India and Saudi Arabia on February 27 sought to further deepen strategic diplomatic and business relations as the oil-rich Gulf kingdom’s Crown Prince Salman bin Abdulaziz Al Saud met India’s top leadership, including President Pranab Mukherjee and Prime Minister Manmohan Singh.
During the meeting with the prime minister, the two leaders “discussed trade, investment, terrorism and security situation in West Asia and Afghanistan”.
“India has a special and warm relationship with Saudi Arabia which we accord high importance,” Manmohan Singh told the visiting leader.
Prince Salman, who is also deputy prime minister and defence minister of Saudi Arabia, is on a three-day official visit to India. This is Prince Salman’s first visit to New Delhi as crown price of the Gulf kingdom, that supplies nearly one-fifth of oil needs of the Asia’s third largest economy.
“The Prime Minister held a special lunch for the visiting dignitary. He also thanked him for the facilities extended to Indian Hajj pilgrims,” a source told IANS.
Welcoming the Crown Prince, who called on him at the Rashtrapati Bhavan here, the president said: “Relations between India and Saudi Arabia will be greatly strengthened by this visit.”
“India cherishes its cordial and friendly relations with Saudi Arabia, which are deep-rooted in history and based on the foundation of close people-to-people contacts,” he added.
The two countries on February 26 signed a memorandum of understanding (MoU) on defence cooperation for greater exchange of information and training. The president said the MoU “would help defence personnel of the two countries to work closely and learn from the experiences of each other as both the countries are vulnerable to the menace of terrorism”.
Meanwhile, Indian and Saudi companies signed four agreements to jointly promote and facilitate investments and trade.
The representatives of Indian and Saudi companies signed the memorandums of understanding at India-Saudi Arabia Business Forum meeting here organised jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Council of Saudi Chambers.
Saudi Arabia Commerce and Industry Minister Tawfig Fawzan Alrabiah, who is a part of the high-level delegation accompanying the crown prince, emphasised on the need for further strengthening trade and investment ties.
Urging Indian authorities to explore possibilities of easing the regulation, the minister said Saudi investors are concerned about capital gains and other taxation issues in India.
“The issue of taxation of capital gains continues to be major impediment in promoting Saudi investment in India, and I call on the Indian authorities to explore relaxation of this issue,” Alrabiah said.
The Minister pointed out that the two countries have taken a number of steps to promote bilateral investments, but taxation issue remain one of the major hurdles. “We are aware that a series of steps are being undertaken to attract
Saudi investment into India.”
Commerce and Industry Minister Anand Sharma during a meeting with his Saudi counterpart sought the kingdom’s support for early conclusion of the free trade agreement with the six nation Gulf Cooperation Council (GCC) countries.
Alrabiah said several Indian companies have shown interests to expand operations in Saudi Arabia.
BIMSTEC important for the march of Asia: Manmohan Singh
Prime Minister Manmohan Singh, who left on a two-day visit to Nay Pyi Taw, the capital of Myanmar, to take part in the third summit of the BIMSTEC, said peace, stability and development of countries of this sub-regional grouping, with over 20 percent of the world’s population and over $2.5 trillion worth of GDP, was indispensable for the march of Asia.
The last summit of the BIMSTEC or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation group comprising Bangladesh, India, Myanmar, Sri Lanka, Thailand, Nepal and Bhutan was held in New Delhi in 2008.
“BIMSTEC lies at the crossroads between SAARC and ASEAN, drawing its energy from the natural convergence of the countries around the Bay of Bengal. Connectivity and sub-regional cooperation in trade and investment, energy, climate, tourism, agriculture and other areas provide the spark for the growth engine in our region,” the Prime Minister said in a departure statement.
“Security challenges, both natural and man-made, require our collective vision and determination to be overcome”. Peace, stability and development in BIMSTEC countries, with over 20 percent of the world’s population and over $2.5 trillion worth of GDP, is indispensable for the forward march of Asia as a
whole.
“BIMSTEC has evolved and matured further as a group since the last Summit in New Delhi in 2008. With the impending establishment of a permanent secretariat in Dhaka and appointment of a secretary general, it is poised to play a more active role in regional integration and cooperation,” the prime minister added.
Several BIMSTEC Centres are being launched throughout the region, including three in India, to foster greater technical exchanges between member countries. In the security sphere, we have steadily put in place enabling legal instruments for regional approaches to international terrorism, transnational crime, drug trafficking and mutual legal assistance in criminal matters, the need for which is more salient in today’s integrated world than ever before, he said.
“We set great store by BIMSTEC cooperation in the years ahead, for which this summit should play a critical role,” Manmohan Singh emphasised.
He said he also hoped to have meetings with leaders from other member states, all close and friendly neighbours of India, on bilateral relations.
India huge opportunity for eBay, leads $133 mn Snapdeal investment
Aimed at tapping the “huge opportunity” in Indian e-commerce space, eBay is leading a USD 133.77 million (about Rs 830 crore) investment in online market place Snapdeal.
The US-based firm led a group of investors including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital to invest in the New Delhi-based Snapdeal.
Last year in April, Snapdeal had raised USD 50 million from eBay-led group of investors. After this round of funding, the total investments raised so far by the homegrown online marketplace rose to over USD 235 million (about Rs 2,457 crore).
“We are excited to grow eBay India under a great management team and to invest in the complimentary Marketplace Snapdeal. India is a huge opportunity,” eBay President Marketplaces Devin Wenig said in a Twitter post.
“Multiple brands working together improves overall chance of success. We’ve done same successfully in other markets,” he added.
Growing wealth, acceptance of technology and smart phone penetration will help the e-commerce market in the world’s second most populous country, Wenig said.
“India market growth will accelerate, helped by improvements in payments, delivery, and smart phone penetration. Growing wealth, high acceptance of technology, commerce arbitrage and other factors driving exceptional growth rates in Indian digital commerce,” he added.
Meanwhile, late yesterday night, both eBay and Snapdeal in separate statements said eBay was leading a new USD 133.77 million round of funding in Snapdeal, raising its stake in the company following an initial investment made in 2013.
Accelerating growth in India and other emerging markets continues to be a core strategy for driving eBay’s global ecommerce leadership, eBay Senior VP and APAC Managing Director Jay Lee said. “We continue to invest in Snapdeal due to its complementary business model, good management team and strong brand,” he added.
Commenting on the deal, Snapdeal co-founder and CEO Kunal Bahl said: “All our current institutional investors including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital have participated in this round as well which is a strong endorsement of our team.”
Source: Press Trust of India.
>> TRADE NEWS
Belgium looking to explore business options with south India: Ambassador
With a new Consul General being set up in Chennai, Belgium is now looking to expand its economic ties with South India.
At present, the main area where there is collaboration is in the diamond trade with Gujarat and Surat, but there are a number of areas in which India and Belgium can explore common economic interests, Ambassador of Belgium to India Pierre Vaesen told The Hindu during his visit to Puducherry.
Now, Belgium is looking to strengthen their ties with South India in areas like clean energy, health care – including medical equipment and pharmaceuticals and logistics, he said.
Mr. Vaesen was in Puducherry to confer the title of ‘Officier de la Couronne’ on the founder of Volontariat, Madeleine de Blic. Ms. De Blic hails from Belgium and settled in Puducherry over 50 years ago. Volontariat India was created in 1962 to help children, people suffering from leprosy and other underprivileged people.
This title is given to very few people around the world, and in India this year, Ms. De Blic is one of two people to be conferred the title, he said.
“Even though her social work is based out of Puducherry, the people of Belgium have indirectly benefited from the work she has done here,” he said.
Since its founding, Volontariat has grown with a number of new projects, including an orphanage and vocational training centres for the underprivileged and an old age home. Ms. De Blic was awarded the title of Chevalier de la L gion d’Honneur for her work in 2013.
India plans rice hub in Dubai with Saudi Arabia TRADE NEWS
SECTORAL NEWS
A new Saudi Arabia and India joint venture has been formed to build a rice distribution hub in Dubai to link Indian production to consumers in West Asia, according to a media report.
Prince Mishaal bin Abdullah bin Turki and global private investor V Raman Kumar have formed the joint venture with India’s rice producer, LEAF India (Lakshmi Energy and Foods), to create West Asia and North Africa region’s largest hub for rice storage and distribution, Arab News said.
The venture, Innovo Specialty Foods JLT, created by an investment of about $27 million, aims to set up a storage, processing, polishing and packaging facility with a capacity of over 100,000 tonnes of Basmati rice during 2014, it said.
“Our concept idea of creating this rice hub will aim to contribute and deliver food security objectives in the UAE,” Kumar was quoted as saying by the paper.
“Food security is clearly an immediate priority for the UAE and wider West Asia. The region is entering a new period of economic growth underpinned by a burgeoning population with a high dependence on imported food.
“Currently, 20% of all UAE imports comprise food items and 90% of food is imported but there are only 3 months of basic food items stored, so food security cover is not fit for the rapidly growing economy,” he said.
Kumar said the 100,000 tonnes of Basmati rice capacity that will be created in Jebel Ali, UAE, will be a giant step for this region to strengthen its food security strategy. “We look to take this strategy to Saudi Arabia as well in the near future. We believe that execution of a core food security strategy is essential to provide a sustainable growth platform,” he said.
EWS ROUND-UP
Indian economy grows 4.7% in third quarter
India’s Gross Domestic Product (GDP) grew at 4.7 per cent during October-December 2013.
“Corporate investments and savings have been the prime drivers of productivity and growth in the economy. It’s now clear that going back to 8-percent growth will need a whole lot serious structural policy reforms,” a Former Chief Economic Advisor to the Union Finance Minister Arvind Virmani told The Hindu. The Reserve Bank’s continuing anti-inflation stance has not allowed it to lower borrowing costs, which has in turn kept the private sector’s appetite subdued for investments and expansions. In fact, it hiked interest rates three times between September and January.
Official data released on February 28 estimated GDP growth at 4.7 percent for October-December 2013. The previous two quarters had grown respectively at 4.4 percent and 4.8 percent.
The sectors which registered significant growth during the quarter ended December 2013 are financing, insurance, real estate and business services (12.5 percent) and community, social and personal services (7.0 percent). Agriculture,
forestry and fishing grew at 3.6 per cent. The growth rate in construction is estimated at 0.6 percent, according to the data released.
“With 4.4%, 4.8% and now 4.7% being the GDP growth for the last three quarters, it is needless to say that the economic situation is of great concern. A weak investment demand is the biggest problem that needs addressing,” Confederation of Indian Industry Director General Chandrajit Banerjee said in a statement. With the country heading for general elections, it is not expected that key economic legislations would get transacted, he added.
Chairman of the Prime Minister Manmohan Singh’s Economic Advisory Council C Rangarajan had said, “Third quarter GDP figure could be more than 5 per cent”. With the estimate coming out lower than the expectation, it is likely that the official projection of 4.9 percent for the whole year 2013-14 may not be met.
DISCLAIMER
This newsletter is compilation of news articles from various business-e-newspapers and in no way is an endorsement or reflection of Embassy of India, Berne views.
