Prime Minister of India - Dr. Manmohan Singh

PM's opening statement at the Business Community Reception in Oman

"I am extremely pleased to have this opportunity to meet you, the captains of Oman's business and industry, today.

This is my first visit to Oman as Prime Minister. It reflects the great importance that the Government and people of India attach to our relations with Oman. We seek a broad-based relationship involving our parliamentarians, business communities and civil society actors to realise the full potential of our relations. Your role in building this partnership is truly critical.

We are extremely pleased to see the rapid progress which Oman has made under the wise leadership of His Majesty Sultan Qaboos bin Said. Oman's progress is a tribute to the hard work and spirit of enterprise of its people and the wise stewardship of His Majesty.

The destinies of the Gulf countries and India are closely interlinked. We have had a tradition of trade and civilisational contacts through the sea over many centuries. The large Indian community in Oman serves as a bridge between us, contributing to wealth and prosperity for both Oman and India. Today, the revolution in the communications and information technology sectors has brought us even closer together.

I was glad to learn that there are presently over 125 weekly flights between India and Oman, and new capacity addition is being planned.

Our total non-oil trade which was less than 200 million US dollars in 2000 has gone up seven fold to around 1.4 billion US dollars this year. I am told this figure could soon cross 2 billion US dollars.

On the investment front, the Oman-India Fertilizer Company stands as a shining example of our mutual cooperation. There has been an increase in investments in each other's countries during the last 2-3 years.

Our banks are functioning in each other's countries. Several large Indian companies are already located in Oman or are working in partnership with local companies in such sectors as oil and gas, mining, manufacturing, information technology and telecommunications, power and water, construction and real estate, and health care. Similarly, Omani companies have established joint ventures in India.

We also have the institutional mechanisms to promote our trade and economic cooperation. There is a Joint Commission at the level of Commerce Ministers and a Joint Business Council representing industry from both sides. They are scheduled to hold their next meetings shortly. We have in place a Bilateral Investment Promotion and Protection Agreement and a Double Taxation Avoidance Agreement. We actively cooperate within the framework of the Gulf Cooperation Council, and an India-GCC Free Trade Agreement is under negotiation.

We must, however, look to the future and plan for it. I see enormous potential for a substantial strengthening of our trade and economic ties based on growing complementarities of our two countries.

The Oman economy is witnessing robust growth. There are ambitious plans for investment in infrastructure, diversification of the industrial base, tourism, free trade zones and energy security. Oman is also keen to upgrade its technical and vocational skills.

The Indian economy has witnessed rapid and sustained growth, averaging 9% over the last four years. The macro economic fundamentals of the economy are sound. Our domestic savings rate is 35% of our GDP and our investment rate is 37% of our GDP. Our young demographic profile will lead to a further increase in these rates of savings and investment over the coming years.

Our infrastructure financing needs are estimated to be 500 US billion dollars in the next five years. India offers a large and growing market. Despite the global economic downturn, the Indian economy is expected to maintain a growth rate of 7 to 7.5% next year. Above all, there is great goodwill and affection for the people of Oman in our country.

In this context, I am very happy that yesterday a Memorandum of Understanding has been signed to establish the India-Oman Joint Investment Fund. The Fund is the first, but long overdue, step to facilitate investments in infrastructure, tourism, health, telecom, utilities, urban infrastructure and other sectors. I would call upon captains of Oman's industry and financial companies to invest surplus liquidity into key infrastructure sectors in India. We are determined to create a hospitable climate for investment, particularly foreign investment from friendly countries like Oman.

There is vast potential for cooperation in the energy, fertilizers, IT, tourism and education sectors. You should also actively work with your Indian counterparts to explore possibilities of joint ventures in third countries.

I can assure you that we will do all that is necessary to facilitate greater trade and investment between India and Oman. India sees Oman as a natural partner in progress that benefits not only our two countries but also the Gulf region as a whole.

Against the background of the current international economic and financial situation I suggest there is an even greater need for us to join hands to shape counter-cyclical growth strategies by focusing on the real economy. India and Oman are well placed to convert this challenge into an opportunity. We count on you to be the architects of this magnificent change.

This is my first visit to your beautiful country and a voyage of discovery for me. In meeting you with the Captains of industry of Oman, I would wish to know your perceptions on how we can further strengthen our trade and economic ties and what problems you are facing for investment in India."