Opportunities broadly exist in the following areas for investment and exports:

1.   Apparel:  The Saudi apparel market of US$850 million is set to expand in the next few years, and the prospects for lightweight, well-constructed apparel fiber such as cotton, polyester blends, and cotton or silk for women’s lingerie and children’s clothing are good.

2.   Computer Software and services:  The Saudi market for computers and peripherals remains the largest in the Middle East, estimated at $228 million in 2001.  The rapidly expanding Internet services will create subsidiary market for hardware; software and network integration and upgrades will ensure continued growth for several years.  Indian companies engaged in software exports and hardware manufacture can make use of the opportunities in the Middle East in general and Saudi Arabia in particular.

3.   Education and Training Services: An increasing population and need for skilled workers demand growth in the training requirements.  Computer and IT training are in great demand.  Indian companies such as NIIT and APTECH are already operating in this field.  There is ample room for expansion of activities of the existing players and scope for new entrants in this area.

4.   Medical Equipment: Higher budgetary allocation for health sector and new health projects, expansion and growth of existing hospitals and clinics will provide demand-surge for medical equipment for diagnostic and therapeutic applications.

5.   Pharmaceuticals: The Saudi pharmaceutical market is the largest in the Middle East.  With the growing Saudi population who demand improved healthcare, demand for pharmaceutical products continues to increase.  The Saudi government has allocated $294 million for medicines in 2001.  The market currently is of the order of over $1 billion, of which more that 98% is imported from abroad.  Despite the stringent standards of entry into the pharmaceutical sector, potential for growth exists for Indian companies in prescription drugs, generics, OTC drugs and herbal products, if pursued vigorously. - It may be noted that under the existing regulations medicines and pharmaceutical products are not admitted to the Kingdom unless a prior registration is made with the Ministry of Health.   The applications supported by the required certificates duly legalized by a Saudi Arabian Consulate in the applicant's country are examined and the samples analyzed by the Ministry of Health to ensure that the samples correspond to the specifications. If the Ministry is satisfied with the results, a license is issued.

6.   Insurance Services: The Saudi insurance market is changing and growing rapidly in both health and automobile insurance.  A new cooperative health insurance program laid out by the Health Insurance Council requires companies with more than 500 expatriate workers to provide health insurance cover for their employees.  The new regulations set an annual insurance premium of $266.67 per person to a maximum of $66,667 per person annually, with a deductible of 20%.  Once the plan is implemented, the annual medical premiums are expected to rise to $1.8 billion.  The car insurance market will also be changing due to newly drafted third party motor vehicle insurance regulations, affecting nearly 6 million cars.

7.   Auto Parts and Service equipment: Saudi Arabia has the largest market, for both new and used cars, in the Middle East.  The spare parts market is estimated at US$655 million in 2001, excluding tires and Original Equipment Manufacturers’ parts.  Enterprising auto-parts manufacturers and suppliers in India might find this a promising market.

8.    Rice:  Saudi Arabia imports all of its rice.  India dominates the rice market in Saudi Arabia, whose total rice imports was valued at $379 million in 2000 and estimated at $394 million in 2001.  Other suppliers of rice include Pakistan, Thailand, USA and Australia.  Saudi importers have begun to import bulk rice both for domestic market and re-export to African and other Arab countries.  India still needs to enhance its share of the rice market.

9.   Processed fruits and vegetables:  The Kingdom has a sizeable demand for fruits and vegetables. Local production has not been able to keep pace with the demand, and so imports of these products are expected to remain strong.  Local production consists mainly of dates.  The size of the processed fruits and vegetables market is valued at $345 million, with imports worth $110 million in 2000.  Opportunities exist for India to enter this segment.

10.  Snack foods: The majority of the Saudi population being young between the ages of 15-25, the local production of snack foods has increased lately.  Markets for quality snacks still exist.  Sweeter foods are preferred generally and gain market access more easily in the Kingdom.  The market size for snack foods is estimated at $115 million in 2001.

11. Air Conditioning and Refrigeration equipment:  The hot, dry climate in the Kingdom is ideally suited for growth in AC and refrigeration equipment market, estimated to reach $1 billion in 2001.  It is possible to find opportunities in this market for Indian entrepreneurs.

12. Electrical Power systems:  Because of a rapidly expanding population and an ambitious industrialization plan, Saudi Arabia is one of the world’s most attractive markets for power generation equipment and services.  The Saudi Ministry of Industry and Electricity’s 25-year electricity plan calls for $117 billion in capital investment to increase the Kingdom’s total power generation capacity from 17000 MW per year by 2020.  Indian manufacturers in the electrical and electronics sector will find good opportunities here.

13.   Mining and quarrying projects: Saudi Arabia is diversifying its economy and development of mineral resources is one of the thrust areas in this regard.  The Arabian Shield, a geological feature that stretches along the entire Red Sea coast contains substantial deposits of precious and non-precious metals and other minerals. Most of the formation has been mapped.   Foreign investors are offered tax exemption, long term extraction rights and other incentives to invest or establish joint ventures in these fields.  Some of the main mining projects identified are:

·          Al Jalamid Phosphate Project

·          Wadi Sawawin Iron Ore Project

·          Az Zabirah Bauxite Deposit

·          Khnaiguivah Zinc-Copper Deposit

·          Granite

·          Limestone

·          Magnesium Metal & Potassium Chloride

·          Dolomite

·          Aluminum Sulfate

·          Pozzolan