NEW DELHI, 27 March 2007 — Visiting Prime Minister and Vice President of United Arab Emirates (UAE) Sheikh Mohammed bin Rashid Al-Maktoum yesterday boosted the existing relations between the two countries with a series of agreements reached and the signing of real estate deals worth $30 billion.
Underlining UAE’s keenness to become the largest partner of India in the region,
Sheikh Al-Maktoum, who is also the ruler of Dubai, emphasized the need for joint ventures in several key areas. Addressing a business meeting, he urged entrepreneurs to treat UAE as a gateway for Indian exports in the region and take advantage of available opportunities in the Emirates, as well, saying that the move is a “win-win” situation for both countries.
The $30 billion worth of projects signed between companies of both countries includes a $20-billion deal between India’s largest estate developer DLF and UAE’s Al-Nakheel on building two townships in India in the next three years with an initial investment of $5 billion in each. On this, a DLF executive said: “We have signed a 50:50 venture with Al-Nakheel to develop integrated townships with an investment of $20 billion.”
The townships would be full-sized cities near the capital New Delhi and in western Maharashtra state, another company official said. The executive, speaking on the sidelines of meetings with Indian business leaders by Sheikh Al-Maktoum, said the townships would cover 40,000 acres (16,200 hectares) of land, of which 70 percent has already been bought. Construction will begin by the end of 2007, the official said.
In January, DLF said it had filed a new and downsized initial share sale offer with the India stock market regulator almost six months after investors balked at its plan to raise $3 billion for its ambitious expansion program.
DLF said instead it would raise 100 billion rupees ($2.2 billion) via an initial public offer sometime in 2007, down from the 130 billion rupees of shares it originally proposed to sell in August 2006. The August share sale plan was withdrawn after major investment banks said the company’s plans were unrealistic. New Delhi-based DLF will sell 10.1 percent of the firm, or 175 million shares, to fund the construction of hotels and free-trade zones.
In other agreements sealed yesterday, India’s Hinduja Group, majority-owned by the London-based Hinduja brothers, said it signed a 12-billion-rupee ($275 million) deal with Nakheel to develop resort and commercial property in Dubai.
The Hindujas will also set up a manufacturing unit for its commercial vehicle manufacturing firm, Ashok Leyland in Dubai.
The Hindujas also signed a joint venture with real estate group Limitless — an arm of Dubai World, also the holding company for Nakheel — to develop real estate for medical facilities with an initial investment of $1 billion. The project involves setting up of “medi-cities” in Delhi, Mumbai, Bangalore and Hyderabad with about 2,000 beds. “Half a dozen lands have already been acquired for this project,” group chairman Ashok P. Hinduja told AFP. The agreements were part of a string of business deals signed by companies from the two countries during the UAE leader’s visit at the head of a large business delegation.
India’s third-largest software exporter Wipro signed a preliminary agreement with the UAE delegation to “work together” to tap opportunities in the Middle East, said chief financial officer Suresh Senapaty. “It’s a statement of intent to address the Middle East market of entities that come under the sultan,” Senapaty said in the southern technology hub of Bangalore. “The details are to be discussed.”
Shaikh Al-Maktoum, who arrived her on Sunday, has also a meeting with Prime Minister Manmohan Singh, followed by inking of five pacts on expanding cooperation in trade and investment. These include three memoranda of understanding (MoUs), a protocol and an agreement covering taxation, industrial and technical cooperation, among others.
Minister for Commerce & Industry Kamal Nath observed that India offered a huge potential for investment in infrastructure sector, where Dubai’s expertise was well known.
During the next five years, investment requirement in India’s infrastructure sector is estimated at $350 billion, Nath said. On India-UAE trade, he said: “Indeed, it is a matter of pride for us that India has emerged as Dubai’s largest export destination ahead of Pakistan, Iran and Kuwait, and trade between India and Dubai was pegged at nearly $11 billion in 2006.” (With input from AFP)