Saudi-Indian relations are forging ahead on the parallel bar of trade and investment between the two countries, whose bilateral trade surged from $2.63 billion in 2005 to over $3.44 billion last year, an increase of over 28 percent.
Bilateral investment was also on the upswing. The Saudi Arabian General Investment Authority (SAGIA) issued during the last two years 190 licenses to Indian companies for joint ventures or 100 percent-owned entities in the Kingdom in different sectors, such as telecommunications, IT, construction projects, electronics and home appliances, engineering goods, jewelry etc. These joint ventures were expected to net a total investment of around SR. 4.113 billion ($ 1.097.06 billion) in the Kingdom.
Saudi investment in India also gained momentum on the strength of business opportunities emerging in its vibrant economy. Saudi Arabia, as the 22nd biggest investor in India, had investments worth $228.83 million up to September 2004.
There are more than 55 Indo-Saudi joint ventures or Saudi-owned companies in India covering a broad spectrum of industry such as paper manufacture, chemicals, computer software, granite processing, industrial products and machinery, cement, metallurgical industries, etc.
In terms of bilateral trade, India ranked as the fourth largest trading partner of Saudi Arabia: The value of the two-way trade between the two countries in 2005-2006 stood at $3.44 billion (does not include import of petroleum products and crude). For Saudi Arabia, India was the fifth largest market for its exports, accounting for around six percent of its total exports. In terms of imports by Saudi Arabia, India ranked ninth and was the source of around 3.09 percent of the Kingdom’s total imports.
Trade figures for the last five years are given below:
The principal Indian exports to the Kingdom were basmati/nonbasmati rice, tea, manmade yarn, fabrics, made-ups, cotton yarn, primary and semi-finished iron and steel, chemicals, plastic & linoleum products, machinery and instruments
India’s major imports from the Kingdom comprise petroleum and petrochemical products. Saudi Arabia is also the largest supplier of crude oil to India accounting for a quarter of India’s crude exports. During 2004-2005, India’s imports of crude oil and petroleum products from the Kingdom amounted to 18.816 million metric ton (MMT) valued at around $6.13 billion.
In terms of human resources development, Indian manpower made a significant contribution to the Saudi economy, which absorbed 1.3 to 1.4 million Indians, of whom over 90 percent were in the blue-collar category.
Exchange of visits between the business communities on both sides also helped to maintain the forward thrust of bilateral relations.
Indian business delegations’ visits to the Kingdom and those of Saudis to India during last couple of years helped in identifying new areas of cooperation between the two countries leading to technology transfer and job opportunities for the nationals of both countries.
At the pan-Gulf level, the first GCC-India Business Conference was held on Feb. 17-18, 2004 at Mumbai. A large number of ministers, senior officials, industrialists and business leaders from India and the GCC states attended this conference. The conference lent a new momentum to the burgeoning relations between the GCC States and India, particularly in the field of economic and commercial exchanges.
The Second GCC-India Business Conference held on March 25-26, 2006 at Al Bustan Palace Hotel in Muscat (Oman) brought together ministers, senior officials, industrialists and business leaders from India and the GCC states. India’s trade with the GCC countries was expected to exceed $20 billion (excluding oil imports) during the financial year 2005-06, equaling India’s trade with Europe. India and GCC have made significant progress in pursuing the proposal for the bilateral Free Trade Agreement (FTA). The conference has decided to hammer out an agreement this year.
The Third GCC-India Industrial Conference was held in Mumbai on May 29-30, 2007. The conference was attended by Ministers of GCC states, including Dr. Hashim Yamani, the minister for industry and commerce from Saudi Arabia, Maqbool ibn Ali ibn Sultan, minister of commerce and industry of Oman, and official representatives of other GCC States.
In retrospect, Indo-Saudi business have remained buoyant over the years as they seek to complement each other’s strengths across a broad spectrum in the industrial and other sectors. The potential for future growth is immense, especially as the Kingdom has already laid out a road map for building six economic cities as part of its comprehensive strategy to make the country one of the ten most competitive economies by 2010. In this context an upcoming event in India should be of great interest to the Kingdom.
The National Productivity Council (NPC) will be organizing the 2nd International Conference on Technology and Innovation for Knowledge Management from Feb. 12-14, 2008 to mark the golden jubilee celebrations of NPC. Since the Kingdom, too, seeks to boost its level of competitiveness, SAGIA could participate in the event, which will be held in New Delhi. The Indian Embassy could seize the initiative by promoting the event in Saudi Arabia and opening new vistas of cooperation between the two countries.