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MEI India Digest

Presidential Visit to Syria: A Curtain Raiser

Issue No. 14
Tuesday, 16 November 2010

By: Nivedita Kapoor
The story is all too familiar and is fondly remembered whenever there is a reference to Indo-Syrian relations. In 1957, Prime Minister Jawaharlal Nehru visited the Middle Eastern state on his way to the United States of America. During this relatively short sojourn, the discussions were so fruitful that an up market street in the heart of the capital city of Damascus was named after the Indian leader.
Later this month, President Pratibha Patil will become the first Indian head of the state to visit Syria, a visit that takes place two years after President Bashar Assad visited New Delhi. The latter’s visit was in fact the first by a Syrian head of the state after 1978, when the current president’s father Hafez Al Assad was at the helm of affairs.[1]  President Patil will visit not only the Syrian capital, but also the commercial city, Aleppo.[2]  The visit to the latter city is only natural, with both countries looking to enhance economic ties. Aleppo is Syria’s dominant manufacturing centre, with a share of more than 50 percent in manufacturing and an even greater export share.[3]
Over the past years, the economic relationship between the two states has gathered momentum with bilateral trade galloping from a mere US$30 million in 1995-96 to US$528.46 million in 2008-09.[4]  In fact, in 2006 out of the total US$800 million received by Syria as investment, US$ 84 million came from India. ‘That was just US$16 million short of China’s US$100 million, while Iran topped the list. India, therefore, emerged third highest. Even Germany was fourth-ranked, with US$24 million, while the EU as a whole put in US$155 million.’[5]
A number of trade agreements were signed during the visit of Indian Prime Minister Atal Behari Vajpayee to the country in 2003 which came 15 years after Prime Minister Rajiv Gandhi visited Syria in 1988.[6]  It was during Vajpayee’s visit that the two countries decided to upgrade their Joint Trade Committee to a Joint Commission.[7]  The other trade agreements included Cooperation in Information Technology and Services, agriculture, technical cooperation and exchange programme in the field of education, besides mutual cooperation between the National Small Industries Corporation of India and the Ministry of Industry of Syria. From amongst these, the Indian industry was especially enthusiastic about the developments in IT sector. Till now, Indian investments in Syria have not been on a large scale but the telecom sector promises to change all that. President Assad has himself expressed interest in this field to bring about a communication revolution in his country.[8]  The traditional exports from Syria have consisted of minerals and mineral fuels (most importantly phosphates) and crude oil while India has been exporting yarns, machinery, pharmaceuticals, and metal and jute products.
The oil sector is another major area where both countries share common interests. India is a major oil importer owing to its rising domestic demand and in the Syrian case about 67 percent of its foreign exchange earnings come from oil exports. In this sector, India has even allied with China when in 2005 the China National Petroleum Corporation (CNPC) and Oil and Natural Gas Commission (ONGC) jointly won a bid to acquire 37 percent of Petro-Canada's stake in Syrian oilfields for US$573 million.[9]  In October 2010, both the countries signed a memorandum of understanding (MoU) for long-term cooperation and setting up of joint venture projects in Syria in the phosphate sector.[10]
Along with Texas-based IPR international, the state-owned ONCG Videsh Limited (OVL) has been exploring oil and natural gas in Block 24 near Deir-e-Zor in northern Syria, where development of Abu Khashab and Rashid discoveries has now been approved by the Syrian government.[11]  According to estimates, Syria had 2.5 billion barrels of petroleum reserves as of January 2010 while its proven natural gas reserves were estimated at 8.5 trillion cubic feet.[12]
During the visit of President Assad in 2008, a decision to revise the double taxation avoidance agreement (DTAA) was taken which includes anti-abuse provisions and provides for source-based taxation of capital gains arising from sale of shares.[13]  The President also called on Indian industries to explore opportunities in infrastructure development, energy production, mineral processing as well as Information Technology (IT) education and training opportunities.[14]
In terms of political ties, both countries have been members of Non-Aligned Movement and have shared a cordial relationship. After Prime Minister Vajpayee’s visit, both sides agreed to increase the frequency of visits between high ranking members to enhance bilateral cooperation.
Even as both countries move forward, they continue to emphasize the historical nature of their ties. As Gautam Mukhopadhaya, former Indian Ambassador to Syria put it ‘both countries have ancient civilizations, multiple religions, and a large Muslim population. Christianity reached us from Bilad ash-Shaam (Greater Syria). In addition to religious ties, both countries struggled for their independence. Both are developing countries from the South and both are non aligned countries. Both started as agricultural countries and both are trying to modernize their economies.’ Additionally, the two countries were on the same civilization path; the Silk Road through which, for centuries, cultural and commercial exchanges took place. The ancient Syriac language, which originated in Syria, was brought to Kerala in India by St. Thomas during the 1st century A.D and since then the language has flourished and continues to be taught at a number of colleges and universities in Kerala.[15]  It is in this wider context one could view the forthcoming visit of the Indian President to Syria.
[1] ‘Syrian president to make maiden India visit’, The Jordan Times, http://www.jordantimes.com/index.php?news=8589&searchFor=Iran
[2] 'In a first, Patil to visit Syria in Nov', The Indian Express, 29 October 2010, http://www.indianexpress.com/news/in-a-first-patil-to-visit-syria-in-nov/704164/
[3] ‘Madinatuna: Aleppo City Development Strategy’, http://madinatuna.com/en/economy
[4] ‘India Syria bilateral economic relations’, Embassy of India in Damascus, August 2010, http://www.mea.gov.in/meaxpsite/foreignrelation/syria.pdf
[5] ‘India, Syria bilateral relations: stepping on the gas’, The Financial Express, 25 June 2008, http://www.financialexpress.com/news/india-syria-bilateral-relations-stepping-on-the-gas/326994/0
[6] ‘Vajpayee's visit affirms India's Historical Ties, Strong Friendship with Syria’, MEA, 17 November 2003, http://meaindia.nic.in/mystart.php?id=00057376
[7] ‘India, Syria to sign nine pacts on trade’, November 14, 2003, http://www.rediff.com/news/2003/nov/14pmsyr.htm
[8] ‘India, Syria bilateral relations: stepping on the gas’, The Financial Express, 25 June 2008, http://www.financialexpress.com/news/india-syria-bilateral-relations-stepping-on-the-gas/326994/0
[9] ‘India, China pin down $573m Syria deal’, Asia Times Online, 22 December 2005, http://www.atimes.com/atimes/China_Business/GL22Cb06.html
[10] ‘India and Syria sign MoU for new phosphate JV’, Industrial Minerals, 12 November 2010, http://www.mineralnet.co.uk/Article/2715134/India-and-Syria-sign-MoU-for-new-phosphate-jv-to-meet-.html
[11] 'Director Report, Oil and Natural Gas Corporation Limited’, March 2010, http://money.livemint.com/IID91/F100312/DirectorsReport/Company.aspx
[12] ‘Syria Energy Profile: To Double Natural Gas Production in 2010’, Eurasia Review, 29 June 2010, http://www.eurasiareview.com/201006294046/syria-energy-profile-to-double-natural-gas-production-in-2010.html
[13] ‘India, Syria make changes in pact to avoid double taxation’, The Hindu, 21 April 2009, http://www.thehindubusinessline.com/2009/04/22/stories/2009042251100400.htm
[14] ‘Syria invites India for joint ventures’, The Tehran Times, 19 June 2008, http://www.tehrantimes.com/index_View.asp?code=171104
[15] ‘Nehru’s Damascus rose: An interview with the Indian Ambassador to Syria', FW magazine, July 2008, http://www.fw-magazine.com/content/nehru%E2%80%99s-damascus-rose-interview-indian-ambassador-syria
Nivedita Kapoor is a journalist with the Free Press Newspaper in Indore. EMail  
As part of its editorial policy, the MEI@ND standardizes spelling and date formats to make the text uniformly accessible and stylistically consistent.
The views expressed here are those of the author and do not necessarily reflect the views/positions of the MEI@ND. Editor, MEI India Digest: P R Kumaraswamy