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Over the years, Bahrain has maintained a steady economic growth prompting several foreign investors to explore its business environment. Bahrains free economy status in the Gulf region and a diversified industrial landscape are factors responsible for its attractiveness as a destination for large-scale investments. In recent times, a growing number of Indian SMEs are entering the Bahraini market to capitalise on the opportunities available for growth.

Indias total trade with Bahrain has increased substantially in the past few years. Notably, total trade between the two countries stood at around $1,081 million in 2007-08. India has been a major exporter of textile, fruits, machinery, iron and steel, paper, rubber and leather products to Bahrain. Alternately, Bahrain has exported oil, chemicals, pharmaceuticals, base metals, iron and plastic products to India.

Bahrains liberal tax structure that exempts all companies, except those in the oil and gas sector, from paying corporate taxes is the biggest draw for most foreign investment companies. In addition, Bahrain offers access to a highly skilled workforce, which makes it more lucrative for trade and Investment Guide .

Sectors of growth

Market analysts believe that Indian SMEs should target growth in sectors such as logistics, IT, automotive engineering, education and tourism in Bahrain. They further opine that Indian telecom SMEs should set up centres in Bahrain to maximise their return on investment (RoI).

Bahrains Information and Communication Technology (ICT) industry is another potential segment for growth. The sector is expected to touch $375 billion by 2010 and is expected to grow at a robust pace in the next 5 years. Indian ICT SMEs can, therefore, grab a considerable market share by addressing the increasing demand for innovative IT products and services in Bahrain.

Indian SMEs in the finance sector should also tap the potential that exists in Bahrains financial markets. Mutual funds, asset management and private banking are some of the most promising segments.

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