India and Saudi Arabia have agreed to enhance bilateral cooperation, knowledge exchange and business ties reflecting the desire of both countries to deepen and widen their age-old ties, an official said on Friday.
The India-Saudi Arabia Joint Commission, that concluded its eleventh meeting here on Thursday, focused on enhancing bilateral cooperation, knowledge exchange and business ties between both nations, the finance ministry said in a statement.
As many as 22 Indian ministries were represented at the talks, the statement said, reflecting both countries desire to both deepen and widen their age-old ties.
The agenda of the current joint commission covers an array of sectors that range from trade, investment, media, culture, agriculture and tourism to finance, health, industry, technology and skill development.
The Indian delegation was led by Finance Minister Arun Jaitley while the Saudi side was led by the country's Commerce and Industry Minister Tawfiq Bin Fawzan Al Rabiah.
The two sides agreed to continue discussions on setting up a joint investment fund, including the Saudi request to consider a favourable tax treatment for such a fund.
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This was among the many issues agreed on at the end of the joint commission meeting on Thursday in the context of major changes in the movement of international crude oil prices in the past year shaped largely by actions of the oil-rich kingdom.
Outlining the significant structural changes being planned in India towards opening up the economy and inviting foreign investment, particularly in infrastructure, Jaitley said: "Our bilateral trade of $48 billion was in slight decline last year for the obvious reason of falling oil prices.
"There is, therefore, a need to expand the relationship in the non-oil sectors," he added.
The directors of 14 different government departments from Saudi Arabia are part of the delegation reflecting the wide-ranging engagement with the kingdom, which is otherwise the largest source of crude oil for India, accounting for one-fifths of the country's need.
In his address, Saudi Commerce Minister Al Rabiah said the bilateral trade figures were modest compared to their potential to increase significantly.
"The 11th session is an opportunity to lay the foundation for closer cooperation," he said.
"The Saudi-Indian joint ventures in Saudi Arabia have reached the figure of 231, for a total capital investment of $630 million," the Saudi minister added.
He recalled the signing of the Riyadh Declaration in 2010 during the then prime minister Manmohan Singh's visit to Riyadh, that raised the level of interaction to a strategic partnership involving the political, economy, security and defence areas.
As per data available with India's external affairs ministry, Saudi Arabia is the fourth largest market for Indian merchandise, while for Saudi Arabia India is the fifth largest market for its exports. Annual bilateral trade stands at nearly $50 billion. In terms of imports, India ranks seventh and was the source of around 3.5 percent of Saudi Arabia's total imports in 2013.
Besides being a major trade partner, India sees Saudi Arabia as a major pillar for its energy security and an important economic partner for investments, joint ventures, transfer of technology projects. Both countries have been quietly doing a lot of intelligence sharing and security cooperation on the anti-terror front.
There are nearly 80 major Indian companies operating in the kingdom, including Larsen & Toubro, Tata Consultancy Services, Tata Motors, Wipro, Dayim PunjLloyd, Shapoorji Pallonji, Infosys, Air India and State Bank of India, among other. Since mid-2000, a number of Indian firms have taken advantage of the new Saudi laws and established joint venture projects or wholly-owned subsidiaries in the Kingdom.
Saudi Arabia is also home to over three millions Indians, including a growing number of professionals, and is one of the largest Indian diaspora in the world.