About Us India-Saudi Arabia Business Relations

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 Prime Minister Shri. Narendra Modi to the Kingdom in 2016 and 2019 and the State visit of Crown 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. Trade: Saudi Arabia is India’s fourth largest trade partner (after USA, China and UAE) and a major source of energy as India imports around 18% of its crude oil requirement and ~22 % of its LPG requirement from the Kingdom. In FY 2021-22, bilateral trade was valued at US $42.8billion. During this period, India’s imports from Saudi Arabia reached US $34.01billion and exports to Saudi Arabia were worth US$ 8.76 billion registering an increase of 49.5% over last year. Total trade with Saudi Arabia accounted for 4.14% of India’s total trade in FY 2021-22.

S.No. 

\Year 

2017-2018 

2018-2019 

2019-2020 

2020-2021 

2021-2022 

1. 

EXPORT 

5,410.70 

5,561.72 

6,236.86 

5,856.61 

8,758.94 

2. 

%Growth

 

2.79 

12.14 

-6.10 

49.56 

5. 

%Share  in India’s total exports

1.78 

1.68 

1.99 

2.01 

2.08 

6. 

IMPORT 

22,069.96 

28,479.21 

26,857.37 

16,186.76 

34,100.58 

7. 

%Growth

 

29.04 

-5.69 

-39.73 

110.67 

10. 

%Share in India’s total imports

4.74 

5.54 

5.66 

4.10 

5.57 

11. 

TOTAL TRADE 

27,480.66 

34,040.93 

33,094.24 

22,043.37 

42,859.52 

12. 

%Growth

 

23.87 

-2.78 

-33.39 

94.43 

 


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

5.  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.

6. Investments: Indian investments in the Kingdom of Saudi Arabia have spiked in the recent years and have crossed USD 2 Billion. These investments are dispersed in 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. Further, in May 2016, Wipro Arabia, a subsidiary of Wipro limited, signed a joint venture with Princess Nourah University, the largest women’s university in the world, to establish the Kingdom’s first all-women business & Technology Park.


7. Saudi Investments in India: Saudi Arabia is the 17th largest investor in India with investments amounting to $3.13 billion (March 2021). 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. 

During his visit to India in February 2019, Saudi Crown Prince 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. In this reference, Ministry of Finance signed a MoU with the Saudi Ministry of Energy, Industry and Mineral Resources in February 2019 to invest in India’s National Investment and Infrastructure Fund Limited (NIIF). Subsequent to the Framework Agreement signed between Invest India and SAGIA in February 2019, the Invest India Team has visited the Kingdom multiple times and held kingdom wide interactions with the major players in the Kingdom in diversified sectors.

9. Sector-wise Collaboration: 

a.)  Hydrocarbons: Saudi Arabia plays an important role in India’s energy security, as it is India’s one of the largest largest source of crude oil and LPG. In FY21-22, India’s oil imports from the Kingdom (Apr-Dec) amounted to 26.2 MMT (16.4% of total). Crude oil Imports in Million Metric Tonne (MMT) from Saudi Arabia in the last few years are as follows:

 

Year

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-22

(Apr-Dec)

Import in MMT

39.31

34.75

39.59

39.34

36.16

39.8

42.20

34.20

26.91

% of Total

20.82

18.85

20.46

19.34

18.0

17.56

19.10

18.20

16.47

Value in US $ (billion)

30.96

21.93

13.49

13.67

15.26

21.38

20.35

10.75

Saudi petrochemical giant SABIC set up its R&D Centre in Bangalore with an investment of over US $100 million in 2013. Saudi Aramco and UAE’s ADNOC are jointly participating in the development of US $44 billion ‘West Coast Refinery & Petrochemicals Project Limited’ in Maharashtra. Saudi Aramco has signed an MoU with the Mumbai based GumPro to set up a drilling fluids facility in 2018. In August 2019, it was announced that Saudi Aramco plans to acquire 20% share in the Reliance Industries Limited’s Oil and Chemical business at an enterprise value of US $15 billion. As Saudi Arabia is looking for investment opportunities, India has invited the Kingdom to participate in the Strategic Petroleum Reserves (SPR) Program. Indian Public and private sector companies can get opportunities in different sectors of hydrocarbon like E & P, midstream, downstream, service sector and skill development.

b.)  Energy: Vision 2030 of KSA and India’s Energy policy synergistically look to shift from conventional sources to alternative renewable and clean sources of energy. Saudi Arabia is a member of International Solar Alliance and is a contributing to fulfill ISA’s mission. 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 KSA worth 600 Million in FY 2021-22. 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.

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. As purchase of agricultural lands by a foreign entity is not allowed, the Saudi Agricultural & Livestock Investment Company (SALIC), owned by Public Investment Fund is acquiring stakes in Indian exporter companies, for ensuring food security. SALIC has taken minority stake (33%) in LT foods -an Indian multinational rice brand. An FIEO delegation visited the Kingdom in June 2022. During the visit, the Mission organized B2B meetings for them in collaboration with the regional chambers of Riyadh, Jeddah and Dammam.

f.)  Pharmaceuticals: The two nations have not been able to realize the full potential of opportunities available in pharmaceutical sector owing to various rules existing in Saudi Arabia on import of pharmacy products. 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. 

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 May 2022, and held B2B meetings in Riyadh and Jeddah. They also met with MCIT and SDAIA officials.

k). 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. 

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Annexure I: Recent Ministerial Visits: 

Visitor

Date

Agenda

Shri. Bhupender Yadav, MoEF &CC

October 24-25, 2021

Middle East Green Initiative

Shri. Suresh Prabhu, G-20 Sherpa

March 11-12, 2020
December 4-5, 2019

G-20 Sherpa meeting & Meetings with Head of SIDF, SALIC, SAGIA

Mrs. Nirmala Sitharaman MoS (IC) Commerce 

February 22-23, 2020

G-20 Ministerial meeting

Shri. Dharmendra Pradhan Minister of Petroleum, Natural Gas & Steel

September 8, 2019

Bilateral meeting with Saudi Energy Minister and CEO of PIF

Shri Amitabh Kant, CEO, Niti Aayog

February 16-18, 2019

Bilateral visit on NITI- SCISP Dialogue

Shri. Arun Jaitley, Minister of Finance

February 18-19, 2018

India-Saudi Arabia 12th JCM

Shri. Dharmendra Pradhan Minister of Petroleum, Natural Gas & Steel

April 13-15, 2016

Vibrant Gujarat Summit 2017

Mrs. Nirmala Sitharaman MoS (IC) Commerce    

November 18-19, 2015

4th GCC Industrial Forum