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Home » India » Oil-rich Kuwait plans to double investments in India; eyes joint projects in third nation.

Oil-rich Kuwait plans to double investments in India; eyes joint projects in third nation.

Feb 7, 2019 | Emerging Trends Advisors, India

Kuwaiti investment in India has been mostly indirect through portfolio managers.

Oil-rich Kuwait is planning to double its investments in India from the current five billion dollars taking advantage of the country’s growth story and also exploring third country joint projects with Delhi.

The Kuwait Investment Authority (KIA) has currently invested five billion USD and plans to double this; senior sources told ET. Kuwait is also planning to enter into third country joint projects on the lines of collective Kuwait-Japan investments in third countries, sources indicated.

India and UAE have entered into the third country project in Ethiopia. Delhi has similar plans with Saudi Arabia.

Historically, Indo-Kuwaiti relations have always had a vital trade dimension. India has consistently been among the top ten trading partners of Kuwait. During 2017-18, Kuwait was the ninth largest oil supplier to India, and it meets about 4.63% of India’s energy needs. “India is looking for substantial Kuwaiti investments in oil & gas sector. Large business houses of Kuwaiti also have investible surpluses,” according to the Ministry of External Affairs (MEA) brief on India-Kuwait ties.

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Total non-oil bilateral trade between India and Kuwait increased by about 11%, from $ 2,150.63 million in 2015-16 to $ 2,405.40 million in 2017-18. India’s non-oil exports to Kuwait are showing a positive trend for the past few years. Non-oil export from India to Kuwait increased by about 19.60%, from $ 1,240.54 million in 2015-16 to $ 1,361.06 million in 2017-18, according to MEA.

Total bilateral trade with Kuwait during 2015-16 was $ 6.2 billion. India’s exports to Kuwait grew by 4% ($ 1.24 billion) in 2015-16 vis-à-vis 2014-15. India’s exports to Kuwait included food items, cereals, textiles, garments, electrical and engineering equipment, machinery and mechanical appliances, cars, trucks, buses, tyres, chemicals, jewellery, handicrafts, metal products, iron and steel, etc., the MEA brief added.

Kuwaiti investment in India has been mostly indirect through portfolio managers. In December 2015, KIA announced an investment of $ 300 million in GMR Infrastructure Ltd. Earlier, in October 2015, KIA made a substantial investment in the Interglobe Aviation’s (Indigo Airlines) IPO, according to the MEA brief.

“In 2013, KIA had made an investment of $ 5.37 million in the Power Grid Corporation of India Ltd. Other significant Kuwaiti presence in India includes those by Alghanim Group of Kuwait; the KAPICO group; National Aviation Services; Agility Logistics, Hasibat Holding Co, KGA Group, KCIC, KIPCO, Global Investment House, Kuwait Finance House etc. India related funds launched in Kuwait include India Fund (October 2005); Tijari India Fund (December 2006); India Equity Fund (January 2007); Kuwait Indian Holding Company; India Private Equity Fund; 3rd Real Estate Islamic Fund (May 2007); and Mayur Hedge Fund (August 2008). Hydrocarbon sector: Kuwait remains a reliable supplier of crude oil &LPG to India, meeting our crucial energy needs.”

Indian PSUs like TCIL, LIC (International), LIC Housing Finance, New India Assurance Company, Oriental Insurance Company, Air India Ltd. (Air India and Air India Express) have offices in Kuwait. During the last two years, Indian EPC companies viz. Larsen & Toubro, Shapoorji Pallonji, Dodsal, Punj Lloyd, Simplex Projects, Essar, Kalpataru etc. were awarded EPC contracts worth over $ 6 billion in Kuwait. The Energy & Resources Institute (TERI) is executing Kuwait Oil Company (KOC)’s soil remediation project worth $ 39 million.

According to IMF estimates, Kuwait’s Nominal GDP in 2016 was $101.524 billion, and GDP per capita (PPP) was $ 70,165.99 in 2015. It has a Sovereign Wealth Fund (SWF) of over $ 592 billion, which is managed by the Kuwait Investment Authority (KIA), according to the MEA brief. These assets are held in 2 state-owned sovereign funds: the Reserve Fund for Future Generations (RFFG) and General Reserve Fund (GRF) to which Kuwait has been transferring 10% of its total revenues since October, the brief added.

“It is understood that in June 2017 KIA invested US$ 87 million invested as a consortium along with Nomura in Wells Fargo, HSBC in AU Small Finance Bank. Also, in June 2017, KIA was one of the 15 Anchor investors who participated in the IPO of Dixon Technologies, a Noida based Electronic manufacturer. They bought shares worth Rs 12.5 crores ($ 2 million)…Kuwait’s National Petroleum Services Company (Napesco) opened their first company in India, ‘Napesco India’, a limited liability company with a capital of about Rs.50 million ($ 7.8 lakh) at Chennai Special Economic Zone,” informed MEA brief.

Article Source : economictimes.indiatimes

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