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    Posted on 29 September 2011
    OPINION  
     Shafeeq Rahman

    The Gulf appetite for Indian meat products

    Shafeeq Rahman on how India could be ceding the Halal market to china out of sloth

    INDIA IS the third largest exporting destination to the countries of the Organisation of Islamic Conference (OIC) after China. It contributes around 5 per cent of the total overseas import of the region. The OIC economies consist of 57 Muslim states, which are not too self-reliant or able to fulfill the domestic demand. This is because of lower production capacity of food products, consumer goods, technology and paucity of other infrastructure. Turkey, Malaysia, Indonesia, Iran and other oil-rich Arab nations are among the largest importing members of the OIC, whose share of world import is estimated at 8.3 per cent. The cumulative worth of commodities import of OIC nations is estimated at $12,47,596 million in the year 2010. As the biggest player in the international trade market, China has the largest share of around 14 per cent of the total global OIC trade, followed by the US and India.

    Comparative figures in The table adjacent shows the comparative figures of OIC imports from BRICS nations (Brazil, Russia, India, China, South Africa) and longterm trade partner, the United States. The figures are from the International trade centre database for the year 2009.

    The table shows that China has the major market share of OIC nations due to its flexible policy by offering halal and Muslim-friendly products. India is on top in terms of total overseas export with a third of India’s export going to OIC countries.Apart from product quality and competitiveness, Muslim populations of OIC countries prefer to consume only products compliant with their religious ethics. In terms of quality and standards, India has the better range of products but the suspicion of their origin, whether halal or haram, is a key obstacle in expanding the Indian export market to OIC countries. China has hosted several conferences to increase its exports to Arab nations and OIC countries though its Muslim population is lower than in India. Recently, the Second China-Arab States Economic and Trade Forum in Ningxia explored China’s exports to Arab countries with the focus on trade of halal food. Muslims in India constitute more than 14 per cent of the population and the meat market is mainly owned by Indian Muslims who adhere to strict Shariah norms. A majority of Indians are vegetarian Hindus who strictly manufacture only products with nonanimal ingredients. Therefore, India’s exports to OIC nations may surge if they are better marketed as complaint with Muslim- friendly requirements in comparison to other countries.

    India has strategic relations with all OIC countries but is not able to expand its share in the OIC market. In comparison to the estimates of 2009-10, India’s export growth to OIC countries is pegged at 48 per cent in 2010-11. The estimates for other nations are: Somalia (892 per cent), Bahrain (266), Kuwait (151), Indonesia (110), Jordan (97), Algeria (86) and Turkey (79). Negative growth is seen for Libya (-38), Yemen (-29), Qatar (-28) and Turkmenistan (-28). Like past years, the UAE is among the top destinations for India’s exports. Indonesia, Saudi Arabia, Malaysia, Bangladesh, Turkey and Iran are among the top OIC countries importing Indian products.

    OIC imports from BRICS and the US (million $)
    Country
    Import by OIC countries
    Country’s total export
    OIC share in export (%)
    Share in import of OIC (%)
    China
    1,39,466
    12,01,647
    11.61
    12.21
    America
    87,497
    10,56,712
    8.28
    7.66
    India
    52,137
    1,76,765
    29.5
    4.56
    Russia
    46,047
    3,01,796
    15.26
    4.03
    Brazil
    17,663
    1,52,995
    11.55
    1.55
    South Africa
    7,226
    53,864
    13.41
    0.63

    INDIA HAS bilateral trade agreements with most OIC countries. India is also negotiating a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) after a study on feasibility of the India- GCC FTA indicated it would be in India’s interest to do so. The study showed there is a large market in GCC countries for both industrial and agricultural products from India. The non-diversified industrial base in the GCC offers trade complementarities between India and the GCC, which could result in increased trade. India could meet its long-term energy requirements through secured economic relationships with GCC nations and the GCC could gain in food security by close association with India.

    Besides jewellery and minerals, India’s main export items to the OIC are cereals, meat, processed foods and medicine. India is the largest exporter of buffalo meat to West Asia, and other OIC countries like Malaysia, Indonesia and Iran, because of its halal products. The food market is OIC nations is estimated around $1.6 billion and is a potential target for export of India’s halalcertified products.

    Shafeeq Rahman is a professional researcher on India-centric socioeconomic and political databases.
    rahman.shafeeq@gmail.com


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    Posted on 29 September 2011
 
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