Embassy of India

Riyadh, Saudi Arabia

India-Saudi Arabia Economic and Commercial Relations

India and Saudi Arabia share centuries old economic and socio-cultural ties. Economic ties constitute a keynote aspect of the bilateral strategic partnership. The Delhi Declaration (signed in 2006 on the sidelines of H.M. King Abdullah’s visit to India) and Riyadh Declaration (signed in 2010 during the Prime Ministerial visit) boosted the energy cooperation between both countries. The Riyadh Declaration committed the two sides to a strategic partnership based on complementarity and interdependence.

2. The landmark visits of Honorable Prime Minister Shri Narendra Modi to the Kingdom in 2016 and 2019 and the State visit of Crown Prince and Prime Minister HRH Prince Mohammad bin Salman to India in February, 2019 has marked a new era in the bilateral relations, which culminated in the setting up of the Strategic Partnership Council (SPC), co-chaired by the two leaders. Besides that, the two sides signed 11 other MoUs in the fields of energy, security, combating trafficking of narcotic drugs, defence production, civil aviation, medical products, strategic petroleum reserves, small and medium scale industries, launch of Rupay card, cooperation in training of diplomats, cooperation between stock exchanges, etc. There have been a number of Ministerial visits from both sides on regular basis. A brief description of such visits from India to the Kingdom is included in Annexure I.

3. Strategic Partnership Council is a holistic institution covering various sectors of cooperation, overarching the existing institutional mechanisms of Joint Working Commission. The SPC has two pillars: i) Political-Security-Socio-Cultural (PSSC); and ii) Economic and Investment. EAM and the Saudi Foreign Minister co-chair the Political-Security-Socio-Cultural (PSSC) pillar whereas the Economic pillar is co-chaired by Commerce & Industry Minister on Indian side and Energy Minister on Saudi side. There are 8 JWGs under the two pillars which conduct regular official level meetings. The Economic and Investment pillar constitutes of 4 JWGs covering the following heads: Industry and Infrastructure; Agriculture and food security; IT and Technology; and Energy.

4. The first Summit meeting of the Strategic Partnership Council took place during the State visit of Crown Prince and Prime Minister of Kingdom of Saudi Arabia HRH Prince Mohammed Bin Salman on September 11, 2023. The meeting marked a new milestone in the India-Saudi bilateral ties and underlined the burgeoning commercial engagements. During this meeting, eight MoUs were signed between both sides for cooperation in the fields of Energy, IT, anti-corruption, archives, investments, EXIM banks, SME banks and desalination. In a prelude to the Summit meeting, a gala networking dinner was organized which was attended by several Ministers and prominent business persons from both India and Saudi Arabia. Additionally, the first India-Saudi Investment Forum was also organized on the sidelines of this visit which was co-chaired by Hon’ble Minister of Commerce and Industry, Shri. Piyush Goyal and the Saudi Minister of Investment, H.E. Khalid Al Faleh. More than 50 MoUs (B2B and B2G) were signed during this Forum. Moreover, Saudi side also made a formal announcement to open a n office of Saudi Ministry of Investment in India.

5. Trade: Saudi Arabia is India’s fifth largest trade partner and India is Saudi Arabia’s second largest trade partner. During FY 2023-24, India’s imports from Saudi Arabia reached US $31.42 billion and exports to Saudi Arabia were worth US$ 11.56 billion. Total trade with Saudi Arabia accounted for 4.53% of India’s total trade in FY 2023-24.

[Source: Dept. of Commerce, Govt. of India]

6. Major commodities of export from India to Saudi Arabia include engineering goods, rice, petroleum products, chemicals, textiles, food products, ceramic tiles. Whereas, major commodities of import for India from Saudi Arabia are crude oil, LPG, fertilizers, chemicals, plastic and products thereof etc.

7. Investments: Indian investments in the Kingdom of Saudi Arabia have spiked in the recent years and have reached approximately USD 3 Billion (August 2023). These investments are across diverse sectors such as management and consultancy services, construction projects, telecommunications, information technology, financial services and software development, pharmaceuticals, etc. Major Indian companies and corporate groups such as L&T, TATA, Wipro, TCS, TCIL, Shapoorji & Pallonji, Air India, Go Air, Indigo, and SpiceJet etc. have established a robust presence in Saudi Arabia.

8. Saudi Investments in India: Saudi Arabia is the 19^th largest investor in India with investments amounting to $3.226 billion (March 2024). Major investments include PIF’s investments in Reliance Jio Platforms ($1.5 billion to acquire a 2.32% stake) and Reliance Retail Ventures Limited ($1.3 billion to acquire a 2.04% stake). Further, Saudi Agricultural & Livestock Investment Company (SALIC) has acquired a 33% stake in Daawat Foods Limited through its subsidiary United Farmers Investment Company, for a value of $17.23 million. Additionally, in July 2021, PIF invested in India-based healthtech Healthifyme’s $75 million Series C funding round, indicating a growing appetite for the Kingdom’s sovereign wealth fund to invest in sunrise sectors. Apart from PIF, major investment groups from the Kingdom include ARAMCO, SABIC, and ZAMIL. Soft Bank’s ‘Vision Fund’ has invested in several Indian Start-ups such as Delhivery, FirstCry, Grofers, Ola, OYO, Paytm and PolicyBazaar. SABIC has invested over $ 100 million in its technology and innovation Centre in Bengaluru, one of the largest investments in India by a Saudi company.

9. During his visit to India in February 2019, Saudi Crown Prince and Prime Minister had announced that the Kingdom would be investing US $100 billion in India in diversified sectors such as energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining, manufacturing, education and health in the forthcoming years.

10. Sector-wise Collaboration:

a.) Hydrocarbons: Saudi Arabia remained the 3rd largest Crude sourcing destination for FY 2023-24 (Apr-Jan). India Imported 26.5 MMT of crude oil in financial year 2023-24 (Apr-Jan), accounting for 14 % of the total crude imports. Crude oil Imports in Million Metric Tonne (MMT) from Saudi Arabia in the last few years are as follows:

For FY 2023-24(Apr-Jan), Saudi Arabia is the 5th largest Petroleum Products (which includes LPG) sourcing destination for India accounting for 9% of the total imports.

b.) Energy: Vision 2030 of KSA and India’s Energy policy both look to transition from conventional sources to alternative renewable and clean sources of energy. Saudi Arabia is a member of International Solar Alliance. In addition, Saudi Companies like Alfanar and Aljomaih have invested in India’s Wind and Solar Energy projects. Furthermore, both countries are collaboratively exploring Hydrogen Energy as a future source of energy.

c.) Automotive & Machinery: The sector is one of prominent exports from India to KSA. Indian companies like TATA motors, Ashok Leyland are already present in KSA. India has permitted 100% FDI through automatic route in the auto industry and is one of the most active markets for this sector. India and KSA have numerous collaborative opportunities in terms of joint ventures, development of auto hubs, R& D etc.

d.) Textiles: India exported textiles and allied products to Saudi Arabia worth 549.77 Million in FY 2023-24. India presents a host of opportunities of collaboration in this sector such as textile processing projects, integrated garment parks, investment in retail operations, technology transfer, skill development and commercialization of handloom products. Recently, in September 2023, the large delegation of Texprocil participated in the Index Hotel show.

e.)Food Security: Saudi Arabia and India are enhancing collaboration on the food-security front. Kingdom has identified India as the best destination to source commodities like Rice, Red Meat, Sugar, Infant Milk Powder, seafood etc. Saudi Agricultural & Livestock Investment Company (SALIC), owned by Public Investment has taken minority stake (33%) in LT foods -an Indian multinational rice brand. Multiple Indian delegations have been participating in Saudi Food exhibitions including Saudi HORECA, Saudi Food Show , FoodEx etc.

f.) Pharmaceuticals: The COVID-19 phase provided an excellent opportunity to enhance cooperation in this sector during which both nations supported each by supplying vaccines and other medical products. Saudi Arabia has recently announced its National Biotechnology Policy which aims to develop the Kingdom as a hub for vaccine manufacturing and bio-manufacturing. On 27^th August 2024, the Embassy of India in coordination with Saudi Food and Drug Authority (SFDA) organized a virtual workshop for Indian pharmaceutical companies, in which Indian Pharmaceutical Association (IPA), Pharmexcil and Indian Drug Manufacturers Association were among those participated.

g.) ICT: There is great scope for bilateral collaboration in the emerging technologies such as artificial intelligence, robotics, Cyber-security and automation that constitutes a keystone of Saudi Arabia’s ‘Vision 2030’. A NASSCOM delegation visited Saudi Arabia, in March 2024 to attend LEAP -2024. They also met with MCIT and SDAIA officials and held B2B meetings in Riyadh. ACES, Saudi Arabia’s leading International Neutral Digital Infrastructure company, signs a contract with Mumbai Metro Railways Corporation (MMRC) Limited in Riyadh at LEAP -2024 for providing Mobile Infrastructure Services. On 17^th August 2024, India hosted the 3^rd edition of the Voice of Global South Summit (VOGSS) in virtual format which was addressed by the Deputy Minister of Communications and Information Technology, Saudi Arabia.

h). New Thrust Areas of Cooperation: In order to realize the full potential of their commercial relations in multitude and magnitude the India and Saudi Arabia are now emphasizing on diversification of bilateral trade ties beyond the conventional field of oil and explore opportunities in novel areas such as housing, tourism, renewable energy, health, entertainment etc. including Defence. In the World Defence Show in Riyadh, Munitions India Limited signed a contract worth 225 Million USD for supply of Artillery ammunition to Kingdom of Saudi Arabia through its partner, Nadrah Company.

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Annexure I: Recent Ministerial Visits: