Oman to help India in infrastructure projects

Written by ASHOK B SHARMA | New Delhi | Updated: Oct 23 2010, 19:44pm hrs
The $ 100 million India-Oman Joint Investment Fund would be raised to $ 1.5 billion and would be deployed for infrastructure projects in India, according to the visiting foreign minister of Oman, Yusuf bin Alawi bin Abdullah.

India would be invited by the GCC countries in discussions about security issues for the Gulf region. Also Iran, Iraq, Pakistan, US, EU countries, China and Russia would also be invited.

We cannot secure that important area of supplying energy to the world without collective efforts to maintain security and peace in the region, he said in a joint press conference with the Indian minister for external affairs, SM Krishna in New Delhi on Wednesday.

During The last visit of the Indian Prime Minister Manmohan Singh to Oman in November 2008 a MoU for setting up of a India-Oman Joint Investment Fund was concluded. The fund would have a seed capital of $ 100 million and the amount can be raised to $1.5 billion as per requirement. Detailed documents have already been signed in the presence of the Indian Finance Minister, Pranab Mukherjee and the visiting Omani Minister of National Economy on the July 15, 2010. The fund would be established in Mumbai and will be jointly managed by the State Bank of India and the Oman State General Reserve Fund.

We have agreed that this fund is going to be invested both in Oman and India. But of course we would like very much that fund to participate in the infrastructure projects in India. This money which has been planned for is not the end of that fund, but depends on the size of projects which the fund would be addressing in India or in Oman.

Besides, we believe that this will initiate public funds from the people to be also supported this fund for larger projects, big projects, particularly in the road sector. And the power generation sector would be probably the first priority for the fund and other investors, said Abdullah.

The Omani foreign minister lauded Indias success in hosting the 19th Commonwealth Games and on being elected as a non-permanent member to the UN Security Council.

The Indian minister for external affairs, SM Krishna said : We had broad-ranging discussions on recent developments in our bilateral relations especially in the economic and commercial fields where our relationship has grown exponentially in the last few years. Our bilateral trade now amounts to $ 4.5 billion and we share bilateral investments worth $ 7.53 billion stretching across 13 sectors. There are around 1,537 joint ventures between our two countries. Oman is also one of the few countries in the world with which India has signed a MoU on a joint investment fund. Through this mechanism, we also aim to channelise further investment in each others economies for the benefit of our people. The last few years have also seen enormous progress in our political understanding and dialogue, security and defence relationship and in people to people exchanges.

India has always been one of the preferred destinations for Omanis for business, leisure, tourism and education. On the other hand Oman is home to over 550,000 people of Indian origin, some of who have been there for generations. Omans population is 3.4 million. Therefore, Indians constitute a sizeable proportion of the population in Oman living and working happily side by side with their Omani brethren. No wonder there are over 125 flights every week between the two countries, and the frequency is likely to be enhanced in due course.

India's strategic dialogue with Oman dates back to 2002, and the seventh round of the India-Oman Strategic Consultative Group meeting was held in January 2009.

India's Deputy Chairman of Planning Commission and the Advisor to Sultan of Oman for Economic Planning, were entrusted with the responsibility to thrash out a blueprint to qualitatively raise our economic and business ties. The committee co-chaired by them met twice and their report is awaited soon.

The sixth session of the India-Oman Joint Commission meeting co-chaired by the commerce ministers of both the countries was held in Muscat in September 2010. Talks also covered SME sector and examined various other facets.

Under a MoU on defence cooperation the fourth round of talks was held in Muscat in May 2010, co-chaired by the Indian defence secretary and the under secretary for defence of Oman.

There are over 1500 India-Oman joint ventures covering 13 important socioeconomic sectors. Over $7.5 billion have been invested, of which the Indian companies have contributed $4.5 billion. As such sizeable Indian investments have flown into Oman.

One of the biggest Indian public sector investments came from IFFCO which set up the Oman-India Fertilizer Company (OMIFCO) which is a billion dollar company. It was inaugurated in January 2006. Since then the entire production of fertilizers, both urea and ammonia, is imported by India.

Again late last year, Oman scaled up its stake in another billion dollar project, this time in Madhya Pradesh, called Bharat Oman Refinery Limited, to 26%. This year, Jindal Group has acquired one of the Omani steel companies for close to half a billion dollars.

Indian industries are already operating in Oman in vital sectors like oil and gas, mining, manufacturing, IT and telecom, power, energy, water, construction, healthcare, steel and tourism.

There are a slew of important agreements between the two countries which include the double taxation avoidance agreement, bilateral investment protection agreement, an extradition treaty, and a MOU on defence cooperation.

Oman is one of Indias most important partners in GCC countries. GCC is home to a large section of the Indian expatriate community which is currently estimated at over 5.5 million. They remit about $30 billion every year back home. GCC is very important to India for meeting its energy needs. About 75% of Indias crude oil requirements comes from GCC countries.