The investment working group meeting heralds a new era for India-Saudi trade relations
RIYADH: Trade and economic relations between India and Saudi Arabia took another step forward after the high-level task force on investment was organized earlier this week.
The body was established in 2023 when the Kingdom's Crown Prince Mohammed bin Salman paid an official visit to the Asian nation – a visit that came four years after he pledged $100 billion worth of investment in India during a trip to New Delhi.
The first meeting of the working group was held virtually on July 28 and was co-chaired by Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman and PK Mishra, Principal Secretary to Indian Prime Minister Narendra Modi.
During the discussion, India invited Saudi Arabia's Public Investment Fund to set up an office in the Asian nation as it seeks to attract funds from the Kingdom.
“Constructive discussions were held on various bilateral investment opportunities in various public and private sectors, including refineries and petrochemicals, new and renewable energy, electricity, telecommunications, innovation, among others,” the prime minister's office said minister of India in a statement after the high-level task force meeting.
The statement also stated that an empowered delegation led by the country's petroleum secretary would visit Saudi Arabia for further discussions on mutually beneficial investments in the oil and gas sector.
Both countries also agreed to hold regular consultations between their technical teams to take forward discussions and reach agreement on specific investments.
India has also invited the Saudi energy minister to visit New Delhi for the next round of high-level task force meetings.
Crown Prince Mohammed bin Salman, Indian President Ram Nath Kovind, center, and Indian leader Narendra Modi at a ceremonial reception in 2019. (AFP)
India and Saudi Arabia: A Long History of Relationship
Even though India and Saudi Arabia have shared strong economic and trade relations since 1947, their bilateral relations took a new turn after the signing of the Delhi Declaration in 2006.
It was followed by the Riyadh Declaration in 2010 when the then Indian Prime Minister Manmohan Singh visited Saudi Arabia, elevating the bilateral relationship to a strategic partnership between both nations.
Later, Modi's visit to Saudi Arabia in 2016 captured the spirit of enhanced political, economic, security and defense cooperation between Riyadh and New Delhi.
When the Crown Prince visited India in 2023 on the sidelines of the G20 Leaders' Summit and to co-chair the first leaders' meeting of the India-Saudi Arabia Strategic Partnership Council, both countries signed eight agreements in several areas, including energy, banking sector. , and investment, as well as production, archival cooperation, anti-corruption and water desalination.
Apart from growing economic and trade ties, India and Saudi Arabia also share a strong emotional and cultural relationship, with the Kingdom being the most sought-after destination for Indian talent and religious tourists.
Data from the Indian embassy in Riyadh showed that more than 2.65 million Indians live in Saudi Arabia, which acts as “a living bridge between the two countries”.
The embassy also added that India-Saudi Arabia cultural cooperation has also expanded into new areas of cinema and entertainment, sports activities like cricket and football and tourism exchanges in recent years.
Latest trade statistics between Saudi Arabia and India
According to data from the Consulate General of India in Jeddah, Saudi Arabia is the fourth largest trading partner of the Asian country, while India is the second largest trading partner of the Kingdom.
The Consulate General of India also acknowledges that Saudi Arabia is not just a trade partner, but a “major pillar for its energy security and an important economic partner for investments, partnerships and technology transfer projects”.
Data from the General Statistics Authority shows that Saudi Arabia's exports to India in 2023 amounted to SR 113.35 billion ($30.20 billion), while the Kingdom's imports to the Asian nation amounted to 43.57 SR billions.
In 2023, Saudi Arabia was the third largest exporter of crude oil to India, totaling 39.5 million tonnes, accounting for 16.7% of the country's total oil imports.
Another report released by GASTAT in July noted that Saudi Arabia's outbound shipments to India were worth SR8.03 billion in May.
In terms of non-oil exports, the Kingdom exported goods worth SR 2.23 billion in May, with chemicals and related products topping the list with shipments valued at SR 1.27 billion.
Saudi Arabia also exported plastic and rubber products to India totaling SR 448 million in the same month, while shipments of base metals accounted for SR 347.8 million.
On the import side, shipments worth SR 3.54 billion from India reached Saudi Arabia in May.
Mechanical equipment and electrical appliances were the most imported goods from India to the Kingdom in May, totaling SR 886.1 million.
In the same month, India exported chemicals and allied products worth SR 470.4 million, followed by vegetable products and base metals with SR 580.3 million and SR 342.2 million respectively.
Developments in the tourism sector
Apart from trade relations, India and Saudi Arabia also have strong ties in the tourism sector.
More than 1.5 million Indian tourists visited the Kingdom in 2023, a 50 percent increase from the previous year, according to the Saudi Tourism Authority.
In a bid to increase the number of Indian tourists visiting the Kingdom, STA held networking events in Mumbai, Ahmedabad, Bengaluru and Delhi and interacted with tourism trade associations in February.
STA, as part of its broader tourism strategy, aims to attract 7.5 million Indian visitors over the next seven years.
Data from the Indian Ministry of External Affairs shows that over 170,000 Indian pilgrims performed Hajj in 2024, marking a significant increase from 139,000 and 57,000 in 2023 and 2022, respectively.
Air connectivity between Saudi Arabia and India has also increased by 31% between 2019 and 2023. Flights now connect 12 major hubs in India with Saudi cities, including Riyadh, Jeddah and Dammam.
Saudi Arabia's growth as a global tourism destination is fueled by the Kingdom's mega-projects such as NEOM, along with developments in the areas around Alula, Diriyah and the Red Sea.
India is also becoming a favorite destination for tourists from Saudi Arabia.
A report released by travel app Wego in July revealed that Saudi Arabia emerged as the top five sources of travelers from the Middle East region to India.
The analysis noted that routes from Riyadh to New Delhi and Riyadh to Lucknow were the most popular among Middle Eastern travelers in the first half of this year.
“The findings suggest a dynamic travel landscape where India remains a key destination for both leisure and business travelers across the globe, driven by various factors such as tourism, business and family connections,” said Bernard Corraya, Managing Director, Wego India. office.
