India-Qatar Investment and Trade Relations

India and Qatar have built a robust investment relationship. On June 6, the two countries held the inaugural meeting of the Joint Task Force on Investment (JTFI) in New Delhi. The meeting aimed to strengthen bilateral relations and explore avenues for accelerated growth and collaboration across sectors such as infrastructure, energy, technology, and innovation.

Earlier this year, both nations agreed to establish the investment joint task force with the objective of attracting investments from the Qatar Investment Authority (QIA) into India and exploring potential Qatari investments across India’s entire energy value chain.

Before India’s general elections in May, Prime Minister Narendra Modi and Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani discussed ways to increase bilateral cooperation in areas such as commerce, investment, energy, finance, and technology.

Surge in trade activities between India and Qatar

In 2022-23, India and Qatar‘s bilateral trade amounted to US$18.77 billion. During this period, India’s exports to Qatar totaled US$1.96 billion, while its imports from Qatar totaled US$16.8 billion.

Qatar’s main exports to India are LNG, LPG, chemicals and petrochemicals, plastics, and aluminum articles. India’s main exports to Qatar are cereals, copper articles, iron and steel articles, vegetables, fruits, spices, and processed food products, electrical and other machinery, plastic products, construction material, textiles & garments, chemicals, precious stones, and rubber.

India is one of Qatar’s top three export destinations (the other two being China and Japan). It is also one of Qatar’s top three import sources.

Since 2019, QIA has made significant investments in India across various sectors. In January 2019, QIA invested US$200 million in Airtel Africa Ltd, a subsidiary of Bharti Airtel. In February 2020, QIA invested approximately US$450 million for a 25.1 percent stake in a unit of Adani Transmission Ltd, which included a subordinated debt investment.

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In April 2021, QIA and other investors, including GIC of Singapore, Falcon Edge, Amansa Capital, Think Investments, Carmignac, and Goldman Sachs, invested US$800 million in Swiggy. In October 2021, QIA and other investors, including Coatue Management and Evolvence India, invested US$175 million in Rebel Foods Pvt. Ltd.

In February 2022, QIA announced financial support of US$ 1.5 billion to Bodhi Tree, an investment platform in India. Most recently, in August 2023, QIA planned to invest approximately US$1 billion in Reliance Retail Ventures Limited (RRVL) and acquired about a 2.5 percent stake in Adani Green Energy for around US$480 million. In September 2023, QIA, in collaboration with Grosvenor Property, invested US$ 393 million in IndoSpace Logistics Parks IV (ILP IV).

According to the Sovereign Wealth Fund Institute, QIA is the world’s 10th largest sovereign wealth fund (SWF). Set up in 2005, QIA manages Qatar’s revenues from liquified natural gas. The fund is reportedly an active investor in other Asian markets like China and Singapore.

Bilateral agreements

Trade, industry, and energy

Since 2015, India and Qatar have signed various agreements or memoranda of understanding (MoU) for cooperation in information and communication technology, investment in the National Investment and Infrastructure Fund of India, cooperation in skill development and recognition of qualifications, to name a few. India and Qatar have a strong economic relationship, as the Gulf country provides India with the majority of its LNG imports. Earlier in 2024, India’s Petronet LNG signed a 20-year contract to purchase 7.5 million tons of LNG annually from Qatar. This comes from an extension of a sale and purchase agreement (SPA) for LNG that was signed in July 1999 and covers supplies through July 2028.

India is keen on expanding bilateral trade ties with its counterparts in the Middle East. In 2023, India and the Gulf Cooperation Council (GCC) resumed talks for a free trade agreement (FTA), which is expected to bring new business opportunities for both sides. The GCC members are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Discussions for a India-GCC FTA remain ongoing in the background. Among the GCC member countries, India has signed a bilateral FTA with the UAE and seen a significant increase in two-way trade since 2022.

Double taxation

On April 7, 1999, the State of Qatar and India signed a Double Taxation Avoidance Agreement (DTAA), for the prevention of double taxation and fiscal evasion concerning income taxes. The agreement officially came into effect on January 15, 2000, and it holds significant implications for individuals and businesses operating in both countries.

Taxes covered:

• In India – income-tax, including any surcharge thereon; and
• In Qatar – income-tax.

The DTAA establishes specific withholding tax rates, ensuring that interest, royalties, and fees for technical services are subject to a 10 percent withholding tax. For dividends, a 5 percent withholding tax applies if the recipient company holds at least 10 percent of the shares of the company paying the dividend. If this threshold is not met, the withholding tax on dividends is set at 10 percent. Notably, the DTAA offers an exemption for dividends earned by government institutions.

Qatar-India joint working group on investment

The inaugural meeting of the joint working group on investment between Qatar and India was co-chaired by H.E. Mohammed bin Hassan Al Maliki, Undersecretary of Qatar’s Ministry of Commerce and Industry, and H.E. Ajay Seth, Undersecretary of India’s Department of Economic Affairs, Ministry of Finance.

H.E. Al Maliki highlighted that the trade volume between Qatar and India reached around US$13.46 billion in 2023, making India Qatar’s second-largest trading partner. He emphasized the active role of Qatari corporations and the private sector in the Indian market and underscored the importance of economic diversification as a key pillar of Qatar National Vision 2030.

He pointed out that Qatar’s third national development strategy identifies several promising sectors for partnership and bilateral investment, including industry, logistics services, information technology, digital and financial services, health services, education, and other vital areas. Qatar’s minister expressed confidence that the joint efforts of both countries would lead to greater success, prosperity, and increased mutual investments.

Qatar exploring new investment opportunities in India

The joint working group aims to enhance investment relations by developing a strategic roadmap to boost economic and investment interaction. This includes building a long-term investment partnership, mobilizing financial resources towards priority sectors, enhancing cooperation between startup ecosystems, supporting innovators, and guiding companies to leverage opportunities such as “Made in India” and “Made in Qatar.” Additionally, the group seeks to explore new investment sectors and facilitate investment procedures to enhance investor confidence.

In February 2024, Sheikh Mansoor Bin Khalifa Al Thani, a member of the Qatari royal family and the chairman of a financial services firm, announced that he intended to investigate investing opportunities in India’s education, start-up, and agriculture sectors.

Conclusion

The establishment of a joint task force on investment between India and Qatar has the potential to significantly boost India’s expanding sectors, including agriculture, startups, education, and renewable energy. The leaders of both countries have discussed key areas for investments and are exploring the potential for strategic partnerships. Additionally, the US$6.45 billion increase in bilateral trade volume between 2018-19 and 2022-23 may encourage other Middle Eastern countries to deepen their investment and trade engagement with India.

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