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Saudi bonds deepen with partner India
By Abeer Allam
Published: November 3 2010 17:03 | Last updated: November 3 2010 17:03
Every Friday in the Bateha district of Riyadh, Little India kicks off as tens of thousands of south-Asian shopkeepers and labourers enjoy their day of rest.
Indian football leagues and cricket teams play in unused fields or parking lots, while elsewhere in the Saudi capital Indian executives enjoy a game of tennis or receive guests in some of the most exclusive compounds in the kingdom.
Indian expatriates in Saudi Arabia fill every niche in the labour market, from blue-collar labourers to top-level engineers and bankers. Just over three decades ago, their numbers were fewer than 100,000, but today at 2m they have become the largest expatriate community.
The dramatic rise reflects a shift in Saudi Arabias trade and foreign policy towards India. During the cold war, Saudi Arabias close ties with Pakistan and the US strained relations with India, which had close links with the Soviet Union. Saudi Arabias backing of Pakistan during the Kashmir conflict and the Indo-Pakistani War of 1971 further strained relations.
But over the last decade, trade between India and Saudi Arabia has soared as the worlds leading oil producer and the fast-growing, energy-thirsty subcontinent have found mutual economic benefits.
They also share concerns about the influence of al-Qaeda in Pakistan and Afghanistan.
By 2001, they agreed to put Pakistan and Kashmir out of the picture, says Talmiz Ahmad, Indias ambassador in Riyadh. We agreed that there is no space in our political set-up for radical Islam or any other extremist force that preaches violence, he says.
Trade between the two states favours the kingdom, its surplus standing at SR67.3bn in 2008, with Saudi Arabia being the largest supplier of crude oil to India. Nevertheless, Saudi imports from India reached SR18bn in 2008, an almost sixfold rise from 2000, says the Saudi Arabian Monetary Agency. The kingdom is now Indias fourth-largest trade partner after China, the US and the United Arab Emirates. The trading relationship between Saudi Arabia and India is among the most strategic bilateral bonds for both countries, Mr Ahmad says.
Asian growth, led by China and India, has generated tremendous demand for Saudi oil and petrochemicals, and the kingdom is increasingly looking east.
And as Saudi Arabia expanded during the 2003-08 oil boom, demand in the kingdom for skilled and unskilled foreign workers also increased, particularly from Asia. The result is that Indians have gradually displaced Arab and western expatriates as a bulwark of the Saudi labour market.
Indians are perceived by Saudis as having good work ethics,says Rajiv Shukla, managing director of investments at HSBC Saudi Arabia. Despite some initial apprehensions and concern about discrimination, we found many similarities with Indian culture, and we get paid according to our skills not skin colour.
In the past, Indian companies have shunned Saudi Arabia, opting for other Gulf states because of the kingdoms puritanical interpretation of Islam. But Mr Shukla notes increasing interest by Indian companies in joint ventures and acquisitions. Indian companies operating there include Telecommunications Consultants India, an engineering and telecoms consultancy, Wipro, an information technology company, and Tata Motors.
Like all foreigners, legal and visa rules constantly remind Indians of their status as guest workers. They are often subject to the whims of local sponsors and barred from buying property or setting up their own enterprises.
This has resulted in the tendency for Indian expatriates to tightly control local spending, remit as much as possible and operate through a network that helps fellow countrymen to find formal and informal work wherever it may arise.
FT.com / Middle East - Saudi bonds deepen with Asian partner
By Abeer Allam
Published: November 3 2010 17:03 | Last updated: November 3 2010 17:03
Every Friday in the Bateha district of Riyadh, Little India kicks off as tens of thousands of south-Asian shopkeepers and labourers enjoy their day of rest.
Indian football leagues and cricket teams play in unused fields or parking lots, while elsewhere in the Saudi capital Indian executives enjoy a game of tennis or receive guests in some of the most exclusive compounds in the kingdom.
Indian expatriates in Saudi Arabia fill every niche in the labour market, from blue-collar labourers to top-level engineers and bankers. Just over three decades ago, their numbers were fewer than 100,000, but today at 2m they have become the largest expatriate community.
The dramatic rise reflects a shift in Saudi Arabias trade and foreign policy towards India. During the cold war, Saudi Arabias close ties with Pakistan and the US strained relations with India, which had close links with the Soviet Union. Saudi Arabias backing of Pakistan during the Kashmir conflict and the Indo-Pakistani War of 1971 further strained relations.
But over the last decade, trade between India and Saudi Arabia has soared as the worlds leading oil producer and the fast-growing, energy-thirsty subcontinent have found mutual economic benefits.
They also share concerns about the influence of al-Qaeda in Pakistan and Afghanistan.By 2001, they agreed to put Pakistan and Kashmir out of the picture,
says Talmiz Ahmad, Indias ambassador in Riyadh. We agreed that there is no space in our political set-up for radical Islam or any other extremist force that preaches violence, he says.Trade between the two states favours the kingdom, its surplus standing at SR67.3bn in 2008, with Saudi Arabia being the largest supplier of crude oil to India. Nevertheless, Saudi imports from India reached SR18bn in 2008, an almost sixfold rise from 2000, says the Saudi Arabian Monetary Agency. The kingdom is now Indias fourth-largest trade partner after China, the US and the United Arab Emirates. The trading relationship between Saudi Arabia and India is among the most strategic bilateral bonds for both countries, Mr Ahmad says.
Asian growth, led by China and India, has generated tremendous demand for Saudi oil and petrochemicals, and the kingdom is increasingly looking east.
And as Saudi Arabia expanded during the 2003-08 oil boom, demand in the kingdom for skilled and unskilled foreign workers also increased, particularly from Asia. The result is that Indians have gradually displaced Arab and western expatriates as a bulwark of the Saudi labour market.
Indians are perceived by Saudis as having good work ethics,
says Rajiv Shukla, managing director of investments at HSBC Saudi Arabia. Despite some initial apprehensions and concern about discrimination, we found many similarities with Indian culture, and we get paid according to our skills not skin colour.In the past, Indian companies have shunned Saudi Arabia, opting for other Gulf states because of the kingdoms puritanical interpretation of Islam. But Mr Shukla notes increasing interest by Indian companies in joint ventures and acquisitions. Indian companies operating there include Telecommunications Consultants India, an engineering and telecoms consultancy, Wipro, an information technology company, and Tata Motors.
Like all foreigners, legal and visa rules constantly remind Indians of their status as guest workers. They are often subject to the whims of local sponsors and barred from buying property or setting up their own enterprises.
This has resulted in the tendency for Indian expatriates to tightly control local spending, remit as much as possible and operate through a network that helps fellow countrymen to find formal and informal work wherever it may arise.
FT.com / Middle East - Saudi bonds deepen with Asian partner
