In what will channelise investments from oil-rich Saudi Arabia into India’s infrastructure sector, India and Saudi Arabia have formalised the structuring of the $750-million (about Rs. 4,650-crore) India-Saudi Investment Fund that was announced during Prime Minister Manmohan Singh’s visit to Riyadh in 2010.
The infrastructure sector requires an estimated $1 trillion (or Rs. 62 lakh crore) in investments over the next four-five years.
Top official sources told HT that following the recent visit of finance minister P Chidambaram to Riyadh in January this year, both sides have finally agreed to proceed with the setting up the fund and have decided to appoint nodal points in a time-bound manner.
“Joint secretary (infra) in the department of economic affairs (DEA), ministry of finance shall be the nodal point from the Indian Side and director general, Public Investment Fund, shall be the nodal point from the Saudi side,” officials said.
Saudi Arabia is India’s fourth-largest trading partner at $43.78 billion in 2012-13. During April-November 2013-14, the two-way trade was $32.7 billion. India’s imports of crude form a major part of this trade with almost one-fifth of the country’s oil imports coming from Saudi Arabia.
Besides Saudi Arabia, other cash-rich Gulf nations including Kuwait, Abu Dhabi and several other sovereign wealth funds (SWFs) from across the globe including Japan, UAE, Norway, Canada among others have also shown interest in investing in India’s infrastructure projects including the Delhi Mumbai Industrial Corridor, power projects, toll bridges, civil aviation and oil and gas projects.
Leading SWFs have also expressed interests in investing in government bonds floated specifically for funding infrastructure projects, officials said.
“India is preferred as one of the top three investment destinations amongst the emerging economies of Brazil, China and India. Returns on infrastructure in India are among the highest in the world,” they added.