Saudi asks India to ease tax norms to speed up investment flow

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Capital gains tax is a major hurdle in promoting Saudi investments in India, Saudi Arabia's Minister of Commerce and Industry Tawfiq Al Rabiah said today.

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

"I would also like to emphasise on the importance of the activation of the Saudi Indian Joint Fund," he said at the India-Saudi Arabia Business Forum at Ficci here.

The proposed USD 750-million joint fund is likely to focus on development of infrastructure and promote joint exploration and production of hydrocarbons.

Saudi Arabia's Minister of Economy & Planning Mohammed Al-Jasser invited Indian businesses to invest in their mining sector which has remained relatively undeveloped.

Ficci President Sidharth Birla said the two countries need to explore fresh frontiers of cooperation in sectors like IT & ITES, auto components, automobiles, petrochemicals, pharmaceuticals, chemicals, oil and gas, refineries and metals so as to pave the way for diversification of the trade basket.

The two countries inked four MoUs (memorandum of understanding) at the Business Forum to strengthen bilateral trade. The MoUs seek to establish a local manufacturing facility for oil drilling products, set up a logistic and shipping network between India and Saudi Arabia and supply basmati rice and industrial equipment to Saudi Arabia.

India-Saudi Arabia trade relations have witnessed a steady growth in the last few years. Saudi Arabia is India's fourth largest trade partner. The bilateral trade between the two countries stood at USD 43.19 billion in 2012-13.

Saudi Arabia is also India's largest supplier of crude oil, accounting for 17 per cent of the country's requirements, and is one of the major markets in the world for Indian exports.

Several Indian companies have established collaborations with Saudi companies and many are working the areas of designing, consultancy, financial services and software development.

Saudi Arabia is destination to more than 1.86 per cent of India's global exports and is also the source of 6.35 per cent of India's global imports.

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