The country's largest lender State Bank of India (SBI) and the sovereign wealth fund of Oman today set up a fund with an initial corpus of $100 million (about Rs 450 crore) to pick up equity in Indian projects.
The agreement to establish the fund was inked by SBI Chairman O P Bhatt and State General Reserve Fund (SGRF) CEO Warith Al-Kharusi and it will be expanded to $1.5 billion (about Rs 6,750 crore) in due course.
Oman Minister of National Economy Ahmed Macki said the fund will start immediately.
The initial corpus will be contributed equally by SBI and SGRF and both sides will manage the fund jointly.
On the occasion, Finance Minister Pranab Mukherjee said the agreement would be a landmark and will open new vistas in economic relations between India and Oman.
According to the agreement, the fund will explore opportunities in all sectors, even as Planning Commission Deputy Chairman Montek Singh Ahluwalia said India would like to see investment in infrastructure.
On use of the fund, Ahluwalia said, "That depends on the fund managers (SBI and SGRF)... We would of course like to invest in things like infrastructure, but it is not constrained to do so."
Ahluwalia also said India and Oman are looking at several other areas of collaboration, like in the IT, food, health and hotel sectors.
"There are several other areas that we are looking at -- collaboration in IT and food areas. Oman is very keen to do that collaboration in the interest of their own food security. Collaboration in building of hotels, in health facilities... Indians creating health facilities in Oman and education," he said.
He said a report is being prepared on all these areas and is likely to be submitted to the two governments next month.
The two sides had reached an understanding for setting up the fund during the visit of Prime Minister Manmohan Singh to Oman in November, 2008.
The Sultanate of Oman is keen to diversify its oil and gas industry-based economy to a modern industrialised economy and for this purpose, the country needs investment in manufacturing, tourism, warehousing and other allied industries.
