(MENAFN - Khaleej Times) Investors from the UAE are better placed to benefit from the exciting opportunities in India given the strong bilateral economic ties, top tanking officials of Builders' Association of India (BAI) said on Thursday.
BAI, the apex body of the Indian engineering and construction industry, has more than 13,000 members.
Under the current five-year plan, India eyes a total investment of more than 1 trillion by 2017 in infrastructure development. Such massive investment will boost Indian construction sector's contribution to the country's gross domestic product (GDP) in the next few years. Currently, the sector accounts for eight per cent of the GDP, Bhagwan J. Deokar, Chairman, National Convention Committee and past president of BAI, said. Addressing a press conference on the eve of BAI's 26th convention to be held in Dubai, Deokar said India is among the fastest growing economies in the world. Despite a slowdown in growth rate, which is currently at five per cent, on the back of strong economic fundamentals, India is poised to rebound, providing the construction sector a major fillip while offering overseas investors new opportunities to be part of the country's amazing growth story, Deokar said.
More than 1,000 delegates from India are gathering at Atlantis, Palm Jumeirah, to discuss the challenges and opportunities in the Indian construction industry at the three-day event. Indian Ambassador to the UAE, T. P. Seetharam, Mirza Hussain Al Sayegh, Deputy Chairman, Oilfields Supply Center and Engr. Mohamed Al Noori, Director, Environmental Centre for Arab Towns at Dubai Municipality, will address the convention.
Dr. J.R. Gangaramani, President and Executive Chairman of Al Fara'a Group, said India requires quality infrastructure. "This simple fact is the long-term driver of the construction sector as infrastructure investments are the most important growth driver for construction companies," he said.
"While short-term factors will keep the sentiments subdued, over the long term, demand will remain strong. The proposed increase in allocation in the twelfth five-year plan (2012-2017) will translate into a healthy business for construction companies," Gangaramani said.
With non-oil trade between India and the UAE crossing 75 billion and total trade (including hydrocarbon) reaching 85 billion in 2012, economic ties are growing strong. The growth opportunities and lucrative investment environment in India are poised to attract investors and construction majors from the UAE, said Gangaramani.
India's construction industry has contributed an estimated Rs6707.78 billion to the national GDP in 2011-12.
The sector is labour-intensive and, including indirect jobs, provides employment to more than 35 million people. Indian Planning Commission has proposed an investment of around 1 trillion in the 12th five-year plan, which is double of that in the Eleventh five-year plan, said C. G. Deochake, chairman of BAI.
"Indian construction industry is about to enter in a golden era where new investments in infrastructure is going to push the industry's growth to a new level," said Deochake.
The proposed increase in allocation will translate into a healthy business for construction companies.
Mahesh M. Mudda, Chairman of the organising committee of the convention, said India is witnessing a sustained growth in infrastructure build-up. The construction industry has been witness to a strong growth wave powered by large spends on housing, road, ports, water supply, rail transport and airport development, he pointed out.
Demand for quality infrastructure construction is mainly emanating from the housing, transportation and urban development segments. India will become the world's third largest construction market by 2025, adding 11.5 million homes a year to become a 1 trillion a year market, according to a new study by Global construction perspectives and Oxford Economics.
Mudda said over the past few years there has been a substantial increase in the number of contractors and builders, especially in the housing and road construction segment.
According to a technical committee set up by the Ministry of Housing and Poverty Alleviation, the total housing shortage in the country stood at about 18.78 million at the start of the 12th five-year plan. This provides a big investment opportunity, the BAI official pointed out.