The Hindu : Front Page : India, Saudi Arabia initiate key economic measures to boost relations

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Monday, Apr 21, 2008
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India, Saudi Arabia initiate key economic measures to boost relations

Atul Aneja

Agreement on investment fund signed; long-term visas for businessmen

Bilateral Investment Promotion and Protection Agreement ratified
Steps to promote cooperation in the field of defence

RIYADH: India and Saudi Arabia have adopted key measures to propel an economic partnership and pave the way for a strong multifaceted relationship.

Talks between the visiting External Affairs Minister, Pranab Mukherjee and his Saudi counterpart, Saud Al Faisal, resulted in an agreement on establishing a Saudi-India investment fund. This corpus would help kick-start investments in major projects, diplomatic sources said.

Mr. Mukherjee reiterated that India required an investment of around $500-600 billion to build its infrastructure. This included construction of roads, railways, ports, airports as well as petrochemical plants.

Keen to encourage movement of business travellers, a decision has been taken to issue long-term visas to businessmen. The application of these visas would be routed through the apex chambers of commerce of the two countries. The External Affairs Ministry spokesman said the participation of the chambers would ensure that only “genuine businessmen” availed this facility.

A major legal impediment to closer business ties was also removed on Sunday when the Bilateral Investment Promotion and Protection Agreement was ratified.

The spokesman said that a legal regime is now in place and the stage has been set for the economic relationship to take-off. “I think we have now regained the momentum to push forward the Indo-Saudi relationship. Both countries are now impatient to translate the goodwill into concrete mega-projects,” a diplomat who did not wish to be named said.

Acknowledging India’s efforts to acquire energy security, Prince Saud invited Indian companies to identify specific projects in Saudi Arabia, following an interaction with major Saudi oil majors including the State-run Aramco.

Both leaders agreed that private sector participation should be encouraged. So far, India’s Reliance industries has reportedly expressed an interest in establishing the proposed Jizan refinery in south-west Saudi Arabia. Saudi Arabia has established several “economic cities” in the Kingdom mainly to promote domestic and foreign investments.

The talks covered the security situation in the region in detail. Discussions covered the volatile situation in Iraq, the developments in Iran, Afghanistan and the Palestinian territories. Mr. Mukherjee also apprised Prince Saud about India’s perception about Pakistan following the recent parliamentary elections. He added that he would be visiting Islamabad later in May.

Both countries have also taken early steps to promote cooperation in the field of defence.

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