Khaleej Times, UAE
India, Saudi Arabia sign landmark business deal
FROM OUR CORRESPONDENT
26 January 2006
NEW DELHI - India bilateral business and economic ties with Saudi Arabia got a significant boost with the signing of the proposed Bilateral Investment Protection Agreement (BIPA) and the Double Taxation Avoidance Agreement.
These twin agreements would provide the legal and institutional framework for giving a boost to India-Saudi trade and investment ties, said Commerce Secretary S N Menon yesterday after attending the special session of India-Saudi Arabia Joint Business Council (JBC) meeting.
India is in the process of negotiating a Free Trade Agreement (FTA) in goods with the Gulf Cooperation Council (GCC), of which Saudi Arabia is a prominent member.
One of the most striking merits of strengthening ties with Saudi Arabia is that once the FTA becomes operational, many of the bottlenecks in trade with member nations of the GCC would be removed.
The federal government here has urged businessmen from India and Saudi Arabia to leverage the unfolding opportunities and take Indo-Saudi trade to greater heights with the visit of the Custodian of the Two Holy Mosques, King Abdullah bin Abdulaziz of Saudi Arabia.
The government officials said that with the signing of twin agreements both India and Saudi Arabia would provide the legal and institutional framework for giving a boost to India-Saudi trade and investment ties.
"We are working on the second India-GCC conference to be held in Oman in March this year," said Mr Menon. These initiatives are expected to provide the much-needed fillip to India-Saudi business relations. The government has underlined the growing India-Saudi Arabia co-operation, as already 106 joint ventures with a global investment of $445 million have taken shape in the last few months in the oil rich kingdom.
The Ministry of Finance and Ministry of Trade and Commerce led by minister P Chidambaram and Kamal Nath are separately negotiating deals with the Saudi Arabian officials.
The Saudi King is represented by a large business delegation that includes a specially created group comprising its Council of Ministers.
Meanwhile, the Chairman of Council of Saudi Chambers of Commerce and Industry (CSCCI) Abdulrahman Al Rashed, Co-Chairman, Saudi-India Business Council, Dr Abdulrahman Al Rabiah, Secretary General, CSCCI, Dr Fahad AlSultan, Vice President, Shared Services & Fanar Project Mansour, Al Kharboush, participated in the meetings.
Al Rasheed said here that "collaboration between India and Saudi companies is an important axis for strengthening bilateral trade and investment."
The Saudi officials have pointed out that while bilateral trade has been growing, India needed to further liberalise import regulations and reduce high customs tariffs in certain products, which were hindering Saudi exports to India.
India has emerged as Saudi Arabia’s fourth largest export destination with $9.8 billion worth of exports. Oil accounts for 94 per cent of the exports.
Saudi imports from India are, however, much lower at $1.6 billion. India is Saudi Arabia’s fourth largest export destination with $9.8 billion worth of exports.
Out of this, oil and oil related products account for 94 per cent of the exports.
Both India and Saudi Arabia set up the Joint Commission for economic, trade, scientific, technical and cultural cooperation (JCM) in 1981.
It is significant to note that the visit of Saudi King has come after both the sides held its sixth session of JCM in Riyadh on April 12, 2005.
Mr Chidambaram had led the Indian delegation, while the Minister of Economy & Planning & Acting Minister of Commerce & Industry Khaled Al Gosaibi represented the Saudi side.
India and Saudi Arabia are also actively cooperating in the field of science and technology. CSIR and the Saudi Arabian Standards Organisation (SASO) have an ongoing programme of technical cooperation since June 1993.
Under this programme, Indian experts in different scientific areas, particularly in the field of measurement and calibration, are deputed to Saudi Arabia on regular basis.