Commercial ties growing progressively

India and Saudi Arabia are old trading partners with their trade linkages dating back to several centuries. The bilateral relations especially in the domains of economy, commerce, oil, gas, science, energy, banking and investment have reached new heights.
Saudi Arabia and India have established a number of institutional mechanisms for bilateral economic cooperation. These include the Saudi-India Joint Business Council, the Indo-Saudi Joint Commission Meeting, the Joint Working Groups, etc. India and Saudi Arabia are also actively engaged with each other in forums like India-GCC Industrial Conference.
The business ties between the two countries are being steadily expanded and strengthened by continuous interaction and cooperation, including regular exchange of business delegations. Besides being a major trade partner, India sees the Kingdom as an important economic partner for investments, joint ventures, transfer of technology projects and joint projects in third countries. The value of the two-way trade between the two countries in 2011-12 exceeded $36 billion marking a 46.57 percent increase over the previous year.
This is by far the largest increase in bilateral trade during the last five years. The increase has not been one-dimensional. Both imports from and exports to the Kingdom have been increasing. The bilateral trade figures for April-November 2012 ($27.58 billion) registering an increase of 15.15 percent over the corresponding period in the previous year shows that this upswing trend continues.
Today, Saudi Arabia is the 4th largest trading partner for India. Both countries are committed to elevating the current buyer-seller relationship into strategic energy cooperation. Many Indian companies are operating in/from Saudi Arabia. According to The Saudi Arabian General Investment Authority (SAGIA) Indian companies /entities have invested a sum of $1.62 billion in Saudi Arabia from January 2000 to December, 2010. Saudi investors are also looking at investing in India and in fact, they have evinced keen interest to invest in India.
There are opportunities for Indian businessmen and companies in sectors like construction industry, petrochemicals and health & pharmaceuticals in Saudi Arabia while similarly ample opportunities are there for Saudi businessmen and companies in sectors like infrastructure and real estate in India. Trade delegations from the Confederation of Indian Industries (CII) and several Indian Export Promotion Councils have visited the Kingdom and held Buyer-Seller Meets in the Kingdom in the recent past.
Indian companies have been actively participating in several trade fairs and exhibitions held in the Kingdom including the recent Saudi Agro Food exhibition. Saudi business groups have also been visiting India. Saudi businessmen/companies have been participating in Reverse-Buyer seller meets organized by some of the Indian export promotion councils in India. To this end, it is important to note that the 5th India-Saudi Joint Business Council is scheduled to be held in India shortly.
According to a report published recently, India traditionally enjoys cordial relations and cooperation with Saudi Arabia. India’s old, historical ties with Saudi Arabia, coupled with increasing imports of oil and gas, growing trade and investment opportunities, and presence of approximately two million Indian workers in the region, are of vital interest to India. India’s economic linkages with Saudi Arabia have increased steadily especially due to growth in oil imports.
In fact, Indo-Saudi economic relations have shown remarkable growth with bilateral trade showing a marked increase in the last five years. Indian investments in the Kingdom have risen considerably and according to another report, about $ 2 billion have been invested in over 500 joint ventures so far. Many Indian companies are now operating in/from Saudi Arabia. According to the Saudi Arabian General Investment Authority (SAGIA) Indian entities have intensified their moves to invest in the Kingdom and the six-nation Gulf Cooperation Council (GCC) in recent years. Saudi Arabia is the 45th biggest investor in India with investments from April 2000 to September 2012 amounting to $40.82 million, said the report. There are a number of Indo-Saudi joint ventures or Saudi owned companies in India, in diverse fields such as paper manufacture, chemicals, computer software, granite processing, industrial products and machinery, cement, metallurgical industries, etc.
Saudi companies are also looking at India as an attractive investment destination. There are opportunities for Indian businessmen and companies in sectors like construction industry, petrochemicals and health & pharmaceuticals in Saudi Arabia. Similarly, attractive opportunities are there for Saudi businessmen and companies in sectors like infrastructure and real estate in India.
In recent times, the number of Saudi businessmen and delegations visiting India has grown substantially, indicating a growing interest in emerging business opportunities in India.
Correspondingly, a large number of Indian trade and industry delegations have visited Saudi Arabia to explore the immense opportunities. These delegations received warm and enthusiastic response from the Saudi business community as stated above.
Saudi Arabia and India have established a number of institutional mechanisms also for bilateral economic cooperation. Earlier, the two countries had signed the Bilateral Investment Protection and Promotion Agreement (BIPPA) and Double Taxation Avoidance Agreement (DTAA) during the historic visit of King Abdullah to India in January 2006.
As far as exports and imports are concerned, Saudi Arabia is the largest suppliers of crude oil to India, accounting for almost one-fifth of its needs. The import of crude oil by India forms a major component of bilateral trade with Saudi Arabia. Since the 1990s, India's economic liberalization has helped bolster trade with Saudi Arabia, which annually supplies to India nearly 175 million barrels of crude oil.
Saudi Arabia is the 14th largest market in the world for Indian exports and is destination of more than 1.86 percent of India’s global exports.
Both nations are expected to expand trade and cooperation and joint ventures in telecommunications, pharmaceuticals, health services, information technology, biotechnology, agriculture, construction projects, energy and financial services. India has agreed to set up institutes of higher education and research, provide educational opportunities in India for Saudi students.
Referring to the growth in investment, the report said that progressive growth has been observed between the countries in bilateral investment after the liberalization policy of India in 1991. Indian firms have shown their complementary interest in Saudi market following new Saudi laws and processing of joint venture projects or wholly owned subsidiaries receiving a boost in the Kingdom. SAGIA has issued 426 licenses to Indian companies for joint ventures till 2010.
Several Indian companies have established collaborations with Saudi companies and are working in the Kingdom in the areas of designing, consultancy, financial services and software development.