India, Gulf ties now look beyond oil and gas

April 28th, 2008 - 3:25 pm ICT by admin  

A file-photo of Manmohan Singh
By Aroonim Bhuyan
Dubai, April 28 (IANS) Energy is not the sole area driving India’s ties with the Gulf countries - trade and investment relations are also set to multiply, seeing the response of two high-level visits from India to the region in the last fortnight. From free trade agreement being negotiated with the six Gulf Cooperation Council (GCC) countries to easier visas for their corporate chiefs, the two sides have begun to recognise that their bilateral potential remains to be fully tapped.

If Indian External Affairs Minister Pranab Mukherjee’s visit to Saudi Arabia got assurances that business leaders of the two sides will get multiple-entry visas fast, Commerce Minister Kamal Nath’s meetings here got entrepreneurs interested in India’s infrastructure that needs $500 billion over the next few years.

“I requested that the relationship be transformed from buyer-seller level,” said Mukherjee after meeting Saudi King Abdullah Bin Abdul Aziz, in what was clearly a paradigm shift in New Delhi’s thinking even in energy ties with the oil-rich Gulf nations.

“We want to participate in exploration and exploitation and development of gas-based and petrochemicals-based industry in Saudi Arabia,” Mukherjee said during what has been hailed as the highest-level visit from the Indian side to Saudi Arabia since King Abdullah’s historic visit to India in January 2006.

The focus of this partnership had been stressed in the Delhi Declaration signed by King Abdullah and Indian Prime Minister Manmohan Singh two years ago, where they agreed to build on strategic ties based on their respective strengths.

The highlights of the declaration include cooperative joint ventures in upstream and downstream oil sectors, both in their respective countries and outside third countries and Indo-Saudi gas-based fertilizer ventures in Saudi Arabia.

The idea was to take the ties to greater heights that has seen India emerging as the fifth largest trading partner of Saudi Arabia with bilateral trade of $3.67 billion in 2006-07, and the Gulf country becoming the 12th largest market for India, accounting for 2.05 percent of its exports.

“Our economy is growing at over eight percent and we require huge investments. Our infrastructure sector particularly can absorb $500-600 billion more,” said Mukherjee, seeking to take the growing ties beyond India’ quest for energy.

When Kamal Nath visited the UAE, he picked up from where Mukherjee left off and even sought to take the level of engagement to another scale - he not only spoke of the specific projects in infrastructure but also on the free trade pact.

“UAE investors are very keen on the Indian market,” he told reporters here after meetings with Vice President and Prime Minister of UAE and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum.

“We would like to have them investing in infrastructure,” said Kamal Nath, who also met UAE’ Minister for Economy Sultan Bin Saeed Al Mansouri. “We would like to draw investments, particularly in the Delhi-Mumbai Industrial Corridor.”

Stating that $92 billion was proposed for the corridor, the Kamal Nath said it would include six mega investment regions of 200 sq km each, in Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra.

He also gave his personal assurance on the free trade pact with the GCC nations - comprising UAE, Saudi Arabia, Kuwait, Oman, Bahrain and Qatar. “We will push this forward. We expect to make substantial progress this year.”

The UAE side was equally enthused. “We currently maintain very healthy relations with India,” Al Mansouri said in a statement after Nath’s visit, while giving a rundown on the quantum of bilateral trade between the two sides.

“Bilateral trade between our countries, excluding India’s crude oil imports, is currently at 69.78 billion dirhams ($19 billion) and is expected to grow further by 30 percent in 2010,” said the Saudi minister.

“Both our countries are witnessing rapid economic growth - so forming a strong partnership to leverage our unique strengths will help us attain our mutual goal of sustainable development.”

In fact, some Indian industry chambers like the Associated Chambers of Commerce and Industry (Assocham) feel India’s total trade with the GCC countries that is estimated at $28 billion during 2007-08, could top $40 billion by 2010.

The feel that the GCC - already the third largest trade partner for India after European Union and the US - has the potential to attract more exports from India after the free trade agreement.

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