The multifaceted influence of the Indian diaspora in Qatar; bilateral and economic dynamics

The Indian community in Qatar includes Indian expatriates in Qatar, as well as people born in Qatar of Indian origin. As of 2017, the Indian population in the country stood at around 691,0001.

By Lt Col Manoj Channan, Veteran

The Indian diaspora in Qatar represents a dynamic and integral component of the socio-economic fabric linking the two nations. With a robust presence over decades, the community has established itself across various sectors, from high-skilled professions to vital blue-collar roles. As we approach the end of 2023, the Indian population in Qatar not only contributes significantly to the local economy but also acts as a cultural bridge, fostering a unique blend of identities and enriching the multicultural landscape of Qatar. This note delves into the diverse aspects of the Indian community’s impact in Qatar, touching upon the implications of India’s shifting energy dependencies, the cultural footprint of the diaspora through institutions like the Indian Cultural Centre, and the financial and economic contributions that underpin the bilateral relations between India and Qatar.

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The Indian community in Qatar includes Indian expatriates in Qatar, as well as people born in Qatar of Indian origin. As of 2017, the Indian population in the country stood at around 691,0001. However, it is estimated that there are 700,000 Indians in Qatar as of 2022. The Indian community is engaged in a broad range of professions, including medicine, engineering, education, finance, banking, business, and media, as well as blue-collar jobs.ALSO READIndia’s Akash Missile System achieves unprecedented success in Astrashakti Military ExerciseMDL bags $40 million order from DenmarkINS Tarmugli: A historic induction into the Indian Navy’s fleet of power and precisionIndia can seek for Brazilian White Gold ‘A Hard Rock Lithium’

There is also a sizable population of second or third-generation Qatari-born Indians. They share characteristics with other third-culture kids, forming a cultural identity that blends their heritage culture and the myriad foreign cultures they encountered growing up in Qatar. Many Qatari-born Indians further migrated to countries such as the United States, Canada, Australia and New Zealand both for greater economic and lifestyle opportunities.ALSO READEnd of an Era: Farewell to the MiG-21 Bison – A Transition in Indian Air Force History

The Indian Cultural Centre (ICC) is the apex body of the Indian expatriate community functioning under the patronage of the Embassy of India for the advancement of social and cultural activities of the Indian community in Qatar. The ICC also serves the interests of almost 600,000 Indians residing in Qatar.

Reduced Dependency on Qatar. India’s reliance on Qatar for liquefied natural gas (LNG) may diminish as the Cabo Delgado gas field in Mozambique, partly owned by Indian energy firms, is gearing up to resume operations. This could reduce Qatar’s leverage over India, which is currently significant due to India’s heavy dependency on Qatari LNG.

Diversification of Energy Sources. The deal with Mozambique could help India diversify its energy sources, reducing the risk associated with dependence on a single country. This is particularly important given the current diplomatic tussle over the sentencing of eight former Indian Navy personnel to death by a Qatari court.

Economic Impact. The shift towards Mozambique could have economic implications for India and Qatar. For India, it could lead to more competitive pricing and better terms of trade. For Qatar, it could mean a loss of a significant market.

Diplomatic Relations. The move could also have diplomatic ramifications. While it might strain India’s relations with Qatar in the short term, in the long run, it could lead to a more balanced relationship as the power dynamics change.

Qatar Airways Tax Evasion Charges

The impact of the tax evasion allegations against Qatar Airways in India on bilateral relations between India and Qatar may become significant, depending on the outcome of the diplomatic initiatives for release of naval veterans.

The Directorate General of GST Intelligence (DGGI) in India has initiated searches in the offices of various foreign carriers, including Qatar Airways, for alleged tax evasion due to the import of services from their head offices. According to the Goods and Services Tax (GST) laws in India, transactions between a foreign company’s head office and its Indian branch are subject to GST, and any supply, even without consideration within the same company, is deemed taxable. The DGGI has detected significant GST evasion from April 2020 to September 2023, involving multiple airlines and has made numerous arrests related to fake input tax credit claims.ALSO READFormer IAF vice chief PK Barbora, who reactivated DBO air strip in Ladakh, dies

Such incidents can lead to diplomatic discussions and negotiations to resolve the issues and may require the companies involved to adjust their operations to comply with local laws. The broader relationship between India and Qatar encompasses various dimensions, including trade, energy, and cultural exchanges. While a single issue like tax evasion can cause friction, it is usually addressed within the multifaceted context of bilateral relations.

The Indian diaspora, significant in many parts of the world, including the Gulf countries like Qatar, plays a vital role in India’s economy through their remittances. Here are some of the critical economic and financial impacts:

Foreign Exchange Reserves. Remittances from the diaspora contribute to India’s foreign exchange reserves. A steady flow of remittances can lead to an increase in the nation’s foreign exchange reserves, which can be used to stabilize the local currency or pay for imports.

Balance of Payments. Remittances are a crucial part of India’s balance of payments, often helping to offset the trade deficit. A strong inflow of remittances can contribute to a surplus in the current account balance.

Household Income. For many families in India, remittances are a significant source of income, often more reliable than local employment opportunities. This money is used for daily consumption, education, healthcare, and housing, thus improving the standard of living.

Investment. Remittances can also lead to increased investments in property, businesses, and savings, which can stimulate economic development. The money sent back home is sometimes invested in starting new businesses or expanding existing ones, contributing to job creation and economic growth.

Banking Sector. The flow of remittances contributes to the banking sector’s stability and growth as it increases the deposit base. Many banks have specialized services for NRIs (Non-Resident Indians), including high-interest NRI accounts, which are a secure source of capital for banks.

Rural Development. A substantial portion of remittances goes to rural areas where banking penetration is often lower. This influx of capital can lead to rural development and potentially reduce urban migration.ALSO READUS Space Force Partners with Indian Start-ups in Ground-breaking CRADAs

Social Security. For many families, remittances serve as a form of social security, especially in the absence of adequate pension systems or unemployment benefits.

Fiscal Impact. Remittances also have a fiscal impact as the money sent home increases consumption, which raises indirect tax collections through increased sales of goods and services.

Exchange Rate Stabilization. In times of economic instability, remittances are stable or even increase, providing a buffer against capital flight and helping stabilize the exchange rate.

Economic Shocks. During global economic downturns or regional instabilities, remittances can act as a counter-cyclical force, providing financial resources when foreign direct investment (FDI) and other capital flows might decrease. Overall, remittances are: –

• Crucial aspect of India’s economy.
• Providing a reliable flow of foreign currency.
• Supporting millions of households.
• Contributing to the country’s financial stability and economic growth.

Conclusion

The Indian diaspora in Qatar is more than a mere expatriate community; it is a powerful economic engine and a cultural amalgam that shapes and is shaped by its Qatari milieu. As India diversifies its energy sources and reduces its dependency on Qatari LNG, new dimensions in their bilateral relationship emerge, potentially reshaping economic and diplomatic ties. The tax controversies involving entities like Qatar Airways foreground the complexities of international commerce and law, necessitating nuanced diplomacy.

Meanwhile, the remittances from the Indian community continue to bolster India’s economy, underscoring the profound interdependence that characterizes the Qatar-India nexus. Looking ahead, it is clear that the Indian community in Qatar will remain a cornerstone of not just the bilateral relationship but also a testament to the enduring spirit of cross-border collaboration and cultural exchange.

(The author is an Indian army Veteran.)