India asks Gulf banks to register as FIIs

MUMBAI: India, on Wednesday, asked banks in the Gulf countries to register themselves as Foreign Institutional Investors (FIIs) so that they can trade in equity markets here.

"FIIs from Gulf countries should actively look at investing in the Indian stock markets," Union Commerce
Minister Kamal Nath said in a presentation at the valedictory function of the 3rd India-Gulf Cooperation Council Industrial Forum.

He said India's stock markets were booming and registering as FIIs here would help Gulf banks deliver
benefits to their high networth clients.

Foreign Direct Investment (FDI) has jumped three-fold from $5.5 billion in 2005-06 to $15.7 billion in 2006-07, the minister pointed out.

"Buoyed by this growth, this year we have set ourselves a target of $30 billion in FDI."

Gulf Cooperation Council comprises of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

At the end of the two-day conference, the two sides identified investment opportunities in infrastructure and
agro-processing industry in India and the Gulf countries.

Both India and GCC have also agreed to speed up talks for a free trade agreement (FTA) between them.

“There is no problem from the Indian side to expedite the FTA process," Department of Industrial Policy and Promotion Secretary Ajay Dua said.

Nath had said on Tuesday that the FTA could be clinched in the next one year.

The Gulf countries are also discussing similar agreements with several countries, including Pakistan and Singapore, GCC Assistant Secretary General for Economic Affairs Mohamad Obiad Almazroai said.

"We have one negotiation team talking with all," he said.

"Once the FTA with European Union is in place, the FTA with India would be the next."

India and the Gulf countries would set up an investment company for facilitating small and medium enterprises (SMEs) to open operations in both the regions.

The company would be set up with an investment of $50-70 million.

"SMEs form an integral part of most developing economies, accounting for the largest share of fresh job creation and industrial production," Nath said.

SMEs in India account for a substantial 39 per cent production and contribute 34 per cent to India's exports and employ 20 million people, he said.