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Oil-rich Kuwait Plans to Increase the Investment in India by Double

Adrian Todaro

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Taking advantage of India’s growth story and exploring third country joint Projects. Kuwait is aiming to double its investment in India from the current five billion dollars.

As per sources, The Kuwait Investment Authority (KIA) has currently invested five billion USD and plans to double this. Kuwait also is aiming to enter into third country joint projects on the lines of joint Kuwait-Japan investments in third countries.

Recently India and UAE have joined into a third country project with the African nation, Ethiopia. India also has plans of having a similar partnership with Saudi Arabia.

As far as history goes, India and Kuwait have a vibrant trade relationship. India has been consistently one of Kuwait’s top ten trading partners. As per the 2017-18 statistics, Kuwait was the ninth largest oil supplier to India, and it meets about 4.63% of India’s energy needs. According to India’s External Affairs Ministry’s brief on India-Kuwait relations, “India is looking for a substantial Kuwaiti investment in the oil & gas sector. Large business houses of Kuwaiti also have investible surpluses.”

As per India’s MEA, 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 experiencing a positive trend for the past few years. In 2017-18, 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.

The MEA brief added 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 with respect to 2014-15. India’s exports to Kuwait included food items, cereals, textiles, garments, electrical and engineering equipment, machinery and mechanical appliances, cars, trucks, buses, tires, chemicals, jewelry, handicrafts, metal products, iron, and steel, etc.

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

The MEA brief states, “In 2013, KIA had made an investment of $ 5.37 million in the Power Grid Corporation of India Limited, 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 among others.

The brief added, “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; 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.”

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

As per IMF estimates, Kuwait’s nominal GDP for 2016 was $101.524 billion, and GDP per capita in terms of PPP was $70165 in 2015. Kuwait’s Sovereign Wealth Fund is above $592 billion, and it is managed by the Kuwait Investment Authority (KIA). The brief also added 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 from October.

The MEA brief informed, “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.” It further added, “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 ($ 780000) at Chennai Special Economic Zone.”

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