Investment Working Group meeting marks new era of India-Saudi Arabia trade relations
RIYADH: India-Saudi Arabia trade and economic ties took another step forward after the two countries convened a high-level working group on investment earlier this week.
The agency was set up in 2023 when Saudi Crown Prince Mohammed bin Salman makes an official visit to the Asian nation, a landmark visit four years after he pledged to invest $100 billion in India during his visit to New Delhi.
The first meeting of the working group was held online on July 30, co-chaired by Saudi Arabian Energy Minister Prince Abdulaziz bin Salman and Indian Prime Minister Narendra Modi's Secretary PK Mishra.
During the talks, India invited Saudi Arabia's Public Investment Fund to set up an office in the Asian country as it looks to attract capital from Saudi Arabia.
“Constructive discussions were held on opportunities for bilateral investment in various areas of public and private sectors, including oil refining and petrochemicals, new and renewable energy, power, telecommunications, innovation, among others,” the Indian Prime Minister’s Office said in a statement after the high-level working group meeting.
The statement also said that an authorized delegation led by the country's Petroleum Secretary will visit Saudi Arabia to discuss follow-up on mutually beneficial investments in the oil and gas sector.
The two countries also agreed to hold regular consultations between their technical teams to advance discussions and reach agreements on specific investments.
India also invited the Saudi energy minister to visit New Delhi for the next round of the high-level working group meeting.
Crown Prince Mohammed bin Salman, Indian President Ram Nath Kovind (C) and Indian Prime Minister Narendra Modi at a reception in 2019. (AFP)
India and Saudi Arabia: A Long History of Relations
Although India and Saudi Arabia have had strong economic and trade relations since 1947, their bilateral relations took a new turn after the signing of the Delhi Declaration in 2006.
This was followed by the Riyadh Declaration in 2010 when then Indian Prime Minister Manmohan Singh visited Saudi Arabia, upgrading bilateral ties to a strategic partnership between the two countries.
Later, Modi's visit to Saudi Arabia in 2016 reflected the growing spirit of cooperation in politics, economy, security and defence between Riyadh and New Delhi.
When the crown prince visited India in 2023, while attending the G20 summit and co-chairing the first leaders' meeting of the India-Saudi Arabia Strategic Cooperation Council, the two countries signed eight agreements in areas such as energy, banking and investment, as well as manufacturing, documentation cooperation, anti-corruption and water desalination.
Apart from growing economic and trade ties, India and Saudi Arabia share strong emotional and cultural ties, with the kingdom being the most sought-after destination for Indian talent and religious tourists.
According to data from the Indian embassy in Riyadh, there are more than 2.65 million Indians living in Saudi Arabia, which acts as a “bridge between the two countries”.
The embassy also added that cultural cooperation between India and Saudi Arabia has also expanded in new areas such as film and entertainment, sports activities such as cricket and football, and tourism exchanges in recent years.
Latest trade statistics between Saudi Arabia and India
According to the Indian Consulate General in Jeddah, Saudi Arabia is the Asian country's fourth-largest trading partner, while India is the kingdom's second-largest trading partner.
The Indian Consulate General also acknowledged Saudi Arabia as not only a trading partner but also “a pillar of energy security and a key economic partner for investment, joint ventures and transfer of technology projects.”
Saudi Arabia's exports to India in 2023 were worth SAR113.35 billion ($30.2 billion), while Saudi Arabia's imports to the Asian nation were worth SAR43.57 billion, according to data from the National Bureau of Statistics.
In 2023, Saudi Arabia was the third largest exporter of crude oil to India, with 39.5 million tons, accounting for 16.7 percent of the country's total oil imports.
Another report released by GASTAT in July said Saudi Arabia's exports to India were worth 8.03 billion riyals in May.
In terms of non-oil exports, Saudi Arabia exported goods worth 2.23 billion riyals in May, with chemicals and related products leading the list with 1.27 billion riyals.
In addition, Saudi Arabia exported plastic and rubber products to India worth a total of 448 million riyals in the same month, while base metal exports were worth 347.8 million riyals.
On the import side, goods worth SAR3.54 billion from India arrived in Saudi Arabia in May.
Machinery and electrical equipment were the top imported goods from India to the Kingdom in May, with a total value of SAR 886.1 million.
In the same month, India exported chemical and related products worth 470.4 million riyals, followed by vegetable products and basic metals at 580.3 million riyals and 342.2 million riyals, respectively.
Tourism development
Apart from trade relations, India and Saudi Arabia also have strong ties in the tourism sector.
More than 1.5 million Indian tourists are set to visit the kingdom in 2023, up 50 per cent from the previous year, according to the Saudi Arabian Tourism Authority.
To boost the number of Indian tourists visiting the Kingdom, STA is organising networking events in Mumbai, Ahmedabad, Bengaluru and Delhi, as well as meeting with travel trade associations in February.
STA is part of a broader tourism strategy that aims to attract 7.5 million Indian tourists over the next seven years.
Data from India's Ministry of External Affairs revealed that over 170,000 Indian pilgrims are expected to perform the Hajj in 2024, a significant increase from 139,000 and 57,000 in 2023 and 2022 respectively.
Air connectivity between Saudi Arabia and India has increased by 31 per cent between 2019 and 2023. Flights now connect 12 major hubs in India with Saudi cities such as Riyadh, Jeddah and Dammam.
Saudi Arabia’s growth as a global tourism destination has been fueled by major Saudi projects such as NEOM, along with developments in the areas surrounding Al-Aula, Diriyah and the Red Sea.
India is emerging as a popular destination for tourists from Saudi Arabia.
A report released by travel app Wego in July revealed that Saudi Arabia was the fifth-largest source of Middle Eastern travelers to India.
The analysis found that routes from Riyadh to New Delhi and Riyadh to Lucknow were the most popular routes among Middle Eastern travellers in the first half of this year.
“These findings highlight a changing travel landscape, with India remaining a key destination for both leisure and business travellers from across the world, driven by factors such as tourism, joint ventures and family ties,” said Bernard Corraya, General Manager, Wego India Office.
