India is looking forward to reviving its bilateral trading ties with Saudi Arabia. India’s friendly gesture was received with equal fervor by the Gulf nation.

Prime Minister Dr. Manmohan Singh, while speaking at the Council for Saudi Chambers of Commerce and Industry, had welcomed Saudi investment in Indian projects, including infrastructure. He said, “India’s needs for high quality modern infrastructure are vast. We have opened our doors to foreign investment and I invite investors and entrepreneurs from Saudi Arabia to explore investment opportunities in India. I would specifically refer to the construction, manufacturing, pharmaceuticals, health, agriculture, energy, telecommunications, tourism and other service sectors.”

In return, India is offering its expertise in knowledge-based enterprises. Dr. Singh said, “India has a proven track record in the field of knowledge-based industries, which have great potential for improving the skill set of the workforce. India would be happy to share her experience with Saudi Arabia in human resources development. Cooperation in the areas of science and technology are other areas for future development.”

Dr. Singh added that the emerging economies like India and Saudi Arabia will be playing a crucial role in the restructuring of global economic and financial architecture.  According to the Indian PM, the robust growth of two economies provides ample opportunities for business communities from both sides.

The strengthening of trading ties between two countries is crucial for both. From India’s perspective, Saudi is the largest supplier of crude oil, which gains importance as the country is readying itself for a higher growth in the coming decade. For Saudi Arabia, India offers a huge market for its crude oil with its ever-expanding demand for energy.

The country is setting up an emergency social security system for the homeward expatriate workers who lost their jobs in the aftermath of economic slowdown.

Prime Minister, Dr. Manmohan Singh, said that the Congress party-led government is committed to protecting the interests of this group and will be taking up the issue on top priority.

The latest crisis to affect the expat workforce is the Dubai credit debacle. It is estimated that there are 4.5 million Indians working in Gulf countries. Despite assurances that the crisis will not cast shadow on the Indian workforce, the recent developments reveal a different story.

India, along with China and Mexico, tops the list of world countries receiving maximum remittances from its population abroad. Remittances are most important for the economies of developing countries. According to the World Bank estimates, every dollar of remittance is equivalent to three dollars in real to the economy.

India’s remittance for the last fiscal year totaled a whopping $50 billion. The major source of India’s remittance is North America. However, the last few years saw the spurt of demand for labor in oil-rich Middle-eastern countries, which shifted the balance in their favor.

The recession has affected both skilled and semi-skilled workers abroad. Dr. Singh said that a ‘return and resettlement fund’ would be set up to provide social security net for the returning workers.

Indian Community Welfare Fund is already in place in 18 countries to lend emergency support to the Indian workers. The government is also negotiating social security agreements with countries having large Indian emigrant population. While agreements are already in force with Switzerland, the Netherlands and Luxembourg, labor agreements are being negotiated with Bahrain, Malaysia and Qatar.

In the presence of Russian Prime Minister Vladimir Putin at the Indo-Russian CEO Council meeting on Monday, Prime Minister Manmohan Singh said that India is slated to regain a GDP growth rate of 9% by 2010-11. According to Dr. Singh, the domestic savings and investment figures are encouraging. The economy is expected to get a further boost from the resurgent IT-ITES sector. After a discouraging 2008-09, the activity in the sector has picked up in the last couple of months. The GDP growth rate has registered an impressive 7.9% growth in the last quarter.

Goldman Sachs has predicted the real (adjusted for inflation) GDP growth of 8.2% in 2010-11 and 8.7% in 2011-12, mainly on the back of rising industrial activity, improvements in infrastructure, financial & fiscal reforms, and increasing local demand. Energy, telecom, retail, automobiles, real estate, and services are likely to remain bright.

However, like various other quarters, the Organization for Economic Co-operation and Development (OECD) expressed concerns over the rising fiscal deficit in its semi-annual Economic Outlook on November 19. The deficit reached 61% of its 2009-10 targets by the end of October itself, setting stage for overshooting the targets by the year-end. Therefore, OECD’s revised forecast for the real GDP growth rate was 7.6% for 2010-11.