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PM seeks Saudi investment in India's infrastructure sector
New Delhi, February 28, 2010
Prime Minister Manmohan Singh today invited investors and entrepreneurs from Saudi Arabia to explore investment opportunities in India, given its vast needs for high quality modern infrastructure.
"We have opened our doors to foreign investment...I would specifically refer to the construction, manufacturing, pharmaceuticals, health, agriculture, energy, telecommunications, tourism and other service sectors," he told the Council of Saudi Chambers of Commerce and Industry in Riyadh today.
Dr Singh reached Riyadh yesterday evening at the start of a three-day visit aimed at imparting a strategic character to the bilteral relationship beyond the traditional areas of cooperation between the two countries.
He said the two countries should also look at new areas of cooperation and pointed out that education and skill development were of primary importance to both of them.
He said India had a proven track record in the field of knowledge-based industries, which had great potential for improving the skill set of the work force.
"India would be happy to share her experience with Saudi Arabia in the area of human resources development. Cooperation in the areas of science and technology and space technology are other areas for future cooperation," he said.
The Prime Minister also called for greater exchanges among the Chambers, industry associations and business houses of both sides. He said more frequent participation in trade fairs and exhibitions would create greater awareness of each others’ capabilities, he said, assuring his government's full support to the expansion of business-to-business links between the two countries.
He said the integration of their economies with the rest of the world had created new opportunities but also brought new challenges. He said the global financial crisis had thrown up a broad agenda for global action and reforms.
"The role of emerging economies such as India and Saudi Arabia within the G-20 framework and otherwise will be crucial to the restructuring of the global economic and financial architecture," he remarked.
Dr Singh said India viewed its economic cooperation with Saudi Arabia in the wider context of its interactions with the entire Gulf region.
"This is an area with which we have deep and historical ties. The Gulf countries are our natural partners in every sense of the term. Indians are the largest expatriate community in every country of the Gulf Cooperation Council. Our businesses should work together across the region, develop cross-country linkages and leverage economies of scale," he said.
He hoped the interaction between the two sides would bring vitality and dynamism in the cooperation between our two economies.
"India sees Saudi Arabia as a strategic partner for promoting peace, stability and economic development. Such a partnership will bring benefits not only to our two countries but to the region we both belong to, and to the world at large," he said.
Saudi Commerce and Industry Minister Zainal Ali Reza and Mr Abdul Rahman al-Jeraisy, Vice-Chairman of the Council, were amongst those present on the occasion.
Dr Singh said he had had some association with the evolution of the India-Saudi Arabia economic partnership, having attended the 4th session of the India-Saudi Arabia Joint Commission as Finance Minister in 1994/
"A lot has changed between then and now in our bilateral relations, in our two economies and in the global environment," he said.
According to him, the visit of King Abdullah to India in January 2006 was a defining moment in the relations. The landmark Delhi Declaration that the two leaders signed had identified higher flows of trade and investment, better connectivity and exchange of ideas as the central pillars of the joint vision for an enhanced economic partnership.
He said he looked forward to his dialogue later today with King Abdullah to carry forward the momentum and take the entire gamut of the relations to even greater heights. "I believe this is not only eminently possible, but also necessary," he said.
Dr Singh noted that, since 1990, Saudi Arabia's economy had quadrupled in size. He said it had undergone substantial diversification with the strengthening of the non-oil sector. The ambitious economic cities that are proposed to be set up have the potential to further transform the Saudi economy. All these developments have and will widen employment opportunities for the growing young population in Saudi Arabia, and enhance Saudi Arabia’s economic weight globally, he said.
He said India, too, had registered significant grwoth and was in the midst of a major socio-economic transformation. He said the Indian economy had grown at an average annual rate of over nine per cent in the last few years.
"Despite the global economic slowdown, we hope to achieve a growth rate of over 7 per cent in the current financial year. We expect to get back to the growth level of about 9 per cent per annum within two years. Our domestic saving rates are high, and can support investment rates of as high as 38 per cent of our Gross Domestic Product. India is an economy with a huge market, and a young and expanding work force. We have a vibrant and innovative private sector," he said.
The Prime Minister pointed out that both countries had in place a sound institutional mechanism to facilitate trade and investment, including a Double Taxation Avoidance Agreement and Bilateral Investment Protection Agreement.
"Eight meetings of the Joint Commission have been held, the last having met in October 2009. We cooperate within the framework of the India-GCC Industrial Conference, and negotiations are in progress to finalise a India-Gulf Cooperation Council Free Trade Agreement," he said.
He said India deeply valued Saudi Arabia's role as a reliable partner in meeting its energy needs.
We believe that conditions are ripe for moving beyond a traditional buyer-seller relationship to a comprehensive energy partnership. Indian companies are well equipped to participate in upstream and downstream oil and gas sector projects in Saudi Arabia. We should also establish new partnerships in the area of new and renewable energy through sharing of clean technologies and joint collaborations," he said.
Dr Singh said the robust growth of the two economies offered immense opportunities for the business communities from both sides.
"Our bilateral trade has reached almost 25 billion US dollars in 2008-09. Indian investments into the Kingdom have risen considerably and today stand at more than 2 billion US dollars covering over 500 joint ventures. Several major Indian companies have already established their presence in the Kingdom. Our public sector company, RITES has recently won a contract to participate in the North-South Railways project. There is however potential for doing much more," he added.