India, Saudi Arabia aim for major JVs, investments

RIYADH - India and Saudi Arabia Sunday agreed that despite growing bilateral trade there was still a vast area of investment still to be tapped.

“On the economic and commercial side, both sides expressed happiness that our trade is growing and we are now at $26-billon two-way trade,” Latha Reddy, secretary (east) in the Indian ministry of external affairs, said on the second day of Prime Minister Manmohan Singh’s three-day official visit to Saudi Arabia.

“But it was felt that there was a vast potential yet to be tapped, particularly in the area of investments, and both sides agreed towards facilitating major joint ventures and investments between our countries,” she said.

Briefing the media, Reddy said Saudi Arabia’s Minister for Petroleum and Mineral Resources Ali Al Naimi, Foreign Minister Prince Saud Al Faisal and Minister for Commerce and Industry Abdulla Zainal Ali Reza called on Manmohan Singh.

“Some of the areas which were identified were petrochemicals, fertilisers, and also tie-ups between institutes of technology, the healthcare sector,” Reddy said.

Overall, she added, the Saudi leaders expressed confidence that there would be a substantial increase in Saudi investment in India over the coming years as the country was seen as a safe and secure environment for investment.

“They also expressed an interest in seeing an early conclusion of the GCC (Gulf Cooperation Council) free trade agreement,” the secretary said.

“Both sides agreed to give importance to this subject and work towards an early conclusion of this agreement which would certainly boost trade between the two countries.”

According to Reddy, Saudi Arabia’s national oil company Aramco informed the Indian side that it has set up a procurement office in India that was procuring $400 million worth of goods and services from India.

“The prime minister emphasised that we already have in place the double taxation avoidance agreement and the bilateral investment protection agreement, which would give good safeguard and protection for any major investment by Saudi Arabia,” she said.

Reddy said the joint commission between the two sides and meetings on a regular basis would carry forward all important trade, investment and economic matters.

“Both countries agreed that their national industrial development policies would be a useful area for mutual exchange of information since both countries had expressed interest in bringing up the share of their manufacturing industries in their respective GDPs (gross domestic products),” she said, adding that both sides agreed to keep direct lines of communication open to resolve all issues without going through the normal “bureaucratic measures”.