The meeting of the Investment Working Group ushered in a new era in India-Saudi Arabia trade relations
RIYADH: Trade and economic ties between India and Saudi Arabia have taken another step forward as the countries' inaugural High-Level Task Force on Investment concluded 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 in investment in India during a visit to New Delhi.
The first meeting of the working group was held on July 28, virtually co-chaired by Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman and Indian Prime Minister Narendra Modi's Principal Secretary PK Mishra.
During the talks, 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 sectors of the public and private sectors including processing and petrochemical plants, new and renewable energy, energy, telecommunications, innovation,” said a statement issued by the Prime Minister's Office of India. High level working group meeting.
An authorized delegation led by the country's petroleum secretary will visit Saudi Arabia to monitor mutually beneficial investments in the oil and gas sector, the statement said.
Both the countries have also agreed to continue the discussions in regular consultations between their respective technical teams and to agree on specific investment issues.
India has also invited the Saudi energy minister to visit New Delhi for the next round of high-level working group meetings.
Crown Prince Mohammed bin Salman, Indian President Ram Nath Kovind, center, and Indian leader Narendra Modi at a formal reception in 2019. (AFP)
India and Saudi Arabia: A long history of relations
Although India and Saudi Arabia have had strong economic and trade ties since 1947, their bilateral relations took a new turn after the signing of the Delhi Declaration in 2006.
After the Riyadh Declaration in 2010, when the then Indian Prime Minister Manmohan Singh visited Saudi Arabia, the bilateral relationship between the two countries was elevated to a strategic partnership.
Later, Modi's visit to Saudi Arabia in 2016 captured the spirit of enhanced cooperation between Riyadh and New Delhi in the political, economic, security and defense sectors.
When the Crown Prince visited India in 2023, on the sidelines of the G20 Leaders' Summit and co-chaired the first leaders' meeting of the India-Saudi Arabia Strategic Partnership Council, the two countries signed eight agreements in various sectors including energy, banking. , and investment, as well as construction, archival support, anti-corruption and water desalination.
Apart from growing economic and trade ties, India and Saudi Arabia also share a strong emotional and cultural bond, with the state being the most sought-after destination for Indian talent and religious tourists.
Figures from the Indian Embassy in Riyadh show that over 265 million Indians live in Saudi Arabia, which acts as a “living bridge between the two countries”.
In recent years, India-Saudi Arabia cultural cooperation has also expanded into new areas of tourism exchange, such as cinema and entertainment, sporting activities such as cricket and football, the embassy said.
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 in Asia, while India is the kingdom's second largest trading partner.
The Consulate General of India also acknowledges that Saudi Arabia is not only a trading partner but also a “key pillar for energy security and an important economic partner for investment, joint ventures, and transfer of technology projects”.
Figures from the General Authority for Statistics show that Saudi Arabia's exports to India in 2023 were SR113.35 billion ($30.20 billion), while the kingdom's imports to the Asian nation were SR43.57 billion.
In 2023, Saudi Arabia was India's third largest crude exporter, with a volume of 39.5 million tonnes, accounting for 16.7 percent of the country's total oil imports.
Another report released by GASTAT in July noted that Saudi Arabia's outgoing shipments in May stood at SR8.03 billion.
In terms of non-oil exports, the state exported goods worth SR 2.23 billion in May, with chemical and allied products leading the chart with shipments worth SR1.27 billion.
Saudi Arabia also exported plastic and rubber products to India totaling SR448 million in the same month, while the outgoing shipment of base metals was SR347.8 million.
On the import side, shipments worth SR3.54 billion from India reached Saudi Arabia in May.
Mechanical equipment and electrical equipment were the most imported goods from India to the state in May, totaling SR886.1 million.
In the same month, India exported chemicals and allied products worth SR470.4 million, followed by vegetable products and basic metals worth SR580.3 million and SR342.2 million, respectively.
Development of tourism sector
Apart from trade relations, India and Saudi Arabia also have strong relations in the tourism sector.
According to the Saudi Tourism Authority, more than 1.5 million Indian tourists visited the kingdom in 2023, a 50 percent increase over the previous year.
To increase the number of Indian tourists visiting the state, STA organized networking events in Mumbai, Ahmedabad, Bengaluru and Delhi and interacted with travel 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.
According to Indian Ministry of External Affairs data, over 170,000 Indian pilgrims performed Hajj in 2024, compared to 139,000 and 57,000 in 2023 and 2022 respectively.
Air connectivity between Saudi Arabia and India has also increased by 31 percent 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 tourist destination is fueled by the kingdom's giga-projects such as NEOM, Alula, Diriyah and developments in the areas around the Red Sea.
India has also emerged as a favorite destination for tourists from Saudi Arabia.
A report released by travel app Wego in July showed Saudi Arabia as the top five source of travelers from the Middle East region to India.
The analysis noted that Riyadh to New Delhi and Riyadh to Lucknow were the most popular among Middle Eastern travelers in the first half of the year.
“The findings suggest a dynamic travel landscape where India has become a key destination for leisure and business travelers worldwide, driven by various factors such as tourism, business ventures and family connections,” said Bernard Coraya, General Manager, Wego India. office
