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Saudi Arabia may set up India investment fund

DUBAI: Saudi Arabia is considering establishing an India investment fund as part of an effort by New Delhi and Riyadh to shore up their political and economic ties. The proposal for a fund that could cater primarily for Indian infrastructure projects was mooted during talks between the visiting Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia and Saudi officials.

Mr. Ahluwalia’s two-day visit, which concluded on Sunday, comes close on the heels of a visit to Saudi Arabia last month by the External Affairs Minister, Pranab Mukherjee. During his visit, Mr. Mukherjee had said that India was looking for a 500-600 billion dollars investment for developing its infrastructure.

“The talks took place in the backdrop of the excellent political relations that India and Saudi Arabia have established. The purpose of Mr. Ahluwalia’s visit was to carry forward the process of translating political goodwill into concrete projects,” diplomatic sources said.

Keeping up the momentum that has been imparted to Indo-Saudi ties in recent weeks, the Vice Chief of the Army Staff, Lt.Gen.M.L. Naidu, also arrived for talks in the Saudi capital late on Monday. In parallel, a delegation of academics and artistes has just concluded a visit to Saudi Arabia’s Red Sea port city, Jeddah. Sources pointed out that Saudi Arabia is looking for tie-ups with India on Information Technology, including e-governance.

The Saudi authorities acquainted Mr. Ahluwalia about the possible opportunities that India could avail in the development of a number of “economic cities,” essentially economic free zones that Saudi Arabia is establishing. For instance, Saudi Arabia has set up Knowledge Economic City (KEC) in Madinah for attracting foreign participation in the IT sector.

Top Indian IT companies including Infosys, Wipro and Tata Consultancy Services have a presence in the Kingdom. Wipro has already signed an agreement to develop a Research and Development centre as well as a training facility in KEC.

The construction of railways in Saudi Arabia offers India yet another avenue of opportunity. Saudi Arabia’s apex Supreme Economic Council (SEC) had approved the construction of a 950-km track that would connect the Gulf in the east and Saudi Arabia’s Red Sea coast on the west.

According to the Saudi Arabia General Investment Authority (SAGIA), the Kingdom, for the next 10 years, will spend $100 billion dollars to revamp its transport network, which also includes development of a string of ports and airports. Sources pointed out those Indian companies have good chances of involving themselves in sub-contracting and managing the Kingdom’s growing railway network.

During his stay, Mr. Ahluwalia met Saudi Arabia’s top business tycoon and member of the royal family, Prince Walid bin Talal. Prince Walid has already invested in two hotels in India. During his talks, he shared his openness for making further investments in India. The Deputy Chairman held meetings with the Saudi Finance Minister and his counterpart, the minister for economy & planning.

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