Modi calls for paradigm shift in trade relations

RIYADH: Indian Prime Minister Narendra Modi told Saudi businessmen in Riyadh on Sunday to move from the traditional export-import relationship to joint investments, technological transfers and non-traditional areas in bilateral trade.

Modi was addressing Saudi businessmen at the Council of Saudi Chambers (CSC) in the presence of CSC Chairman Abdulrahman Al-Zamil, Commerce and Industry Minister Tawfiq Al-Rabiah and Minister of Economy and Planning Adel Fakeih. A group of 30 top Saudi CEOs and Indian business leaders were also present at the event.
Spelling out the favorable investment climate in India, Modi said demographic features include 800 million youths under the age of 35, a demand for a vast market in a population of over 1 billion, and its democratic values.
He also invited Saudi Arabia to invest in India’s key sectors like mining, defense, insurance, railways and oil as he projected his country as an attractive investment destination during the time of a global economic slowdown.
He said his government is looking for major investments in defense production, railways, deep sea offshore oil exploration and coal gasification to produce clean energy.
He said the Kingdom has rich experience in high temperature deep sea offshore exploration and this sector has been opened up for foreign direct investment from this month.
“I am planning to build 50 million houses throughout India, where Saudi investors could come in for viable ventures.”
Modi said railways and food processing sectors have been opened up for 100 percent foreign direct investment and that there are huge investment opportunities in building a cold storage network as well as in the manufacture of equipment for generation of solar power.
Pointing out that India’s biggest import bill after petroleum products is defense equipment, Modi said the two countries could join together to produce defense equipment not only to serve the two countries but also to export such items to other countries which need them.
Answering a question from Kamil Al-Munajid, president of the Saudi-Indian Business Council (SIBC), the premier said that there are several foreign banks currently functioning in India, and the Saudi banks will also be allowed to ensure their presence in coordination with the respective states in due course.
The Indian premier also said that the tax issue has become a thing of the past, saying, “India is committed to making its tax system predictable, and my government has taken initiatives in this regard in the general budget of the central government.”
He also said: “As much as we fight against terror, we must also fight against cyber terror which needs our attention every moment.” India has the expertise in IT and the two countries can cooperate with each other to fight this growing menace, he stressed.
Welcoming the prime minister, Al-Zamil said Modi’s visit was timely since the Kingdom is trying to diversify its economy under the national transformation program.
Zamil said that Saudi Arabia’s economy ranks fourth among the fastest growing economies in the G-20, followed by China, India and Indonesia. Trade exchange between the two countries has doubled since 2005 to $36.6 billion in 2014, making India the seventh largest country for imports from Saudi Arabia and the fifth largest destination for Saudi exports.
“Indian companies are mainly engaged in energy, information technology and manufacturing areas in the Kingdom,” he said, pointing out that the Saudi Arabian General Investment Authority (SAGIA) has also issued more than 400 licenses to Indian companies bringing the total value of Indian investments to around $1.6 billion.
Minister Al-Rabiah said that the relations between the Kingdom and India are based on a solid and stable foundation. He called on the private sector in both countries to take advantage of the large investment opportunities and the search for creative solutions to overcome problems encountered in promoting and pushing the trade relations of cooperation. The minister said the volume of trade dropped to $36.4 billion from $42.6 billion mainly due to the drop in oil prices.
Al-Munajid described Modi’s visit as an impetus to the economic, investment and trade cooperation between the two countries, and a reflection of the strategic dimension of Saudi-Indian relations.
He further reinforced the role of SIBC in enhancing trade between Saudi Arabia and India, noting that over 400 Indian firms exist in Saudi Arabia, with continued interest of Indian firms to enter the Saudi market, particularly following the signing of the double taxation agreement.
These firms specialize in multiple sectors, ranging from construction, administrative consulting, IT and pharmaceuticals, among others.
Earlier, Modi met Saudi women who are being trained at the Tata Consultancy Services center where some 2,000 Saudi women are receiving IT training. The target is to train 20,000 Saudi women by 2020.