The meeting of the investment group heralds a new era in trade relations between India and Saudi Arabia
RIYADH: Trade and economic relations between India and Saudi Arabia took another step forward after the inaugural High Level Working Group on Investment was held earlier this week.
The body was set up in 2023 when the kingdom's Crown Prince Mohammed bin Salman made an official visit to the Asian nation — a visit that came four years after he pledged $100 billion in investment in India during a trip to Delhi.
The first meeting of the working group was held virtually on July 28 and was co-chaired by 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 Public Investment 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 in the public and private sectors, including refineries and petrochemicals, new and renewable energy, energy, telecommunications, innovation, among others,” the Indian Prime Minister's Office said in a statement after the meeting high-level working groups.
The statement further said that an empowered delegation led by the country's petroleum minister would visit Saudi Arabia for follow-up discussions 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 agreement on specific investments.
India also invited Saudi Arabia's energy minister to visit New Delhi for another 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 gala reception in 2019. (AFP)
India and Saudi Arabia: A History of Long-Term Relations
Although India and Saudi Arabia have shared strong economic and trade ties 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 then Indian Prime Minister Manmohan Singh visited Saudi Arabia and elevated the bilateral relationship to a strategic partnership between the two nations.
Later, Modi's visit to Saudi Arabia in 2016 captured the spirit of enhanced political, economic, security and defense cooperation between Riyadh and Delhi.
When the crown prince visited India in 2023, on the sidelines of the G20 leaders' summit and to co-chair the first India-Saudi Strategic Partnership Council leaders' meeting, the two countries signed eight agreements in several areas including energy and banking. , 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 revealed that there are more than 2.65 million Indians living in Saudi Arabia, acting as 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 new areas of cinema and entertainment, sports activities such as cricket and football, and in the field of tourism.
Latest trade statistics between Saudi Arabia and India
According to data from 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 acknowledges that Saudi Arabia is not only a trading partner, but “a main pillar for its energy security and an important economic partner for investment, joint ventures and transfer of technology projects”.
Data from the General Authority for Statistics reveals that Saudi Arabia's exports to India in 2023 were SR113.35 billion ($30.20 billion), while the kingdom's imports to the Asian country were SR43.57 billion.
In 2023, Saudi Arabia was the third largest oil exporter 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 said 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 SR2.23 billion in May, with chemical and allied products leading the way with shipments worth SR1.27 billion.
Saudi Arabia also exported plastic and rubber products to India totaling SR448 million in the same month, while outbound shipments of base metals accounted for SR347.8 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 SR886.1 million.
In the same month, India exported chemical and allied products worth SR470.4 million, followed by vegetable products and base metals at SR580.3 million and SR342.2 million.
Developments in the tourism sector
Apart from trade relations, India and Saudi Arabia also share strong ties in the tourism sector.
More than 1.5 million Indian tourists visited the kingdom in 2023, a 50 percent increase compared to the previous year, according to the Saudi Tourism Authority.
In an effort to increase the number of Indian tourists visiting the Kingdom, STA organized networking events in Mumbai, Ahmedabad, Bengaluru and Delhi and collaborated with tourism associations in February.
STA, as part of its broader tourism strategy, aims to bring in 7.5 million Indian visitors over the next seven years.
Data from India's Ministry of External Affairs reveals that more than 170,000 Indian pilgrims performed 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 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 tourism destination is fueled by the kingdom's giga-projects such as NEOM, along with developments in the areas around Alula, Diriyah and the Red Sea.
India is also becoming a popular destination for tourists from Saudi Arabia.
A report published 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 travelers in the Middle East in the first half of this year.
“The findings indicate a dynamic travel landscape where India remains a key destination for both leisure and business travelers from around the world due to various factors such as tourism, business activities and family connections,” said Bernard Corraya, CEO of Wego India. office.
