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India, Qatar in capital tie-up

business Updated: Feb 10, 2009 20:38 IST
Anupama Airy
Anupama Airy
Hindustan Times
India

At a time when the world is grappling with the worst financial crisis in 70 years and when investments have all but dried up, India and Qatar are all set to sign an agreement for setting up a multi-billion dollar joint investment fund that will catalyse investments in mega-sized infrastructure projects in the two countries.

State Bank of India (SBI) has been designated as the nodal agency for operating this fund from the Indian side.

A senior official in the Prime Minister’s Office said the agreement is likely to be executed during the three day visit of the Qatari minister of state for foreign affairs, Ahmed bin Abdullah al-Mahmoud, to India beginning February 24.

The fund was conceived during the visit of Prime Minister Manmohan Singh to Qatar in November 2008.

On radar are various projects in the power, oil, fertiliser and civil aviation sectors. This includes a $4-5 billion gas-based mega petrochemical project in Qatar.

The proposed project will be jointly set up between GAIL (India) and Reliance Industries.

In the power sector, NTPC has proposed a substantial equity stake of upto 40 per cent in its 2,000 mega watt, gas based Kayamkulam power project in Kochi (Kerala). This will be in lieu of assured gas supplies from Qatar.

In addition, investments by Qatari companies in modernisation of Indian airports and setting up an ammonia-urea gas based plant in Qatar on a joint venture basis are likely to be firmed up.

Besides, the two countries will review the double taxation avoidance agreement (DTAA) between them.

India imports 7.5 million tonnes of liquefied natural gas (LNG) annually from Qatar and has sought an additional 5 million tonnes to meet its growing energy needs.