JEDDAH, 9 March 2004 — India’s bilateral trade with Saudi Arabia has recorded a substantial increase in the non-oil sector.
Cooperation in the field of manpower has assumed an important dimension in the bilateral relationship, says Indian Consul General Syed Akbaruddin. More than 1.32 million Indians are presently working in the Kingdom with 85 percent of them in the blue-collar category. Invisibles such as repatriation of salaries by Indians and revenues from tourism and airline operations have also been increasing substantially. Remittances by Indians in the Gulf exceed $5 billion annually.
India’s trade with Saudi Arabia rose by 13.72 percent to $5.1 billion in 2002-03. The trade balance remains largely in favor of the Kingdom with its oil exports. India also imports organic and inorganic chemicals, artificial resin, plastic materials, sulfur, iron pyrites, pulp and waste paper, ores and metal scrap, coal, coke and briquettes.
India’s exports to the Kingdom include rice, tea, manmade yarn, fabrics, cotton yarn, primary and semifinished iron and steel, chemicals, plastic and linoleum products, machinery and instruments.
The Kingdom is India’s largest oil supplier. Public sector oil firms in India buy some 10 million tons of oil annually which is approximately 16 percent of the total annual oil imports. In addition, private Indian companies also have contracts with Saudi Aramco accounting for another 7 million to 9 million tons of oil every year. The Kingdom supplies about 23 percent of India’s annual oil requirements. Twenty-two joint ventures with India have been established in the Kingdom. They manufacture products ranging from petroleum, heavy engineering and electrical products to software and professional services, car accessories, rubber and rubber products, and hotels and restaurants.
Many Indian companies have taken advantage of the new Saudi laws which allow 100 percent foreign-owned projects in the Kingdom. Saudi Arabian General Investment Authority (SAGIA) has awarded licenses to Indian companies to establish 62 joint ventures or 100 percent Indian-owned companies in the Kingdom in different sectors such as management and consultancy services, construction projects, telecommunications, IT and pharmaceuticals. These companies are expected to bring investments totaling $360 million into the Kingdom. In India, there are about 47 joint ventures in India in designing, consultancy, financial services software development and others.
The recent GCC-India industrial conference held in Bombay, at which the Kingdom was a major presence, is expected to give a big boost to the Saudi-India trade.
Today the Kingdom is the 13th largest market for Indian exports with the Kingdom also the source of 5.5 percent of India’s total imports. For the Kingdom, India is the fourth largest market for its exports. In terms of Saudi imports, India ranks 10th.