New Delhi, Dec 14: There exists a severe image problem and a mental block among entrepreneurs from both India and Saudi Arabia on doing business in each other’s country, which is the key hurdle in expanding bilateral trade beyond the traditional one in crude oil, a prominent Saudi businessman said on Monday.
“This mutual and severe image problem is the central factor holding up expansion of business relations between India and Saudi Arabia,” Kamel S.Al-Munajjed, chairman Saudi Indian Business Council, told IANS on the sidelines of the Council meeting organised here by industry chamber FICCI.
“This despite our two countries having excellent strategic, political and security relations. Business has just not kept up with it because of misconceptions about each other,” he said.
“The otherwise excellent relations are not percolating down to change people’s conceptions. They think Saudi Arabia is a closed country, you cannot go out there et cetera, etcetra” he added.
Similarly, Al-Munajjed pointed out Saudi misconceptions about India were partly-based on the fact that the majority of the three million Indians working in that country are blue collar low-end workforce, which did not give an idea of India’s tremendous advances in sklling manpower, about its burgeoning middle class nor about the economic reforms underway.
Describing the Indians in Saudi Arabia as “the largest group of foreigners with the lowest rate of crime and the most professional,” the Saudi said that in concrete terms the lack of a free trade agreement was another major handicap to expanding bilateral trade.
“The free trade agreement (FTA) negotiations with the Gulf Cooperation Council started in 2004 but stopped in 2006, one reason being the many anti-dumping cases in India filed against Saudi products,” Al-Munajjed said.
On August 25, 2004, a framework agreement on economic cooperation was signed between India and the GCC, is its third-largest trading partner. The council is a customs union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
At a meeting in September with GCC foreign ministers in New York, External Affairs Minister Sushma Swaraj called for the early finalisation of the India-Gulf Cooperation Council Free Trade Agreement and operationalising the India-GCC Framework Agreement.
India’s trade with GCC rose to $150 billion in 2014, while that between Saudi Arabia and India in 2014 stood at about $40 billion, with Saudi exports to India at over $33 billion, and its imports from India at nearly $7 billion.
Al-Munajjed, who as the head of a real estate company has developed good business interests in India, said that in view of the recent development of a Saudi-India startegic partnership, his country will embark on a sustained outreach effort to India from early next year.
“Since about the last two years, India has become Saudi Arabia’s strategic partner. With this has come this Business Council. Next year we have a big outreach programme that includes academics, parliamentarians. We need to talk freely and frankly to remove misconceptions,” he said.
At the 4th GCC-India Industrial Forum last month at the King Abdullah Economic City in Rabigh, Saudi Arabia, GCC secretariat members said rapid political and security developments necessitated closer ties between the two sides.
Conflict in the Middle East region has taken a new dimension with the security threat posed by rapid advances made by Isis militants. (IANS)