|19 February, 2019

India looks to Saudi Arabia's crown prince for historic $1bln pledge

Saudi crown prince to announce major backing for Indian investment fund to modernize railways and highways

Saudi Crown Prince Mohammed bin Salman attends the investment conference in Riyadh, Saudi Arabia October 23, 2018.

Saudi Crown Prince Mohammed bin Salman attends the investment conference in Riyadh, Saudi Arabia October 23, 2018.


NEW DELHI: Saudi Arabia’s Crown Prince Mohammed bin Salman is expected to announce a $1 billion investment in India’s infrastructure and farming sectors during his first visit to the South Asian nation, experts said.

The crown prince was invited by Prime Minister Narendra Modi and is expected in New Delhi on Tuesday after visiting Pakistan. He will be accompanied by leading Saudi businessmen. 

India is hoping the crown prince will announce an investment in its National Investment Infrastructure Fund (NIIF), a sovereign wealth fund that includes private companies and foreign investors. The fund focuses on upgrading India’s infrastructure, including railways and highways.

“We can expect a commitment of around $1 billion,” said Dr. Muddassir Quamar, an associate fellow at the Institute for Defense Studies and Analyzes, a New Delhi-based think tank.

India and Saudi Arabia have traditionally had friendly relations which Modi has sought to strengthen in recent years in a bid to improve ties with major Muslim nations. Observers say the aim is to deny an advantage to neighboring Pakistan, which has close links with Gulf countries. 

The Kingdom is India’s top energy supplier and home to more than 3.5 million Indian expatriates. Much of bilateral trade between New Delhi and Riyadh has been based on energy, but both countries are now seeking to broaden ties. 

Earlier this week, the Saudi Press Agency said the Kingdom was considering an investment deal in NIIF. Meanwhile, India announced that its Cabinet had approved an agreement between the two countries on investment in infrastructure.

However, Talmiz Ahmad, a former Indian ambassador to Saudi Arabia, said it is up to New Delhi to take advantage of the opportunity and make sure it gets the investment.

“There is plenty of room for investment in infrastructure, but the perception across the region is that India is not business friendly,” Ahmad said. “We need to improve things like acquisition of land, the tax regime and to speed up approvals.”

Apart from investments in energy, India also expects to see deals in agriculture. 

India already exports cereals and agricultural products to the Kingdom, and can be an additional source of Saudi food security, Quamar said. 

The crown prince’s visit comes at a time of heightened tensions between India and Pakistan after a car bomb killed 44 paramilitary personnel in the disputed Kashmir valley. Islamabad has denied India’s claim that it was involved in the attack. 

Observers said that since Riyadh is a staunch Pakistan ally, the latest domestic dispute might limit the success of the visit.

However, Saudi Arabia has condemned the attack, the worst in decades of turmoil in the disputed region. 

“We talk a lot about promoting joint ventures,” said Ahmad. “But none of them has any meaning if the region is mired in terrorism. The crown prince has to address the question of violence and terrorism.”

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