New Delhi, Feb 25 (Inditop.com) Bilateral trade and investment between India and Saudi Arabia are set to see a quantum jump with the visit of Prime Minister Manmohan Singh from Feb 27 to March 1, says Saudi Arabian Ambassador to India Faisal Hassan Trad. A new joint investment fund, expected to be established during the prime minister’s visit, is estimated to be worth $750 million.
“There is huge potential for increasing trade (between the two countries), especially since we have signed agreements like avoiding double taxation and encouraging and protecting investment,” Trad told Inditop ahead of the prime minister’s visit.
“Now we are going to establish a joint fund for investment by both the private and government sectors,” he said.
Mentioning that a big business delegation will accompany the prime minister, Trad said that a huge delegation from both private and government sectors in Saudi Arabia had visited India earlier this month to attend the second Arab-India Partnership Conference here.
“Both sides (during the Saudi delegation’s visit) discussed the potential of investing in both India and Saudi Arabia,” he said.
“The Indian side, in fact, brought up investment opportunities of up to $20 billion in the fields of infrastructure, energy and communication. And I think the Saudi side is very willing to go into details in the near future,” he added.
The ambassador said bilateral trade between the two countries has increased tremendously since 2000.
“The figures for total trade in 2000 was around $1-1.5 billion. Now, we are talking about $28 billion. Indian exports to Saudi Arabia have increased around 400 percent from less than $1 billion in 2000 to $4.5 billion in 2008,” Trad, who took charge as the 13th Saudi ambassador to India last year, said.
India’s exports to Saudi Arabia include rice, tea, manmade yarn, fabrics, cotton yarn, primary and semi-finished iron and steel, chemicals, plastic and linoleum products, machinery and instruments.
Among the major Indian companies operating in Saudi Arabia are Wipro, Tata Consultancy Services, Mahindra Satyam, 3i Infotech, Life Insurance Corporation, Engineers India Limited and Air India.
“Again,” the ambassador said, “the Saudi exports to India have increased sharply, thanks to crude oil, from 2006. India is on number five in our top 10 list of trading partners.”
He added that Saudi Arabia too has assumed a front position on the list of India’s trading partners.
India’s major imports from Saudi Arabia are petroleum and petroleum products. In fact, Saudi Arabia is the largest supplier of crude to India – supplying 30 percent of the country’s needs – which is why the nation holds immense importance for India in terms of energy security.
“In fact, both ministries – the Ministry of Petroleum and Mineral Resources in Saudi Arabia and the Ministry of Petroleum and Gas in India – have formed a joint task force,” Trad stated.
“And this joint task force, to my understanding, is going to meet again in April this year to make sure they fill in the Delhi Declaration,” he said.
The Delhi Declaration, signed during the visit of Saudi Arabia’s King Abdullah Bin Abdul Aziz to India in 2006, talks specifically, among other things, at taking the buyer-seller relationship between the two countries, when it came to petroleum products, to a partnership level.
“This includes investing in the downstream sector in India or in Saudi Arabia from both sides,” the ambassador said.
Asked how fast he saw trade and investment between the two sides expanding, Trad said: “Most of these things are being taken and calculated on a commercial basis because it involves the private sector and not just the government. So, sometimes the private sector takes some time in making their studies.”
He, however, added that the ground was paved for the private sector.
“We have made the necessary agreements of avoiding double taxation, promoting and protecting investment and, now, establishment of the joint investment fund. So, things are ready to happen on actual basis very soon,” the ambassador said.
Manmohan Singh’s visit to Riyadh will be the first by an Indian prime minister since Indira Gandhi visited the country in 1982.
