placed curbs on imports of
refined palm oil.
The trade ministers of India and Indonesia, which want to more than double
their bilateral trade to $50 billion by 2025, met in Davos on Thursday and
agreed to fast-forward trade between them, one of the informed sources
An Indian government document, reviewed by Reuters, said that Indonesia had
"informally agreed" to double the annual quota for Indian bovine meat
exports to 200,000 tonnes.
Indian-Indonesian trade was worth $21.2 billion in the 2019.
Indonesia imported 94,500 tonnes of
Indian buffalo meat worth $323 million in the 2018/19 fiscal year. It is the
third biggest buyer of Indian buffalo meat after Vietnam and Malaysia.
India’s Tourism Sector
The Foreign Tourist Arrivals in India is small compared to global
standards. The lack of enough and quality infrastructure is one reason, the
culture and social environment is second factor.
The arrivals are divided as Foreign and NRI, we will discuss only
Foreign Arrivals.
The single largest arrival is Bangladesh Nationals. Then come US
and Europe. The Bangladesh alone constitute more than 20% of total arrivals,
USA and Europe together constitute another 25%.
The remaining 55% is scattered over countries. North Africa, GCC and
Malaysia together is above 10%. Other Muslim Countries has another 3% arrivals
in India.
Tourism is one of very important employment sector for India. The
present environment of hate will directly affect sentiments of Tourist and their
arrivals. Not only the Muslims but all arrivals will be affected.
We see more than 50% reduction in Tourist arrivals from Muslim
World to India. The NRI arrival will also be heavily affected because of Job
loss.
The arrivals from USA and Europe will be affected by 15%, as
sentiments go negative. This will affect India’s direct foreign currency income
and employment.
Services Sector – India’s services sector is more dependent on USA
and Europe. IT, ITES are mostly catered to developed world. In last few years,
there is substantial growth and Opportunities are generated from GCC. This
growth is steady and remain double the average growth of India’s services
sector exports. This nascent sector will face challenge to survive in GCC,
North Africa and Malaysia, Indonesia.
The Effect of Hate on FDI and PPP and other projects
As Result of Increase of Hate in India, India will see
substantial losses in terms of financial loss. Remittance will be down by 30%
or 17 Billion Dollar, direct commercial loss or loss of business will be 55
billion and overall Indian economy will be take hit of 1.5 percent.
The sentiment in GCC particularly and worldwide in general will be
negatively impacted. The investors look for safety of their amount and social
conditioning. Peace is most important to drive growth anywhere in the world.
Without peace and harmony, it is impossible to find growth and development.
Hate will not only drag down the growth of particular community but it will
have drag down effect on everyone. These negative sentiments will persist for
the long time. GCC human rights activist and global Human Rights activist
particularly in EU and USA will have substantial impact on FDI in India.
Data Source -
India Tourism Statistics 2019 Ministry of Tourism Government of
India
Annual Report 2018 -2019 Department of Commerce Government of
India
GCC Stat
World Bank Remittances Report
IMF Economic Review
Venture Art Economic Projections
