Modi visit to Riyadh added new dimension to Saudi-India ties

STRATEGIC PARTNERSHIP: Custodian of the Two Holy Mosques King Salman with Indian Premier Narendra Modi in Riyadh.
Updated 15 August 2016

Modi visit to Riyadh added new dimension to Saudi-India ties

RIYADH: India’s engagement with the Arabian peninsula, especially with Saudi Arabia, dates back to several millennia when traders and sailors from South Asia used to sail across the Arabian Sea, in boats made of Malabar wood.

The relationship got reinforced and strengthened over a period of time with robust exchanges and there emerged a strong symbiotic relationship, which has stood the test of time and is growing stronger and stronger.
Moreover, “the historic visit of Prime Minister Narendra Modi to Riyadh in April this year at the invitation of Custodian of the Two Holy Mosques King Salman is seen as a turning point in our growing engagement with Saudi Arabia,” said Ahmad Javed, Indian ambassador, while speaking on the occasion of independence day.
The visit, which saw signing of several agreements, added new dimension to the ties.
This is in addition to several high-profile exchange of visits between the two countries in the past.
In fact, continuous political interaction has nurtured and shaped ties between the Kingdom and India in recent decades.
The visit of late King Abdullah to India in January 2006 was indeed another historic landmark in the political and economic relations between the two countries.
India as a nation and Indian people, especially those living in the Kingdom, were honored to hear from King Abdullah that he regarded India as his “second home”.
But, the visit of Prime Minister Modi to Riyadh undoubtedly opened a new chapter in bilateral cooperation in diverse fields and has contributed to a qualitative upgradation of the already strong bilateral relationship.
But, there is enormous potential in relations with Saudi Arabia; and New Delhi is determined to enhance the areas of interaction.
The past few months has witnessed positive developments that has brought India-Saudi relations to the threshold of a new phase in bilateral relations.
The two countries are in the midst of a serious, constructive and purposeful interaction process. Although trade and people to people ties are ancient and historic, yet government diplomatic efforts between the two countries have helped to make these relations stronger, more vibrant, contemporary and mutually beneficial.

No doubt, 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 $26.7 billion last year. Bilateral investment was also on the upswing.
Saudi Arabian General Investment Authority (SAGIA) has issued 426 licenses to Indian companies for joint ventures, which will bring more than $1.6 billion investment to the Kingdom.
In fact, Saudi investment in India also gained momentum on the strength of business opportunities emerging in its vibrant economy.
Saudi Arabia, as the 48th biggest investor in India, had investments worth $65 million up to March this year.
Apart from this, Saudi petrochemical giant SABIC had set up its R & D center in Bangalore with an investment of $100 million.
These Saudi-India joint ventures or Saudi-owned companies in India cover 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 Kingdom, in fact, is the eighth largest market in the world for Indian exports and is the destination to more than 2.44 percent of India’s global exports,” said a report published on the website of Indian embassy.
For Saudi Arabia, India is the fifth largest market for its exports, accounting for 8.87 percent of its global exports.
The principal Indian exports to Saudi Arabia have been basmati/non-basmati rice, tea, manmade yarn, fabrics, made-ups, cotton yarn, primary and semi-finished iron and steel, chemicals, plastic and 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.
In terms of human resources development, Indian manpower has made a significant contribution to the Saudi economy, which absorbed about three million Indian workers, of whom over 80 percent are 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 decade helped in identifying new areas of cooperation between the two countries leading to technology transfer and job opportunities for the nationals of both countries.
No doubt, the centuries old two-way trade was mutually beneficial for the people of India and Arabian Peninsula, enhancing their knowledge and understanding, besides fulfilling their day-to-day requirements.
On the other hand, the Indian government has always been supporting the endeavors undertaken by the leadership of Saudi Arabia to improve the Haj management, which has made the pilgrimage for the Muslims from across the world a safe and comfortable experience.
The leadership of the two countries has displayed a strong commitment to further the historical bonds of friendship.
The visit of late King Saud bin Abdulaziz to India in 1955 marked the beginning of high-level bilateral engagement, which was followed a year later by the visit of the then Indian Prime Minister, Jawaharlal Nehru, to the Kingdom. Later, Crown Prince Faisal bin Abdulaziz visited India in 1959 and the then Indian Prime Minister, Indira Gandhi, visited the Kingdom in 1982.
The visit of then Indian Prime Minister Manmohan Singh to Saudi Arabia in 2010 and the signing of the ‘Riyadh Declaration’ during the visit gave a further boost to the momentum of bilateral relations. It elevated the engagement between the two countries to the level of strategic partnership and articulated their commitment to promote bilateral ties in political, economic, security, defense and cultural areas.
Based on the framework provided by the Delhi Declaration and Riyadh Declaration, bilateral relations between the two countries have been strengthened with increase in ministerial visits and stronger economic ties based on substantial trade relations and investments.
The tone set by the landmark visits opened new vistas in bilateral cooperation.
Moreover, the two countries have a shared vision for global peace and development.
India supports the Kingdom’s efforts in combating global terrorism and both the countries strive to join efforts to put an end to the scourge of extremism and violence, which constitute threat to all nations. Custodian of Two Holy Mosques King Abdullah’s initiative to promote interfaith dialogue is well received and appreciated by the Indian leadership.
The role played by about three million Indian expatriates in the growth and development of the Kingdom is well appreciated by the Saudi leadership and has played an important role in bringing the two countries closer.
They have been participating in all the major developmental projects in the Kingdom.
On the cultural front, a 45-member Saudi youth delegation visited India on a 10-day tour recently, to promote understanding and friendship among the youth of the two countries.
The Saudi Youth delegation visited premier institutes such as Indian School of Business, Infosys, Narayan Hrudayalaya, Institute of Electrical & Electronic Engineering and many other institutions, and also interacted with Indian business leaders at an event organized by the Confederation of Indian Industry (CII).
The delegation also met Indian political leaders and other senior officials of the ministry of external affairs in New Delhi.
Referring to the progressively growing relations between the Kingdom and India, an Indian embassy report said that “two countries share a historical relationship spanning several millennia, which is characterized by strong civilizational, cultural and socio-economic ties.”
The historic visit of the Custodian of the Two Holy Mosques King Abdullah to India in January 2006 marked the beginning of a new phase in bilateral relations.
The warm reception accorded to the then Indian Prime Minister, Manmohan Singh, during his official visit to the Kingdom in February-March 2010 reflected the importance attached to the bilateral ties by the leaderships of both countries.
Singh was awarded the King Abdul Aziz Sash of first class by King Abdullah, and was given the privilege of addressing the members of Majlis Al-Shoura.
No doubt, the Indo-Saudi ties are flourishing.
The achievements are there for all to see. India and Saudi Arabia today stand tall in the comity of nations, and are justly praised for their enduring commitment to liberty and human rights in the most difficult of circumstances.
In the economic field, too, India and Saudi Arabia are acknowledged giants, major role-player in industry, agriculture and services, and are striding confidently forward in the vanguard of modern technology.
The values of secularism, moderation, tolerance and cross-cultural interaction, which have been India’s core national values for centuries, have assumed a new meaning and urgency in contemporary times.
Hence, It is not surprising that the Indian model is seen as worthy of emulation by other societies and other societies and nations.

Blame game as wheels come off India’s auto sector

Updated 7 min 3 sec ago

Blame game as wheels come off India’s auto sector

NEW DELHI: When India’s Finance Minister Nirmala Sitharaman claimed that a preference by millennials for ride-hailing apps was contributing to a painful slump in car sales, it sparked an online backlash from furious youngsters.

They started a campaign using ironic hashtags such as #BoycottMillennials and #SayItLikeNirmalaTai last week to push back against older generations blaming them for today’s problems in society.

While data shows firms such as Uber and Ola are popular with younger consumers more comfortable with shared mobility and digital trends, analysts say the auto industry’s problems run deeper than that — and it is facing more serious bumps in the road.

With a population of 1.3 billion people, India is the world’s fourth-largest car market and one where owning a vehicle is as much a status symbol as a means of transport.

But the country’s once-booming auto sector — seen as an important barometer of overall economic health — is in the slow lane, with sales slumping for the 10th-straight month in August.

“The minimum (priced) car that you can get nowadays starts from six to seven lakhs ($8,500 — $9,800),” university student Somya Saluja told AFP.

“So it’s much easier to pool-in rather than to buy a new car.”

Even India’s richest banker, Uday Kotak, recently said that his son was more comfortable using ride-sharing apps than owning a car.

Uber and Ola reportedly facilitate some 3.65 million daily rides.

Still, Avanteum Advisers managing partner VG Ramakrishnan told AFP the key reason for the drop in car purchases was economic.

“I think the slowdown is primarily because consumer confidence is low and income growth has really been impacted in the last couple of years,” he told AFP.

India’s economic growth slowed for the fifth-straight quarter in April-June to reach its weakest pace in five years.

Banks are also more reluctant to lend owing to a liquidity crunch caused by the near-collapse a year ago of IL&FS, one of India’s biggest shadow banks — finance houses responsible for significant consumer lending.

There are also extra production costs caused by new rules requiring cars to be compliant with emissions and safety standards, while a 28 percent goods and services tax (GST) introduced in 2017 has dampened demand, analysts said.

“Cars are increasingly becoming unaffordable now because of so many taxes,” Karvy Stock Broking auto analyst Mahesh Bendre told AFP.

“To put things in perspective, if you buy a car in India, at least 40-45 percent of costs go to the government in terms of taxes and registration charges and so on.”

A year ago, India displaced Germany to become the world’s fourth biggest car market, having clocked up annual sales growth above seven percent for several years.

But the promising growth ride is screeching to a halt, with passenger car sales tumbling this year, including a 41 percent drop last month — the worst since records began more than 20 years ago.

Aside from passenger cars, sales of commercial vehicles, motorcycles and scooters have also been hammered.

With the industry — a major employer in India — contributing more than seven percent to total GDP and almost half of manufacturing GDP, the potential fallout from an extended slowdown is sending shockwaves through the economy.

Manufacturers are reducing production and cutting jobs, which is also affecting related industries such as auto component manufacturing and at dealerships, totaling about seven percent of India’s total workforce, Bendre said.