India’s Reliance Industries said on Saturday it had set up a wholly-owned subsidiary in the United Arab Emirates (UAE) for trading in crude oil, petroleum, petrochemical products and agricultural commodities.
The announcement comes ten days after UAE Minister of State for Foreign Trade, Thani Al Zeyoudi, led a delegation to New Delhi for talks on deepening trade and investment ties with India. Al Zeyoudi agreed with his Indian counterpart Piyush Goyal to conclude a Comprehensive Economic Partnership Agreement by the end of the year that would boost non-oil trade between the nations from $40 billion a year before the pandemic to $100 billion over the next five years.
Goyal said the two countries would focus on sectors including petrochemicals, textiles, jewelry, medical equipment and “techno-finance.” The UAE wants to “strengthen our position as a global gateway to Africa, Asia and Europe,” said Al Zeyoudi at the time. “The UAE is paving the way for a more vibrant and competitive knowledge-based economy and continues to be a catalyst for economic growth for our partners around the globe.”
The UAE is India’s sixth-largest source of crude oil but it wants to broaden trade in other sectors. Being a desert nation dependent on imports, it launched investments of $7 billion dollars in 2019 to create a “food corridor” and support the development of Indian agriculture.
Reliance Industries, which operates the world’s biggest refining complex at Jamnagar in western India, gave no reasons for its decision to set up the new UAE unit though it is in line with its aim of becoming more international in focus. Reliance International Ltd (RINL), the new subsidiary, is yet to commence operations, the parent company said in an exchange filing, adding it had invested $1 million in the new business.
It previously bought stakes in a number of overseas exploration and manufacturing assets, and in June it entered an agreement with Abu Dhabi National Oil Co. (ADNOC) to build a multi-billion dollar chemical project in Ruwais, marking the group’s first investment in a greenfield overseas project.
Reliance Industries in June announced the appointment of Saudi Aramco Chairman Yasir Al-Rumayyan as a director of Reliance’s board and said this was the “beginning of the internationalisation of Reliance.” The group hopes to formalise this year a deal to sell a 20% stake in its oil-to-chemical business to Aramco.
Kevin Hamlin and Reuters.