Wednesday, August 14, 2013

Not Just Guest Laborers

As someone who teaches a course on the Indian Ocean, I liked reading this article about the dispersal of Indian business interests around that region today.  Here's a bit about the Middle East:
A stroll round Dubai’s gold souk, a glittering warren of shops and discreet offices, housing bullion worth $3 billion-4 billion, points to another specialism—trading jewellery as well as precious stones and metals. A third of demand is from India, reckons Chandu Siroya, one of the market’s big participants. Indians go to Dubai to avoid taxes at home and because they trust its certification and inspection regime.
Dubai’s ports, air links and immigration rules also make it a better logistical base than India. Dawood Ibrahim, a Mumbai mafia don, ruled from Dubai by “remote control” before eloping to Pakistan in 1994. Since those wild days legitimate Indian firms have thrived in Dubai. Dabur, which makes herbal soaps, oils and creams, runs its international arm from there. Dodsal, which spans oil exploration in Africa to Pizza Huts in Hyderabad, is based in the emirate. Its boss, Rajen Kilachand, moved from Mumbai in 2003. “Dubai is a good place to headquarter yourself,” he says, adding that a “Who’s Who” of Indian tycoons has a presence. Dubai is gaining traction in finance, too. Rikin Patel, the chief executive of Que Capital, an investment bank, says Indian firms are raising debt in Dubai to avoid sky-high interest rates at home...
The Gulf has seen tentative signs of Indian manufacturers shifting base. Rohit Walia, of Alpen Capital, an investment bank, says that in the past year he has helped finance an $800m fertiliser plant and a $250m sugar plant. Both will be built in the United Arab Emirates, by Indian firms that will then re-export much of the output back home. The Gulf’s cheap power and easy planning regime make this more feasible than setting up a plant in India. “It’s a new trend,” says Mr Walia.
A diaspora of Indian business people, and not just migrant laborers, is not a new phenomenon.  As my friend Scott Levi explored in his book The Indian Diaspora in Central Asia and Its Trade, Indian firms played a major role in the economy of Central Asia during the 17th and 18th centuries, including providing financial services which extended the Mughal Empire's cash economy across the region.  The same was true of Iran and the Arabian coast of the Persian Gulf, where "Hindoo moneylenders" frequently appear in the primary sources.

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