Saudi Arabia has made it clear on Sunday,13th December 2020 that its investment plans in India have not gone out of track and expressed confidence saying Indian economy has all the potential to bounce back from the adverse effects of the deadly coronavirus pandemic and will attract increased FDI inflow and new company-registration-in-India.
In February 2019, an investment of more than USD 100 billion in various sectors including petrochemicals, refining, infrastructure, mining and manufacturing, agriculture, etc. was announced by the Kingdom’s crown prince, Mohammed bin Salman. Recently, Saudi Ambassador Dr Saud bin Mohammed Al Sati reaffirmed Riyadh’s plan of 100 billion dollar investment in India.
“Our plans to invest in India are on track and we are in discussion to prioritize investment opportunities in several sectors in both countries,” Ambassador Dr Al Sati remarked.
He added that the Indian economic revival will help support other nations. He also praised the Indian government’s proactive measures and economic relief package, saying, “The economic relief package provided by India for its most prominent sectors is commendable. As the fifth-largest global economy and the largest economy in South Asia, the Indian economy has the impetus to recover from the impact of the ongoing pandemic”.
“The Strategic (Partnership) Council set up by two countries in 2019 has opened new avenues on partnership in strategic areas like defence, security and counter-terrorism, and renewable energy”, Dr Al Sati noted.
Saudi Public Investment Fund (PIF) had planned for an investment of $1.3 billion in Reliance Retail and $1.5 billion in Jio. He also added that the Saudi Aramco, the state-owned petroleum and natural gas company, is upbeat about India’s energy sector and also has investment plans. He also noted that the recent Labor Reform Initiative (LRI) will further reinforce economic ties between the two countries and facilitate setting–up–a–company–in–India.
The government fund acquired a 2.04 per cent stake in Reliance Retail venture, an ecommerce business running more than 12,000 stores across different cities in India.
As per Ambassador Saud Al-Sati, Saudi Arabia values India as a strategic partner and close friend. Ambassador Al-Sati remarked both countries are cooperating to create and strengthen partnerships in the defence and security sphere by training, knowledge sharing and fighting against terrorism.
“The Strategic Partnership Council set up by the two countries in 2019 has opened new avenues on partnership in strategic areas like defence, security counter-terrorism, energy security and renewable energy,” he added.
He also said the economic recovery of both countries will help promote the economic growth of other countries in the region.
“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” the fund said.
This latest expansion in India follows an earlier acquisition of a 2.32 per cent stake in Jio Platforms, the digital services unit of Reliance Industries.
The Reliance business group of India has interests in oil, petrochemicals and telecoms, and is controlled by Indian billionaire Mukesh Ambani who is leading the Reliance group in making huge investments now in the booming technology sector.
India’s retail industry tops the global list and accounts for an approximate 10 per cent of the country’s gross domestic product, however, the sector has been badly impacted by the covid pandemic and in turn, adversely affected the wider economy too.
“This investment further demonstrates PIF’s commitment to generating returns for the Saudi people and driving the economic diversification of Saudi Arabia,” highlighted the fund’s Gov. Yasir Al-Rumayyan.
With a belief that investment flows in both directions, the Saudi Investment Ministry announced granting of investor licenses to 306 international companies in the Kingdom during the third quarter of 2020, an increase of 96 per cent license issuance over the previous quarter.
Investment Minister Khalid Al-Falih remarked that the latest figures suggesting a phenomenal increase in investor license issuance show that the Kingdom can retain the long-term trust and confidence of the global investor community, and is steadily moving towards “steady and positive” economic recovery.
Analysis of the investors’ data reveals that India topped the list of foreign companies who were granted licenses in the KSA, followed by Egypt and the UK.
The business sectors with the highest number of new investors have been primarily in services sectors including education, financial services and housing and followed by the manufacturing industry and transport and logistics business.
