About Us India-Saudi Economic and Commercial 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.E. King Abdullah’s visit to India) and Riyadh Declaration (signed in 2010 during the Prime Ministerial visit) emphasized on   energy cooperation between our two friendly countries. The Riyadh Declaration committed the two sides to a strategic partnership based on complementarity and interdependence, including meeting India’s crude oil supplies and identifying and implementing specific projects in the areas of new and renewable energy.

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 enclosed at Annexure I.

3.  Strategic Partnership Council is a holistic institution covering various sectors of cooperation, it will overarch the existing institutional mechanism of Joint Working Commission. The SPC has two pillars: i) Political-Security-Socio-Cultural (PSSC); and ii) Economy and Investment. EAM and the Saudi Foreign Minister will co-chair the Political-Security-Socio-Cultural (PSSC) pillar whereas the Economic pillar is to be co-chaired by Commerce & Industry Minister on Indian side and Energy Minister on Saudi side. There are several JWGs under the two pillars. A number of meetings at official level have taken place between the two sides in the last few months. Under the Economy and Investment pillar 4 JWG’s have been finalized 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 China, the USA and UAE) and a major source of energy as India imports around 18% of its crude oil requirement and 30 % of its LPG requirement from the Kingdom. In FY 2019-20, bilateral trade was valued at US $33.09 billion. During this period, India’s imports from Saudi Arabia reached US $26.84 billion and exports to Saudi Arabia were worth US$ 6.25 billion registering an increase of 12.18% over last year. Total trade with Saudi Arabia accounted for 4.23% of India’s total trade in FY 2019-20.


Imports from KSA

Exports to KSA

Total Trade

% increase in Total Trade

% increase in Imports

% increase in Exports




































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

5.  Major commodities of export from India to Saudi Arabia include rice, meat, electrical machinery and equipment, vehicles, mineral oils, organic chemicals, ceramic tiles, apparels. Whereas, major commodities of import for India from Saudi Arabia are crude oil, LPG, fertilizers, chemicals, plastic and products thereof, aluminium and its articles, iron and steel, cooper and its articles, raw hides and skin (other than fur skins) and leather etc.

India’s Export to Saudi Arabia (Top 10 items) – Value in million US$

S. No.




% Growth


Semi/wholly miled rice w/n polished/glazed  





Vehicles with spark-ignition internal combustion reciprocating piston engine of cylinder capacity>1000cc bt nt>1500cc  










Other petroleum oils and oils obtained from bituminous minerals etc  





Of a water absorption coefficient by weight not exceeding 0.5%  





Light oils and preparations:  





Of a water absorption coefficient by weight exceeding 10%  










Vehicles with spark-ignition internal combustion reciprocating engine of a cylinder capacity>1500 cc bt<=3000  





Line pipe used for oil or gas pipelines longitudinally submerged arc welded having external diameter >406.4mm  




India’s Import from Saudi Arabia  (Top 10 items) – Value in million US$

S. No.




% Growth


Petroleum oils and oils obtained from bituminous minerals crude  





Liquified butanes  





Diamonm hydrgnorthphospht  (Diamonm Phosphte)  





Liquified propane  





Other petroleum oils and oils obtaind from bituminous minerals etc  





Other unwrought forms  





Petroleum coke not calcined  










Anhydrous ammonia  





Aluminium waste and scrap  




[Source: Directorate General of Foreign Trade, Government of India]

6. Investments: According to Ministry of Investment of Saudi Arabia, there are 476 Indian companies, registered as joint ventures/100% owned entities, worth US $1.5 billion in the Kingdom as of March 2020. These licenses are for projects 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, Spice Jet etc. have established a robust presence in Saudi Arabia.
7. Saudi Investments in India: Saudi Arabia is the 21st largest investor in India with investments amounting to US $1.8 billion (as per DPIIT from April 2000 to Dec 2020). Major investment groups from KSA include ARAMCO, SABIC, ZAMIL, E-holidays and Al Batterjee Group. Saudi Sovereign Wealth Fund-backed Soft Bank’s ‘Vision Fund’ has invested several billion dollars in Indian Start-ups such as Delhivery, FirstCry, Grofers, Ola, OYO, Paytm and PolicyBazaar. Several Saudi Companies have invested in India through their non-Saudi subsidiaries. In June 2020, Saudi Arabia’s sovereign fund PIF (Public Investment Fund) has announced to invest US $1.5 billion in Jio Platforms, India’s leading telecommunication and digital services company. PIF will hold a 2.32% stake in Jio Platforms. PIF also announced an investment of approximately US$1.3 billion for an equity stake of 2.04% in Reliance Retail Ventures Limited (“RRVL”). Saudi Company Alfanar is also investing close to $600 Million in two 300 MW wind power projects in India.

There has been an upsurge in Indian investments in the Kingdom, especially after the signing of Bilateral Investment Promotion Agreement (BIPA) and Double Taxation Avoidance Agreement (DTAA) in 2006. Huge unrealized potential still remains in the field of Saudi investments in India. Saudi Crown Prince announced, during his visit to India in February, 2019, 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. 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). The workshop held by NITI Aayog & Saudi Centre for International Strategic Partnership in Riyadh on 17-18 February, 2019 identified 40 potential projects for investments. Subsequent to the Framework Agreement signed between Invest India and SAGIA in February, 2019, the Invest India Team 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 has consistently been one of the top suppliers of crude oil and gas over the years. India
imported 41.38 MMT of crude oil amounting to over US $ 20.3 billion in 2019-20

[Source: Directorate General of Foreign Trade, Government of India]

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 signed a 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, the Saudi side has been invited to participate in the Strategic Petroleum Reserves (SPR) Programme. 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. Also, Saudi Companies like Alfanar and Aljomaih are invested in India’s Wind and Solar Energy projects. Furthermore, both countries are collaboratively exploring Hydrogen Energy as a future source of energy.

c.)   Automotives & 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 an 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 for futuristic solutions

d.)   Textiles: India exported textiles and allied products to KSA worth 0.6 Billion in FY 2019-20. Textile processing projects and integrated garment parks, Investment in retail operations being operationalised in India present huge potential for increasing trade and investment in this sector. Other areas of collaboration in this sector include technology transfer, skill development and commercialization of handloom products.

e.)  Food Security: Saudi Arabia is looking at different ways to partner with India on the food-security front. Kingdom has identified India as the best destination to source commodities like Rice, Red Meat, Sugar, Infant Milk Powder, sea food etc. Both nations have taken cooperative steps to secure availability of agro-products in cases of emergency situations. 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, to secure agro-products in cases of emergency situations. SALIC has taken shares in LT foods -an Indian multinational rice brand under the name Daawat’ (US$ 17 million) and is currently in discussions with Allana Foods to take stakes in their abattoirs.

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 have been supporting each other to ensure continued flow of medicines and other pharmaceutical products.

g.)  Healthcare: The COVID-19 pandemic has also led to focus on healthcare sector.  Saudi authorities opened up the healthcare system for the Indian community and provided free healthcare during this difficult time. Under this cooperation, a total of 1777 Indian healthcare professionals have returned to Saudi Arabia so far to resume their duties to fight the Covid-19 pandemic. Currently, Indian Clinics are operational all across the Kingdom. Huge opportunity lies in terms of establishing major Indian hospital chains in Saudi Arabia.

h.)  ICT: Owing to COVID-19 and the changing realities of the world ICT sector withholds immense prospects of cooperation between the two sides. Several Saudi companies are looking at enhancing their virtual presence through application developments and also towards outsourcing 25 % of their operations outside the Kingdom (earlier 100 % operations was to be based in Kingdom). This would encourage more Indian Tier II ICT Companies to bid for projects in Saudi Arabia.  There is also scope for collaboration in the emerging technologies such as Artificial Intelligence, Robotics, automation which constitutes a keystone of Saudi Arabia’s ‘Vision 2030’.  Cyber-security is another area which holds immense potential for India-Saudi Arabia trade in services. The recently established National Cybersecurity Authority (NCA) is engaging with Indian entities for expertise sharing and training of Saudi professionals.

i.)  Defence: In line with Saudi Arabia’s efforts to diversify its partners for defence imports and defence joint production and collaboration, India presents itself as a reliable partner. For the first time, a delegation comprising Indian private companies attended the 4th Joint Committee on Defence Cooperation in Jan, 2019 and had discussions with Saudi entities of Saudi Arabian Military Industries (GAMI) and Saudi Arabian Military Industries (SAMI). Department of Defence Production signed a MoU with GAMI on the sidelines of PM’s visit to Riyadh in Oct, 2019 to explore possibilities of joint defence production and collaboration.

j.)  Construction Sector: Indian companies like LNT, Punj Loyd, Shapoorji Pallonji already have a huge presence in Saudi Arabia. Mega projects being planned by KSA like AlQiddiya, Red Sea Project and Neom city provide numerous opportunities for Indian companies in construction sector. Similarly India is emphatic on development of multi model connectivity infrastructure which presents window to Saudi companies and authorities for participating development of Indian construction sector.
k). New Thrust Areas of Cooperation: In order to realize the full potential of their commercial relations in multitude and magnitude the two side 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 & pharmaceuticals, food processing, fertilizers, engineering goods, mining etc. Both sides are keenly working towards enhancement of engagement along these lines.

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Annexure I: Recent Ministerial Visits:




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