Modi govt could be in for a big Saudi gift

Saudi Crown Prince Md Bin Salman is planning his maiden trip to India soon, it is learnt. The development could give the poll-bound government a big boost to stabilising oil prices amid crisis in Venezuela and investments in key sectors.Saudi Arabia’s investments in India remain relatively low despite its financial clout and upward trajectory in Indo-Saudi political ties. The richest Gulf country and India’s top oil supplier is now planning to invest big in India, ET has learnt. Prince Salman’s trip, if materialises, could take the Indo-Saudi economic and strategic partnership, including security ties, to the next level, according to people familiar with the development. After a meeting between Prime Minister Narendra Modi and Crown Prince Salman in Buenos Aires last November, the two nations decided to set up a mechanism for promoting Saudi Investments across energy, defence, food security and manufacturing sectors over the next 2-3 years. Salman was the first leader that Modi met after reaching Argentina and there was visible warmth when the two leaders met. The crown prince is learnt to have informed the prime minister that Saudi Arabia will be finalising an initial investment into the National Infrastructure Fund. He also referred to the prospects for investment in technology, agriculture and energy sectors. Modi had stressed on the importance of stable and predictable energy prices and some discussions took place between the two leaders on how Saudi Arabia could contribute and help stabilise the energy prices, particularly for India. “The crown prince was especially mindful of the contribution that Indians have made in the building of Saudi Arabia over the years and he specifically expressed appreciation for this. The prime minister, of course, expressed happiness over this and also thanked him for looking after the well-being of our citizens there,” foreign secretary Vijay Gokhale told reporters after Modi-Salman meet. Saudi Arabia is India’s fourth largest trade partner after China, the US and the UAE. “The visit of Prime Minister Narendra Modi to Riyadh from April 2-3, 2016 could be seen as a turning point in our growing engagement with the Kingdom of Saudi Arabia, which has taken an upward strategic direction,” the external affairs ministry said in a statement. “Saudi Arabia is a major source of energy as we import around 17% of our crude oil requirement from the kingdom. In 2017-18, the India-Saudi bilateral trade increased 9.56% to $ 27.48 billion. During this period, our imports from Saudi Arabia reached $22.06 billion, registering an increase of 10.50% over the previous year ($19.97 billion), whereas our exports to Saudi Arabia reached $5.41 billion, registering an increase of 5.88% over the previous year ($ 5.11 billion),” the MEA document said. The current bilateral trade (April-October 2018 provisional figures) is valued at $19.64 billion. Saudi Arabia is the 15th largest market in the world for Indian exports and is the destination to 1.85% (2017-18) of India’s global exports. It is also the third largest source (4.74% in 2017-18) of India’s global imports.For Saudi Arabia, as per 2017 data, India is the fourth largest market for its exports, accounting for 8.88% of its exports. In terms of imports, India ranks seventh and is source of around 4.13% of its total imports. According to Saudi Arabian General Investment Authority (SAGIA), there are 322 Indian companies as joint ventures or wholly owned entities worth $1.4 billion in the Kingdom till December 2017. These licences are for projects in diverse sectors such as management and consultancy services, construction, telecommunications, IT and pharmaceuticals. Several Indian companies have set up collaborations with Saudi companies and are working in the fields of designing, consultancy, financial services and software development.Saudi Arabia ranks 48 in terms of India-bound investments between April 2000 and June 2018 with a funding of $208.38 million. Saudi petrochemical giant SABIC set up its R&D unit in Bangalore with an investment of over $100 million in November 2013. Aramco Asia India Ltd, the India office of Aramco, was inaugurated on October 8, 2017 and Saudi Aramco signed a $44-billion deal in April 2018 with an Indian consortium to acquire 50% stake in Ratnagiri Refinery & Petrochemicals Limited. The UAE-based ADNOC, too, signed an agreement to pick up 25% of Saudi Aramco’s share in the Ratnagiri project. Saudi-headquartered Al-Fanar is executing a 300-MW power project in Kutch. Many other Saudi companies also have invested in India through their non-Saudi subsidiaries.

from Economic Times http://bit.ly/2WvMEOG
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