India has proposed to explore the rich rock phosphate deposits in Syria to meet its needs for phosphate fertilizers. Syria has large reserves of rock phosphates which can be exploited for production of di-amonium phosphates (DAP) used as a fertilizer in agriculture.

A joint Syria-India Business Council is likely to step up soon for identifying areas of investment cooperation between the two countries. The forum will include at least 20 representatives from the industry on each side and suggest to the governments of both the countries.

India and Syria also signed a revised Double Taxation Avoidance Agreement (DTAA)

The visiting Syrian president, Bashar Al Assad Who Assad is leading a strong business delegation consisting of representatives from manufacturing, medical industry, cosmetics and healthcare, computer equipment, electrical appliances and cables, hotels-pipeline industry, food and agro processing sectors has called for bilateral trade and investment cooperation.

Speaking at an interaction with the Indian industry on Wednesday Assad said : “I invite you to explore opportunities for joint ventures and other collaboration in major areas, including infrastructure development, energy production and mineral processing as well as IT education and training opportunities.” The interaction was jointly organized by three apex India industry bodies ? CII, FICCI and Assocham. Assad is leading a strong business delegation consisting of representatives from manufacturing, food processing, olive oil sectors.

The former director-general of Fertiliser Association of India (FAI), Pratap Narain, who is now the chairman emeritus of Sun International Ltd, said : “it is a good opportunity for Indian industry to enter into joint ventures for production of DAP in Syria. We produced only 2.7 million tonne DAP against our annual needs of 7.5 million tonne. This is because there is no adequate rock phosphate in the country. It would be better if we enter into joint ventures in countries like Syria which have rich deposits of rock phosphates.”

China is one of the major exporter of DAP to India and with a view to discourage export of this fertilizer it has recently imposed an export tax of 135%. The global price of DAP is now averaging around $ 1350 a tonne.

India has a sound base for production of urea (nitrogen) fertilizer and produces about 20 million tonne and imports about 7 million tonne to meet its annual needs. Global urea price is ranging around $ 800 a tonne. India imports total needs of 4.2 million tonne MoP as it is not produced in the country. MoP price is around $ 625 a tonne.

The president of the Federation of Syrian Chambers of Commerce, Rafeb Shallah invited Indian participation for development of roads and infrastructure in Syria. He said that development cooperation between the two countries was more important and bilateral trade can follow as a byproduct of such a cooperation.

Indian public sector, Oil and Natural Gas Commission is already engaged in oil and gas exploration in Syria. The Indian minister of state for external affairs, E Ahamed informed that in January, this year India and Syria signed an agreement for cooperation in mineral exploration, infrastructure, railways, roadways, ports, power generation and IT sector.

India and Syria also signed a revised Double Taxation Avoidance Agreement (DTAA) on Wednesday for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income. The agreement was signed by the Indian minister for external affairs, Pranab Mukherjee and by Syrian minister for economy and trade, Amer Husni Lutfi.

This agreement has revised an earlier one notified on June 25,1985 and will cover all taxes imposed on total income or on elements of income, including taxes on gains from alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises. The DTAA provides that business profits may be taxed in the source state if the activities of an enterprise constitute a permanent establishment in the source state.

Permanent establishment includes especially – a branch, factory, place of management, sales outlet. Profits of a building site, construction, assembly or installation projects may be taxed in the state of source if the site, project or activities continue in that state for 270 days or more. Profits from the furnishing of services including consultancy services may also be taxed in the state of source if activities of this nature continue within that state for more than a period of 183 days within any 12-month period.

Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise. The agreement provides for a maximum rate of tax to be charged in the country of source on dividends at 5 % of the gross amount of dividends if the beneficial owner of the dividends is a company which holds at least 10% of the share capital of the company paying the dividends and 10% of the gross amount of dividends in all other cases.

The Agreement further provides for maximum rate of taxation in the source state at 10% in the case of interest and royalties. Capital gains from the sale of shares may be taxed in the country of source. Besides, the Agreement incorporates provisions for exchange of information between tax authorities of the two countries and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.

The revised DTAA incorporates improvements over the existing DTAA by including anti-abuse provisions and providing for source based taxation of capital gains from alienation of shares. This agreement will provide further impetus to the economic ties between India and Syria by facilitating mutual economic cooperation as well as stimulating the flow of investment, technology and services between the two countries.