India and Kingdom vows to boost investments
Saudi Arabia and India have agreed to increase investments in each other's country through joint ventures in a bid to enhance economic cooperation as bilateral trade between the two countries reach $21 billion in 2009-2010.
The leaders of the two countries — Commerce and Industry Minister Anand Sharma and Saudi Arabian Minister of Commerce and Industry Abdullah Zainal Alireza — also vowed in New Delhi to exchange business delegations regularly to explore new trade and investment opportunities.
On his part, Alireza described Saudi-Indian partnership as "strategic" and "solid" and called for collaboration with the world's third-largest economy for building a knowledge-based economy in his country.
Supporting an open economic policy, Alireza said many countries in the world have succumbed to domestic pressures and resorted to protective trade measures.
"These have been fundamentally inhibiting to free trade and we should not allow the decline of international trade to propel us toward protectionism. Any precipitous short-term actions will have long-term consequences," said Alireza on the sidelines of an event organized by the Federation of Indian Chambers of Commerce and Industry.
Both countries showed interest to set up joint ventures in both countries. "India was keen to set up joint ventures for gas-based fertilizer plant in Saudi Arabia. Indian companies have evinced keen interest in setting up of such projects," Sharma said.
Both leaders also reviewed strategies to increase the trade volume in traditional items and diversify the trade basket.
While India's exports to Saudi Arabia increased to $3.91 billion in 2009-2010 from $1.81 billion in 2005-2006, its imports from Saudi Arabia increased substantially to $17.1 billion in 2009-10 from $1.63 billion in 2005-06, Sharma said.
The increase in India's trade deficit with the Kingdom has been mainly due to an increase in the prices of crude oil and petroleum products.
While India imports mainly petroleum products, organic chemicals, artificial resins and plastic material from Saudi Arabia, its exports to the Kingdom include petroleum products, basmati rice, non-ferrous metals, machinery and instruments, dyes, coal tar and chemicals.
India's imports from Saudi Arabia surged to $17.09 billion in 2009-2010 from $1.63 billion in 2005-2006 on the back of an increased demand and prices of petroleum products.
Referring to the "landmark" visit of Custodian of the Two Holy Mosques King Abdullah to India in 2006 and a return visit of the Indian prime minister to the Kingdom recently, he said that the Saudi-India strategic partnership "will overcome any challenge."