Rising oil prices have been raising revenues for oil exporters. Here’s why those petrodollars might actually work in India's favour.
This is the dark gold that has been in big demand all over the world. And it's getting even more precious as its price races towards USD 100 a barrel. It has drenched West Asian oil producers with petrodollars. Most commodity gurus see the region earning as much as USD 3 trillion in oil revenues over the next decade.
The expectations are well founded. Oil has risen 31% since December and this will raise OPEC’s revenues by 4% to USD 630 billion this year and by 9%, to USD 688 billion, in 2008. These nations would be sitting on a cash surplus of about USD 600 billion.
Shailesh Dash, Sr VP, Global Invst House said, “Quite a bit of that, of course, has gone into infrastructure development in these countries. But a significant portion of that has gone into investments and to both developed markets as well as emerging markets. When we talk about emerging markets obviously China and India have got the lion's share of investments.”
So where will the money go? It could well be to India. Most analysts cite Indian economic growth prospects and the fact that more firms are shariat compliant in India than elsewhere in Asia.
“Increasingly the focus from the gulf countries are not the developed markets but the emerging markets like India and China particularly, and a few other Asian countries," Dash said.
The petrodollars seem headed for Asia, and particularly India. So with oil racing skyward, the Indian capital markets will also have something to look forward to.
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