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Saudi Commerce Minister upbeat on Indian investment in Saudi Arabia
In a yet another demonstration of the confidence reposed by Indian industry on the safety and profitability of investing in Saudi Arabia, Tata Motors is exploring the possibility of building their third largest manufacturing plant for Land Rover vehicles in Eastern Province of the kingdom.

This was announced in New Delhi by Dr. Tawfig Al Rabiah, Saudi Minister for Commerce and Industry, while addressing the India-Saudi Arabia Business Forum, organized by FICCI and the Council of Saudi Chambers on Thursday.

Dr. Al Rabiah informed that recently another Indian company, L&T has been awarded to be part of the Riyadh Metro project. Tata Steel won an order in last year to supply high-quality rails for a new high speed rail line linking the two holy cities of Makkah and Al Madinah. Tata Consultancy Services (TCS) announced the launch of its "all female services center" in Riyadh in collaboration with General Electric, and Saudi Aramco.

Indicating the intensity of two-way investments, the Saudi Minister said, on its part, SABIC, Saudi Basic Industries Corporation, one of the world's leading manufacturers of chemicals, fertilizers, plastics and metals, has recently set up its technical center in Bangalore with an investment of over USD 100 million.

"We are aware that a series of steps are being undertaken to attract Saudi investment into India. However, 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. I would like also to emphasize on the importance of the activation of the Saudi Indian Joint Fund," Dr Al Rabiah said.

The bilateral investment between the two countries is growing steadily. Since mid-2000, a number of Indian firms have taken advantage of the attractive new Saudi laws and established joint venture projects or wholly-owned subsidiaries in the Kingdom.

Accordingly, some 426 licenses were issued to Indian companies for joint ventures or 100% owned entities, bringing total investments worth USD 1.6 billion into Saudi Arabia. These licenses are for projects in diverse sectors such as management and consultancy services, construction projects, telecommunications, Information Technology, pharmaceuticals, etc. Moreover, several Indian companies have established collaborations with Saudi companies and are working in the Kingdom in diverse sectors like engineering, consultancy, financial services and software development.

Dr. Mohammed Al-Jasser, Saudi Minister of Economy & Planning, in his address, invited Indian investment in Saudi Arabia' mining sector which has remained relatively undeveloped. There are immense prospects for investments in phosphate and bauxite mining.

He said the Saudi Arabian Government was committed to developing world class rail-road network and logistics for transportation of materials to seaports and factories and this should be of attraction to Indian investors.

Sidharth Birla, President of FICCI, pointed out that India today has a new National Manufacturing Policy which aims to increase share of manufacturing in our GDP from 16 per cent to 25 per cent by 2022. "There is a blue-print for expansion of manufacturing with emphasis on exports. Saudi Arabia, we feel, can be an effective partner for this vision and India can be a very attractive location for Saudi Arabia to export from."

On the occasion, four MoUs were signed, namely, between Sheikh Abdul Aziz Al-Qahtani, Chairman Al-Qahtani Group and Pradeep Mohanty, CMD, SledgeHammer Oil Tools (P) Ltd India for a Joint Venture agreement in Saudi Arabia to establish a Local Manufacturing Facility for Oil Drilling Products; Ali Abdulla Kanoo, Regional Director, Saudi Arabia, Yusuf Bin Ahmed Kanoo Co. Ltd and Mr Vaishnav Puri, Managing Director, Seaworld Shiping & Logistics Private Limited for a Joint Venture agreement to establish a Joint Logistic & Shipping Network; Abdullah Ali Balsharaf, Vice Chairman, Omar Ali Balsharaf Est and Anil K. Mittal, Chairman & Managing Director, KRBL Limited for Joint Venture agreement to supply 165000 tonnes of Basmati Rice and Dr. Abdulrahman Al Rabiah, President, Al Rabiah & Partners and Mr Soumadeep Ghosh, Director, NOVATECH for a Joint Venture agreement for EPC business and supply of industrial equipments to Al Rabiah & Partners.

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