India and Saudi Arabia share centuries old
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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 side-lines of H.E. King Abdullahs
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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 side-lines 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 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, the two sides signed 11 other MoUs in the major fields. 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.<br>
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, the two sides signed 11 other MoUs in the major fields. 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.<br>
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TRADE & GROWTH Saudi Arabia is India’s fourth largest trade partner 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.<br>
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India’s Export to Saudi Arabia Top products Imported to Saudi Arabia from India Food Products Automobile Petroleum Products Ceramic Products Other Products<br>
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Other Products Value in million US$ MORE DETAILS<br>
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Major Saudi Investors 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<br>
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<br>
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Sector-wise Collaboration Hydrocarbons Food Security Pharmaceuticals Healthcare ICT Energy Construction Sector New Thrust Areas of Cooperation Defence Automotive & Machinery Textiles<br>
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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 $ 20.4 billion in 2019-20.
. 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. BACK<br>
. 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 $15 billion
As Saudi Arabia is looking for investment opportunities, the Saudi side has been invited to participate in the Strategic Petroleum Reserves (SPR) Programme. Indian Public and private sector companies can get opportunities in different sectors of hydrocarbon like E & P, midstream, downstream, service sector and skill development. BACK<br>
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Food Security Saudi Arabia is looking at different ways to partner with India on the food-security front. Kingdom has identified India as the best destination to source commodities like Rice, Red Meat, Sugar, Infant Milk Powder, sea food etc.
Both nations have taken cooperative steps to secure availability of agro-products in cases of emergency situations.
As purchase of agricultural lands by a foreign entity is not allowed, the Saudi Agricultural & Livestock Investment Company (SALIC), owned by Public Investment
Fund is acquiring stakes in Indian exporter companies, to secure agro-products in cases of emergency situations.
SALIC has taken shares in LT foods -an Indian multinational rice brand under the name Daawat’ (US$ 17 million) and is currently in discussions with Allana Foods to take stakes in their abattoirs. BACK<br>
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. BACK<br>
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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. BACK<br>
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. BACK<br>
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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 establishing major Indian hospital chains in Saudi Arabia. BACK<br>
Currently, Indian Clinics are operational all across the Kingdom. Huge opportunity lies in establishing major Indian hospital chains in Saudi Arabia. BACK<br>
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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 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. BACK<br>
Several Saudi companies are looking at enhancing their virtual presence through application developments and 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. BACK<br>
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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 3rd 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 side-lines of PM’s visit to Riyadh in Oct 2019 to explore possibilities of joint defence production and collaboration. BACK<br>
Industries (GAMI) and Saudi Arabian Military Industries (SAMI). Department of Defence Production signed a MoU with GAMI on the side-lines of PM’s visit to Riyadh in Oct 2019 to explore possibilities of joint defence production and collaboration. BACK<br>
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Construction Sector The capital expenditure by the Saudi Government in the Kingdom’s infrastructure has led to several Indian Companies benefitting as sub-contractors.
Indian companies like LNT, Punj Lloyd, Shapoorji Pallonji already have a huge presence in Saudi Arabia. Mega projects being planned by KSA like Al Qiddiya, 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 in development of Indian construction sector. BACK<br>
Indian companies like LNT, Punj Lloyd, Shapoorji Pallonji already have a huge presence in Saudi Arabia. Mega projects being planned by KSA like Al Qiddiya, 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 in development of Indian construction sector. BACK<br>
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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 Al- Fanar and Al Jomaih are invested in India’s Wind and Solar Energy projects. Furthermore, both countries are collaboratively exploring Hydrogen Energy as a future source of energy. BACK<br>
Saudi Arabia is a member of International Solar Alliance and is a contributing to fulfill ISA’s mission. Also, Saudi Companies like Al- Fanar and Al Jomaih are invested in India’s Wind and Solar Energy projects. Furthermore, both countries are collaboratively exploring Hydrogen Energy as a future source of energy. BACK<br>
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Automotive & 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 BACK<br>
India and KSA have numerous collaborative opportunities in terms of joint ventures, development of auto hubs , R& D for futuristic solutions BACK<br>
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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 operationalized 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. BACK<br>
Other areas of collaboration in this sector include technology transfer, skill development and commercialization of handloom products. BACK<br>
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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.
For more details on Indian Economy and commercial relations please visit: www.indbiz.gov.in BACK<br>
For more details on Indian Economy and commercial relations please visit: www.indbiz.gov.in BACK<br>