The Investment Working Group meeting heralds a new era for India-Saudi Arabia trade relations
RIYADH: Trade and economic relations between India and Saudi Arabia have taken another step forward after the formation of the High Investment Working Group of these countries earlier this week.
The body was launched in 2023 when Saudi Arabia's Crown Prince Mohammed bin Salman visited the Asian country – 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 task force was held virtually on July 28 and was co-chaired by Saudi 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 country as it seeks to attract capital from the kingdom.
“Constructive discussions were held on various opportunities for bilateral investments in various areas in the public and private sectors, including refineries and petrochemical plants, new and renewable energy, electricity, telecommunications, innovation, etc.,” the Indian Prime Minister's Office said in a statement. High level working group meeting
In the continuation of this statement, it is stated that a powerful delegation headed by the oil minister of this country will travel to Saudi Arabia to follow up negotiations on mutually beneficial investment 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 also invited the Saudi 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, center, and Indian President Narendra Modi at a ceremonial reception in 2019. (AFP)
India and Saudi Arabia: A History of Long-Term Relations
Although India and Saudi Arabia have strong economic and trade ties 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, which elevated the bilateral relationship to a strategic partnership between both countries.
Later, Modi's visit to Saudi Arabia in 2016 captured the spirit of enhanced cooperation in political, economic, security and defense fields between Riyadh and New Delhi.
When the Crown Prince visited India in 2023, on the sidelines of the G20 Summit and to co-chair the first India-Saudi Arabia Strategic Cooperation Council Leaders' Meeting, both countries signed eight agreements in several areas including energy, banking. and investment as well as production, cooperation in archiving, anti-corruption and water desalination.
Apart from growing economic and trade ties, India and Saudi Arabia also share strong emotional and cultural ties with each other, and the kingdom is a favorite destination for Indian talent and religious tourists.
Data from the Indian embassy in Riyadh shows that more than 2.65 million Indians live in Saudi Arabia, acting as a “living bridge between the two countries”.
The embassy also added: Cultural cooperation between India and Saudi Arabia has expanded in recent years in new fields of cinema and entertainment, sports activities such as cricket and football, and tourism exchange.
Latest trade statistics between Saudi Arabia and India
According to information from 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 Consulate General of India also acknowledges that Saudi Arabia is not just 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.”
Saudi Arabia's exports to India totaled 113.35 billion rupees ($30.20 billion) in 2023, while the country's imports to the Asian country totaled SR 43.57 billion, data from the General Statistics Office showed.
In 2023, Saudi Arabia was the third largest exporter of crude oil to India with 39.5 million tonnes, accounting for 16.7% of the country's total oil imports.
Another report released by GASTAT in July noted that the value of Saudi Arabia's outbound shipments to India in May was SR 8.03 billion.
In terms of non-oil exports, the Kingdom exported goods worth SR 2.23 billion in May, with chemical products and its allies leading the way with shipments worth SR 1.27 billion.
Saudi Arabia also exported plastic and rubber products to India worth Rs 448 million in the same month, while exports of base metals were SR 347.8 million.
On the import side, shipments worth SR 3.54 billion from India arrived in Saudi Arabia in May.
Mechanical equipment and electrical appliances were the most imported goods from India to the Kingdom in May with a total of 886.1 million rupees.
In the same month, India exported chemicals and allied products worth Rs 470.4 million, followed by vegetable products and base metals at SR 580.3 million and SR 342.2 million, respectively.
Developments in the tourism sector
In addition to trade relations, India and Saudi Arabia also have strong relations in the tourism sector.
According to the Saudi Tourism Organization, more than 1.5 million Indian tourists visited the country in 2023, representing a 50 percent increase over the previous year.
In an effort to increase the number of Indian tourists visiting the Kingdom, 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.
More than 170,000 Indian pilgrims performed the Hajj in 2024, up from 139,000 and 57,000 in 2023 and 2022, respectively, data from India's Ministry of External Affairs showed.
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 to cities in Saudi Arabia, including Riyadh, Jeddah and Dammam.
Saudi Arabia's growth as a global tourism destination is boosted by the kingdom's mega projects such as NEOM, along with developments in the surrounding areas of Alola, Direya and the Red Sea.
India is also emerging as a favorite destination for tourists from Saudi Arabia.
A report published by travel app Wego in July showed that Saudi Arabia emerged as the top five sources of travelers from the Middle East region to India.
The analysis indicated that Riyadh to New Delhi and Riyadh to Lucknow routes were the most popular among Middle Eastern travelers in the first half of this year.
“The findings show a dynamic travel landscape where India is a key destination for leisure and business travelers from around the world, driven by various factors such as tourism, business investments and family connections,” said Bernard Correa, Managing Director, Wego India. » note book.
