08/12/2009
Indian Investments on the Rise
in Saudi Arabia
By Shamsul Huda
Indian companies are taking advantage of enormous investment opportunities in Saudi Arabia. This was disclosed by Mr. Rajeev Shahare, Deputy Chief of Mission of Indian Embassy in Riyadh in an exclusive interview with the Saudi Commerce & Economic Review.
He noted that the Saudi Arabian General Investment Authority (SAGIA) has so far awarded 565 licenses (including 225 industrial and 340 non-industrial) to Indian companies for establishing either joint ventures or 100% Indian owned companies in Saudi Arabia in different economic sectors. The total Indian FDI (foreign direct investment) into Saudi Arabia from 1990 till 2008 has reached SR9336.35 million including SR7830.60 million for industrial projects and SR1505.75 million for non-industrial projects.
Indian Investments in Saudi Arabia
Activities
Number of Projects
Total Investment
(Million SR)
Industrial
225
7830.60
Non-Industrial
340
1505.75
Total
565
9336.35
The Indo-Saudi bilateral economic relations are on the upswing said Mr. Shahare adding that with the privatization and diversification of the Saudi economy underway in a big way, it offers innumerable opportunities for Indian companies and investors. "India is well placed to reap benefits of these opportunities, given its expertise, especially in the major thrust areas likeconstruction, IT, steel, aluminum and manufacturing sectors. Construction industry is growingat an exponential rate after Saudi government has committed huge outlays to various construction projects; in theIT Sector, new infrastructure is being created in the Kingdom that will generate a lot of opportunities for new business entities for creative software solutions and also for hardware infrastructure and manufacturing sector, wherein, as energy costs are low in the Kingdom, cost of manufacturing steel, steel products and aluminum would be competitive for Indian companies, he noted.
Health Sector
Mr. Shahare said that another area where Indian expertise is very relevant is the health sector, where the scope is enormous and Indian companies in this sector are well positioned to build new hospitals, super-speciality hospitals and poly clinics and to offer management services. "The new thrust area, which the Indian Embassy has identified for active Indian participation is the pharmaceutical sector," he observed saying that Saudi Arabia is the largest pharmaceutical market in the Gulf region and it is growing at an estimated 18.5 % annually. The size of the Saudi market is estimated at $1.5 billion. Saudi Arabia is also the largest consumer of pharmaceuticals in the Gulf region. India has an advantage to enter this market, given its high quality products, raw materials and scientific expertise.
In addition, India is keen to participate in the traditional areas of the Saudi economy, like petrochemicals, where there are ample opportunities in downstream petrochemical projects, particularly plastics. Mining is another area, where Indian companies would be looking at opportunities keenly, given the fact that Saudi Arabia has the largest deposits of phosphates and the sector offers good scope for Indian mining companies. Establishment of large 5-star hotel chains in the Kingdom is also attractive investment ventures for Indian firms.
Indian Investment Projects
Shared Indian Projects
100% Indian Ownership Projects
Activities
No of projects
Total invest-ment
Saudi Share
Indian Share
Others Share
No. of Projects
Total Invest-ment
Indian Share
Others Share
Industrial
89
1285.9
632.03
474.46
179.49
136
6544.62
6519.93
24.69
Non-Industrial
111
1100.00
564.31
481.60
54.09
229
405.75
298.01
107.74
Total
