The West Asian gold pot is tilting towards India. The oil rich kingdoms of Saudi Arabia, Qatar and Kuwait — wary of the economic crisis in Europe and the slowing growth rate in America — have conveyed their desire to invest in Indian infrastructure projects.
Despite the weakening rupee and falling Indian stock markets, Saudi Arabia and Qatar told New Delhi last month that they want to move some part of their investments from the West.
What’s more, the Kuwait Investment Authority is planning to invest about $10 billion in the Indian economy and has already invested about $1.5 billion in India in the past two years.
Other West Asian countries are also considering big investments in core infrastructure sectors, such as oil, gas, power, roads, fertilisers and tourism.
Government sources said national security adviser Shiv Shankar Menon had been told during his visit to Saudi Arabia and Qatar — before he accompanied Prime Minister Manmohan Singh to Russia last month — that those governments planned to park their wealth in Indian mega projects.
And Menon is understood to have carried the message to the highest levels.
Saudi Arabia does not have a sovereign wealth fund — a state-owned investment fund, comprising financial assets and instruments. The Saudi royals, instead, invest privately. For instance, King Abdullah's nephew and Saudi investor Prince Al-Waleed bin Talal purchased a $300-million stake in Twitter last month.
Although the Saudi Arabian investments in India have been only R69 crore between 1999 and 2008, the scenario is changing fast, with bilateral non-oil trade with the UAE touching $43 billion.
The equation between New Delhi and Riyadh has changed with improvement in security ties and the growing Indian economy.
During finance minister Pranab Mukherjee's visit to the Saudi capital, Riyadh, in October 2009, the two countries created a one-billion-dollar special vehicle for joint investments. Rather than using their private surpluses for fuelling uprising in other West Asia states, these countries apparently see India as a safe haven for good investment returns.