Crown Prince Salman, deputy premier and minister of defense, has met with a number of Indian businessmen including business tycoon M. A. Yusuffali in New Delhi.
The audience with the crown prince was followed by talks between Commerce and Industry Minister Tawfiq Al-Rabiah and his Indian counterpart Anand Sharma as well as several individual business meetings in New Delhi.
Yusuffali, chief of the Lulu Group, announced an ambitious plan to open 15 Lulu Hypermarkets in Saudi Arabia during the next two years following his meeting with Crown Prince Salman and other senior Saudi officials.
Besides the Lulu’s plans to open 42 new hypermarkets in the Middle East including 15 in Saudi Arabia, four other major agreements involving Saudi and Indian companies were signed on the sidelines of the visit.
The issue of taxation of capital gains, meanwhile, figured prominently at the India-Saudi Business Forum organized jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Council of Saudi Chambers in New Delhi.
Referring to the new business deals signed by the Saudi and Indian companies, a statement from the FICCI said chairmen of Al-Qahtani Group Sheikh Abdul Aziz Al-Qahtani and Indian firm SledgeHammer Oil Tools Pradeep Mohanty signed a joint venture agreement for setting up a plant for oil drilling products in Saudi Arabia.
On the other hand, Yusuf bin Ahmed Kanoo Company and India’s Seaworld Shipping and Logistics signed a joint venture to establish a joint logistic and shipping network.
The third agreement was signed by the KRBL Limited of India and Omar Ali Balsharaf Est to supply 165,000 tons of Basmati rice to the Kingdom, while Al Rabiah & Partners and India’s Novatech had signed deal for engineering, procurement and construction (EPC) business and supply of industrial equipments to the Saudi firm.
Several other Indian and Saudi companies evinced keen interest to set up joint-ventures in other sectors on the sidelines of the visit.
Referring to the capital gains tax, which is a major hurdle in promoting Saudi investments in Commerce and Industry Minister Tawfiq Al-Rabiah said: “The issue of taxation of capital gains continues to be a major impediment in promoting Saudi investment in India, and I call on the Indian authorities to explore relaxation of this issue.”
He added: “I would also like to emphasize on the importance of the activation of the Saudi Indian Joint Fund.”
Anand Sharma, Indian minister of commerce and industry, who held talks with Al-Rabiah, commented: “India and Saudi Arabia have also agreed to work toward deeper economic engagement including through more investments, joint ventures and technology transfers.”
Both the ministers stressed on the need to transform the buyer-seller relationship, into one of deeper energy partnership with investments in petrochemical complexes, modernization of refineries, and joint ventures.
Both the ministers stressed the need to ink a free trade agreement between the Gulf Cooperation Council (GCC) countries and India for boosting trade and commercial ties.
The GCC and India have identified sectors like petroleum and oil, gas and fertilizers and information technology among other to be given focus. Sharma highlighted the need to diversify India’s export to Saudi Arabia.
The Saudi side also raised the issue of anti-dumping duty imposed on various items of their industry is detrimental for the trade relation between the two countries.
The Indian side explained that the anti-dumping duties in India are imposed after due diligence and is a quasi judicial exercise.
Sharma said India had withdrawn anti-dumping duties from two items i.e. polypropylene and pentaerythritol.
Sharma also invited Saudi investors to actively participate in the construction projects for highways, ports, airports, metros, supply chains and warehousing and power plants in India. Saudi Arabia and India have forged closer ties in trade.
In fact, the trade has grown significantly to exceed $43 billion in 2012-13.
There is need to diversify trade relations to non-oil trade sectors. Sharma said Indian globally-reputed companies, with expertise in infrastructure development are keen to work in upcoming projects in Saudi Arabia.