India - Arab Investment Projects Conclave
April 18-19, 2008, New Delhi

Speech by Shri Pranab Mukherjee, Hon'ble External Affairs Minister, Govt. of India

I am happy to have this opportunity of inaugurating the Arab - India Conclave. This is a laudable effort by FICCI, one of India's oldest industry bodies and I congratulate it for taking the initiative. I also take this opportunity to extend a very warm welcome to all the delegates and wish them productive participation in this two-day conclave.

I wish to extend a special welcome to our friends from the Arab world, whose association with India through commerce spans many centuries of our common history. The Silk Route between Asia and the Middle East was, until the 13th century, among the world's most important trade routes. Trade and investment between these regions have again assumed great importance in the modern era. Today, it is up to governments and the private sector to work as partners in both India and the Arab countries and create a more responsive investment climate that will allow this new Silk Route to achieve its full potential.

This Conclave is aimed at businesspersons and potential investors keen on establishing or expanding their existing projects through enhanced financial, technical and managerial participation in India and the Arab countries. It is also reflective of the desire of Indian industry to engage and increase its involvement in its extended neighbourhood. Today, there are enormous opportunities for profitable ventures in areas as diverse as IT, telecom, auto parts, healthcare, biotech, etc. There is also great potential in areas such as food-processing, education, manufacturing, construction and banking services.

In my view, however, the most important opening for the future is the chance for investible capital on one side to combine virtuously with capacity and experience on the other side. The increased availability of financial resources and investment opportunities at both ends of the new Silk Route is there for all to see. It is now for all of us to devise and help build a modern and strong bridge over the Arabian Sea by enabling the flow of resources and expertise between the two ends. This is especially relevant because one area where India has developed considerable expertise is capacity building, which we would like to share with our Arab friends.

Ladies and Gentlemen,

Let me underline for you three of the most important macro-economic challenges facing India. The first and possibly most important, is enhancing agricultural productivity. Increasing yields and productivity through appropriate technological inputs is our primary aim. This would entail creation of better infrastructure in irrigation facilities, improved quality of seeds, improved farm practices in post-harvest management, including cold chains, etc. We also need to tap the potential available in the agro-based food processing sector, for which enough scope exists through public-private partnerships. While the achievement of food security in the last five decades remains one of our greatest success stories, we are not immune to occasional global imbalances, especially of the kind that we are seeing at the moment.

Our second major challenge, which is almost inextricably linked to the first, is guaranteeing our energy security. India has to depend, to a large extent, on imported fuels for meeting its energy needs. Our energy needs will grow in keeping with our projected growth. High oil prices, now averaging more than 100 dollars a barrel, are a drag on our resources that could otherwise have gone for more productive purposes. We are conscious of these challenges and are exploring avenues for bilateral as well as multilateral cooperation with source countries. Our aim is to enter into long term arrangements for guaranteed supply of energy. We are simultaneously making efforts in the area of renewable energy and new technologies. Civil nuclear cooperation with various countries will also help in the achievement of our energy security objectives.

Thirdly, India is a country of young people. For many years to come, India will be one of the important contributors to the available global workforce. However, in order to sustain this, we need to invest in our people, in their education and in their skill-building.

Ladies and Gentlemen,

For meeting all these challenges, India needs capital. Our guests from the Arab world would be aware that many of the countries they come from are not only flush with funds, but also have massive capacity to invest in the infrastructure needs of India. I am happy to convey that a delegation headed by the Deputy Chairman of the Planning Commission is visiting Saudi Arabia in early May to begin discussions on these ideas. Earlier, an official delegation had gone to Oman to discuss prospects for the creation of a bilateral fund to finance infrastructure projects. All these efforts are part of an approach to encourage investment from capital rich countries for infrastructure projects in India.

In this context, it is also noteworthy that like India, many Arab countries too are about to reap the talent and energy dividend of a young population whose needs for employment have to be met. Here, the respective capacities and capabilities of India and the Arab countries can prove perfectly complementary. Large projects in infrastructure or in the education and training sector can be the perfect vehicles for absorbing the budding talent of our respective young work-forces.

It is also pertinent to mention here that more than 4.5 million Indian nationals are working in the Arab countries in harmony with the local environment. Their contributions to their host countries through their skills and to India through remittances are remarkable. More importantly, they possess a wealth of experience in infrastructure construction projects which is invaluable. Monetary remittances are a tangible asset, but equally important, if not more, is the value of skills acquired through experience at work.

I am emphasizing these points because, to a large extent, our growth will depend on how we handle investments in infrastructure and remove bottlenecks. It is estimated that infrastructure alone will require an investment of more than 500 billion dollars in the next five years. We are on track to take speedy and faster decisions regarding investments in infrastructure such as rail, ports, airports, transport corridors, shipping, telecom, to name a few. Foreign Direct Investment has to increase substantially in these sectors to complement domestic investments. Given the opportunities available today, our friends from the Arab countries have a broad menu of sectors to choose from. An expansion of the investment footprint of Arab countries in India is long overdue and would be most warmly welcomed by government and business alike.

Friends, we have to take the first steps confidently, yet with care. Standing here, I see many familiar faces who are used to taking business decisions in an environment of uncertainty and have tasted success too. I take this opportunity to assure you that the reform process, which is approaching the end of its second decade, has now matured. The growth story of India and the achievements posted thus far provide us an opportunity to think ahead for an inclusive process that takes into account the needs and wants of all sections of the population, to enable us to lift more and more people from below the poverty line. It is a task that can be and has to be done by public-private partnership. I look ahead with the confidence that India and the Arab world can work closely together for a brighter future for our following generations.

I wish the India - Arab Business Conclave successful deliberations and all success in its endeavours.

Thank you.