India and Oman have signed a Memorandum of Understanding (MoU) to set up an Indo-Oman Joint Investment Fund (IOJIF) with an equity contribution of US$ 100 million to fund the multi-sectoral projects. The MoU for the Fund was signed by State Bank of India and State General Reserve Fund, Sultanate of Oman.
The fund will take up the mutually agreed various projects viz. tourism, health, telecom and utility and urban infrastructure and other sectors. The IOJIF isn’t the first major joint initiative between the two countries as the $969-million Oman-India Fertilizer Company had initiated production in 2005.
Prime Minister Manmohan Singh, who is on a two-day maiden visit to Gulf countries—Oman and Qatar from Nov 8-10, held a bilateral meeting with Oman’s Deputy Prime Minister Sayyid Fahd Mahmoud Al Said on various issues and later signed an agreement for the protection of the rights of nearly five lakh Indians employed in gulf countries. According to the agreement, no Omanese companies could alter the service conditions of their employees without their consent.
The talks between the two leaders mostly centred on increasing trade and economic cooperation.
Calling upon the Oman’s industry and financial companies to invest surplus liquidity into key infrastructure sectors in India, the Prime Minister Singh said: “We are determined to create a hospitable climate for investment, particularly foreign investment from friendly countries like Oman.”
“We will take all the necessary steps to facilitate greater trade and investment between India and Oman,” he added.
Singh said the two countries need to work in collaboration as there is vast potential for cooperation in the energy, fertilisers, IT, tourism and education sectors. The total non-oil trade, which was less than US$ 200 million in 2000, has stepped up seven fold to US$ 1.4 million this year. Singh said this figure could soon surpass US$ 2 billion.
With the initial investment of 10 crore dollars, the Joint Investment Fund will be enhanced to 1.5 billion dollars and the fund will be invested on the mutually agreed sectors. Both the countries will contribute equal amount of wealth. This fund is being believed to help both countries in tackling with the global financial crisis.
The MoU shall be valid and effective for a period of two years and may be extended on mutual consent for another similar period. The purpose of this agreement is to increase the expenditure into various sectors and to lessen the global financial slump.
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