MUSCAT -- Bilateral trade between Oman and India is projected to shortly reach $2 billion, the visiting Indian Prime Minister, Dr Manmohan Singh, stated here yesterday. Addressing a forum of business leaders at the Grand Hyatt Muscat, he underlined the potential for stronger economic ties between the two friendly countries, noting in particular opportunities stemming from the Sultanate's rapid economic growth.
"I see enormous potential for a substantial strengthening of our trade and economic ties based on growing complementarities of our two countries. The Oman economy is witnessing robust growth. There are ambitious plans for investment in infrastructure, diversification of the industrial base, tourism, free trade zones and energy security. Oman is also keen to upgrade its technical and vocational skills," he said.
Total non-oil trade, which was less than $200 million in 2000, has jumped seven-fold to around $1.4 billion this year, with the figure projected to soon cross $2 billion, Dr Singh said. Investments in either country have grown over the past 2-3 years, the prime minister stated. "Our banks are functioning in each other's countries. Several large Indian companies are already located in Oman or are working in partnership with local companies in such sectors as oil and gas, mining, manufacturing, information technology and telecommunications, power and water, construction and real estate and healthcare. Similarly, Omani companies have established joint ventures in India."
Welcoming the establishment yesterday of $100 million Oman-India Investment Fund, the prime minister appealed for Omani investments in Indian infrastructure. "The Fund is the first, but long overdue, step to facilitate investments in infrastructure, tourism, health, telecom, utilities, urban infrastructure and other sectors. I would call upon captains of Oman's industry and financial companies to invest surplus liquidity into key infrastructure sectors in India. We are determined to create a hospitable climate for investment, particularly foreign investment from friendly countries like Oman."
He further added: "There is vast potential for co-operation in the energy, fertilisers, IT, tourism and education sectors. You should also actively work with your Indian counterparts to explore possibilities of joint ventures in third countries." The Indian economy, Dr Singh said, has witnessed rapid and sustained growth, averaging 9 per cent over the last four years.
"The macroeconomic fundamentals of the economy are sound. Our domestic savings rate is 35 per cent of our GDP and our investment rate is 37 per cent of our GDP. Our young demographic profile will lead to a further increase in these rates of savings and investment over the coming years. Our infrastructure financing needs are estimated to be $500 billion in the next five years. India offers a large and growing market. Despite the global economic downturn, the Indian economy is expected to maintain a growth rate of 7 to 7.5 per cent next year. Above all, there is great goodwill and affection for the people of Oman in our country," he added.
Significantly, the institutional mechanisms are already in place to support the growth of trade and economic ties, the prime minister stated. "There is a Joint Commission at the level of Commerce Ministers and a Joint Business Council representing industry from both sides. They are scheduled to hold their next meetings shortly. We have in place a Bilateral Investment Promotion and Protection Agreement and a Double Taxation Avoidance Agreement. We actively co-operate within the framework of the Gulf Co-operation Council, and an India-GCC Free Trade Agreement is under negotiation." Yesterday's forum was also attended by Khalil bin Abdullah al Khonji, Chairman of the Oman Chamber of Commerce and Industry (OCCI).
By Staff Reporter
© Oman Daily Observer 2008
