Investment Task Force Meeting Heralds New Era for India-Saudi Trade Relations
RIYADH: Trade and economic relations between India and Saudi Arabia have taken another step forward after the inaugural High Level Investment Working Group was held earlier this week.
The organization was launched in 2023 when the Kingdom's Crown Prince Mohammed bin Salman paid an official visit to the Asian country – a visit that came four years after he pledged to invest $100 billion in India during a trip to New Delhi.
The first meeting of the task force was held virtually on July 28 under the co-chairs of Saudi Energy Minister Prince Abdulaziz bin Salman and PK Mishra, Principal Secretary to Indian Prime Minister Narendra Modi.
During the conversation, India invited Saudi Arabia's sovereign wealth fund to set up an office in the Asian country as it seeks to attract funds from the Kingdom.
“Constructive discussions were held on various opportunities for bilateral investment in various areas of the public and private sectors, including refineries and petrochemicals, new and renewable energy, energy, telecommunications, innovation, among others,” the Prime Minister's Office said in a statement. of India after the session ended. high-level task force meeting.
The statement also states that an authorized delegation headed by the country's oil minister will visit Saudi Arabia for further discussions on mutually beneficial investments in the oil and gas sector.
Both countries also agreed to regular consultations between their technical teams to advance discussions and reach agreement on specific investments.
India has also invited Saudi Arabia's 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 (centre) and Indian leader Narendra Modi at a reception in 2019. (AFP)
India and Saudi Arabia: A history of long-standing relations
Although India and Saudi Arabia have maintained strong economic and trade relations since 1947, their bilateral ties 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 the two countries.
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 co-chaired the first meeting of the leaders of the India-Saudi Strategic Partnership Council, the two countries signed eight agreements in several areas, including energy, banking, and investment, as well as manufacturing, archive cooperation, anti-corruption and water desalination.
Apart from growing economic and trade ties, India and Saudi Arabia also share strong emotional and cultural ties, with the Kingdom being the most sought-after destination for Indian talent and religious tourists.
Data from the Indian Embassy in Riyadh revealed that there are over 2.65 million Indians living in Saudi Arabia, who are a “living bridge between the two countries”.
The embassy also added that cultural cooperation between India and Saudi Arabia has also been expanding in recent years in the new areas of film and entertainment, sports events such as cricket and football, and tourism exchange.
Latest trade statistics between Saudi Arabia and India
According to the Consulate General of India in Jeddah, Saudi Arabia is the Asian country's fourth-largest trading partner, while India is the Kingdom's second-largest trading partner.
The Consulate General of India also recognizes that Saudi Arabia is not only a trading partner, but also a “mainstay of its energy security and an important economic partner for investment, joint ventures and transfer of technology projects”.
Data from the General Statistics Office shows that Saudi Arabia's exports to India in 2023 totaled SR 113.35 billion ($30.20 billion), while the Kingdom's imports to the Asian nation totaled SR 43.57 billion.
In 2023, Saudi Arabia was the third largest exporter of crude oil to India at 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 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 chemical and allied products leading the chart with shipments of SR 1.27 billion.
In the same month, Saudi Arabia also exported plastic and rubber products to India worth a total of SR 448 million, while shipments of base metals amounted to SR 347.8 million.
On the import side, shipments from India worth SR 3.54 billion reached Saudi Arabia in May.
Mechanical equipment and electrical appliances were the most imported goods from India to the Kingdom 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 base metals worth SR580.3 and SR342.2 million, respectively.
Events in the field of tourism
Apart from trade relations, India and Saudi Arabia also have strong ties in the field of tourism.
According to the Saudi Tourism Authority, more than 1.5 million Indian tourists visited the Kingdom in 2023, a 50 percent increase from the previous year.
In a bid to increase the number of Indian tourists visiting the Kingdom, STA organized 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 visitors from India over the next seven years.
Data from India's Ministry of External Affairs shows that over 170,000 Indian pilgrims have performed Haj in 2024, a significant increase from 139,000 and 57,000 in 2023 and 2022, respectively.
Air traffic between Saudi Arabia and India has also increased by 31 percent between 2019 and 2023. Flights now connect 12 major hubs in India with cities in Saudi Arabia, including Riyadh, Jeddah and Dammam.
Saudi Arabia's growth as a global tourist destination is fueled by the Kingdom's megaprojects such as NEOM, as well as the development of areas around Alula, Diriyah and the Red Sea.
India is also becoming a favorite destination for tourists from Saudi Arabia.
A report published by travel app Wego in July revealed that Saudi Arabia was among the top five countries for travelers from the Middle East to India.
The analysis noted that routes from Riyadh to New Delhi and Riyadh to Lucknow were the most popular among travelers in the Middle East in the first half of this year.
“The data shows a dynamic travel landscape where India remains a key destination for both leisure and business travelers from around the world, driven by various factors such as tourism, business ventures and family connections,” said Bernard Carraya, General Manager Wego India. office.
