At a time when New Delhi is busy in promoting the Make in India programme, Bahrain Economic Development Board managing director Simon Galpin came to the country to woo investors to invest in their country’s manufacturing activities, besides a whole lot of other activities, including infrastructure and start-ups. Galpin tells Indivjal Dhasmana there are complementarities in the Modi government’s flagship programme to boost manufacturing and investing in factory production in Bahrain. Edited excerpts :
Why should Indian companies invest in Bahrain?
The main reason is Bahrain’s geographical location. It’s a great hub for accessing markets across GCC (Gulf Cooperation Council) and across West Asia. Our tax regime makes it a very efficient place to put those activities because we have zero income tax, zero capital gains tax and corporation tax. We have this arrangement where goods can be sold into other GCC members at zero tariffs and we have a free trade agreement with the United States. If an Indian company adds 35 per cent of value to products in Bahrain, it could access all those markets.
Has any Indian company evinced interest to invest in Bahrain and in which sectors?
Yes, there are a number of Indian companies in joint ventures in the manufacturing sector. There are many opportunities, but a few are clear ones. One is downstream aluminium manufacturing. Bahrain has one of the largest aluminium smelters in the world. Even then, we are about to expand it. So, there is this opportunity to use aluminum raw materials to produce a wide array of products, particularly in automotives. The other area is food processing. We have Mondelez, one of the world’s largest food manufacturers, in Bahrain. So, there are opportunities for suppliers, sub-contractors, packaging companies and raw material processing companies on the food side to come to Bahrain.
How does this whole gamut of changes in Bahrain help our Make in India programme?
Make in India programme is about expanding India’s manufacturing capabilities. Of course, for many of the products that could be produced in Bahrain, the starting point of semi-finished products could be in India. We are giving Indian manufacturers access to even bigger markets.
India is buzzing with start-up activity. Do you have opportunity for them in Bahrain as well?
We believe there is tremendous potential to grow Bahrain as a start-up hub. India has tremendous recognition now as one of the major centres for start-up activities in the world. What we are looking to do is to encourage scale-ups. Start-ups that have already cracked the Indian markets need to go global now and consider having a base in Bahrain to expand to rest of GCC and also other markets. What we want to do is to persuade high networth individuals in Bahrain to become angel investors and support and invest in start-up founders.
But, India-Bahrain trade is minuscule. Why is it so?
Well, Bahrain in itself is a relatively small market. But, it’s a great test market because it’s so accessible, it’s so open, it’s a great platform to enter much larger markets.
How does the country take on depressed oil prices over the past few years?
In Bahrain, we are going through restructuring of our economy. Bahrain has a well-developed plan to diversify our economy away from oil and gas into other areas such as manufacturing and financial services.
We also have a very ambitious plan of infrastructure projects amounting to more than $32 billion or in other words annual gross domestic product of the country. These infrastructure projects present tremendous opportunities for Indian sub-contractors and suppliers.
How has slump in oil prices affected Bahrain?
It was an opportunity for us because it means that we can push forward reforms and changes that will make the Bahrain’s economy even more competitive. Bahrain already has the most diversified economy in GCC. That is being accelerated further due to oil prices. There are three big opportunities that Indian companies look at– one as I already told you is infrastructure push, from expansion of airports to modernisation of oil refineries, expansion of aluminum smelter, tourism and development projects. Secondly, we live up to our reputation as business-friendly country. So, we are putting in place a number of changes that will make business environment even more attractive and that is soft infrastructure. Third thing is like putting in place a revised bankruptcy law, new trust laws, limited liability partnership laws. Besides, we are expanding the list of industrial sectors that are open to 100 per cent Indian ownership. So, you don’t need to have JV partners for most businesses.