India, Saudi Arabia seek to deepen business, strategic ties

New Delhi: India and Saudi Arabia Thursday sought to further deepen strategic diplomatic and business relations as the oil-rich Gulf kingdom's Crown Prince Salman bin Abdulaziz Al Saud met India's top leadership, including President Pranab Mukherjee and Prime Minister Manmohan Singh.

During the meeting with the prime minister, the two leaders "discussed trade, investment, terrorism and security situation in West Asia and Afghanistan".

"India has a special and warm relationship with Saudi Arabia which we accord high importance," Manmohan Singh told the visiting leader.

Prince Salman, who is also deputy prime minister and defence minister of Saudi Arabia, is on a three-day official visit to India. This is Prince Salman's first visit to New Delhi as crown price of the Gulf kingdom, that supplies nearly one-fifth of oil needs of the Asia's third largest economy.

"The prime minister held a special lunch for the visiting dignitary. He also thanked him for the facilities extended to Indian Hajj pilgrims," a source told IANS.

Welcoming the Crown Prince, who called on him at the Rashtrapati Bhavan here, the president said: "Relations between India and Saudi Arabia will be greatly strengthened by this visit."

"India cherishes its cordial and friendly relations with Saudi Arabia, which are deep-rooted in history and based on the foundation of close people-to-people contacts," he added.

The two countries Wednesday signed a memorandum of understanding (MoU) on defence cooperation for greater exchange of information and training.

The president said the MoU "would help defence personnel of the two countries to work closely and learn from the experiences of each other as both the countries are vulnerable to the menace of terrorism".

Meanwhile, Indian and Saudi companies signed four agreements to jointly promote and facilitate investments and trade.

The representatives of Indian and Saudi companies signed the memorandums of understanding at India-Saudi Arabia Business Forum meeting here organised jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Council of Saudi Chambers.

Saudi Arabia Commerce and Industry Minister Tawfig Fawzan Alrabiah, who is a part of the high-level delegation accompanying the crown prince, emphasised on the need for further strengthening trade and investment ties.

Urging Indian authorities to explore possibilities of easing the regulation, the minister said Saudi investors are concerned about capital gains and other taxation issues in India.

"The issue of taxation of capital gains continues to be major impediment in promoting Saudi investment in India, and I call on the Indian authorities to explore relaxation of this issue," Alrabiah said.

The minister pointed out that the two countries have taken a number of steps to promote bilateral investments, but taxation issue remain one of the major hurdles. "We are aware that a series of steps are being undertaken to attract Saudi investment into India."

Commerce and Industry Minister Anand Sharma during a meeting with his Saudi counterpart sought the kingdom's support for early conclusion of the free trade agreement with the six nation Gulf Cooperation Council (GCC) countries.

Alrabiah said several Indian companies have shown interests to expand operations in Saudi Arabia.