Indian officials and businessmen have given utmost
importance to the visit of Saudi delegation, including top executives of 30
major Saudi companies, and believe it would pave the way for more Saudi
investments in India. The Saudis on the other hand are looking for joint
ventures with major Indian companies and industries.
Saudi Arabia and other Gulf Cooperation Council states
are looking toward East, especially to India and China, for investment
following 9/11 incidents and economic crisis in Western countries and India is
planning to make use of this trend to mobilize funds required for its
infrastructure and service projects.
This is Al-Rabiah's first official visit abroad after
became the minister last month. A former director general of Saudi Industrial
Property Authority, he has vowed to strengthen the industrial sector as part of
the Kingdom's diversification drive. His visit is likely to open a new era in
Saudi-Indian industrial cooperation.
Saudi Arabia, which is the largest economy in the Middle
East and posted the best economic performance in 2011 in 20 years despite the
prevailing global recession, will explore investment opportunities in India
under the aegis of the Associated Chambers of Commerce and Industry of India
(ASSOCHAM).
The Kingdom's industrial sector achieved 15 percent
growth rate in 2011 and private sector's contribution to the gross domestic
product (GDP) amounted to 49 percent in 2011. Housing, road and railway
projects are key sectors where Indian investments and work force can make a
mark, said ASSOCHAM.
Other potential sectors include information technology,
telecommunications, education and training, healthcare services, tourism and
hotel industry, banking and financial services, power generation, oil, gas and
petrochemicals, said its Secretary-General D.S. Rawat.
He said a 30-member trade delegation from India will
visit Saudi Arabia later this month to meet key Saudi government officials and
businessmen for exploring new business avenues. It will visit cities of Riyadh,
Jeddah and Dammam during third week of January.
A total of 190 Indian companies are currently active in
the Saudi market with investments totaling $2 billion - 39 in industries, 54 in
services and 93 in agriculture besides others in construction, information
technology, designing, consultancy and financial services.
A total of 55 Saudi companies or joint ventures are
operational in India with a total investment of $200 million, mainly in paper
manufacture, chemicals, granite processing, industrial products, machinery,
cement and metallurgical industries.
"However, there is still an enormous potential to
take this business further," said Rawat.
Saudi Arabia has the world's second largest oil reserves
and is a leading member of the six-member GCC. Two-way trade between India and
GCC could exceed $130 billion by 2013-14, up from $100 billion in 2010.
The GCC countries and India have identified various
potential sectors for bilateral cooperation like petroleum oil and energy, gas
and fertilizers, information technology, higher education, civil aviation and
agriculture. A framework agreement for the FTA has already been signed.
The India-GCC FTA is expected to open a billion
consumers' market for Gulf countries. An FTA in the region will benefit India
substantially as the six member countries control over 45 percent of the
world's recoverable oil wealth and 20 percent of gas resources. They supply
about a fifth of the global crude output.
The FTA will remove restrictive duties and push down
tariffs on goods being traded. This will provide Indian pharma and chemical
industry to export their products to the Gulf region. India is Saudi Arabia's
fourth largest trading partner while Indians form the Kingdom's largest
expatriate work force, from IT to construction, consisting of both blue-collar
workers and professionals.
Items having export potential from India to GCC countries
include food products, pharmaceuticals, machinery and transport equipment,
ceramic products, articles of apparel and clothing, cotton and woven fabrics,
plastic and rubber products, essential oils, perfumery and cosmetics besides
iron and steel articles.
