India Saudi Arabia Trade
India Saudi Arabia Trade Agreement
Introduction
India and Saudi Arabia enjoy cordial and friendly relations reflecting old economic and socio-cultural ties. During the FY22 (Apr-Dec), India’s imports from Saudi Arabia were valued at US$ 22.65 billion and exports to Saudi Arabia were worth US$ 6.63 billion. Major export from India to Saudi Arabia include engineering goods, rice, petroleum products, chemicals, textiles, food products, and ceramic tiles.
India-Saudi Arabia Trade.
- Saudi Arabia is India’s 4th largest trading partner.
- More than 18% of India’s crude oil imports are sourced from Saudi Arabia.
- In FY 2021-22, bilateral trade between India and Saudi Arabia stood at US$ 42.8 billion.
- Saudi Arabia occupies the 18th position in FDI equity inflows into India with a cumulative FDI amount of US$ 3,154 million from April 2000 – September 2022.
- The 2.6 million-strong Indian community in Saudi Arabia is the largest expatriate community in the Kingdom and is the ‘most preferred community’ due to their expertise, sense of discipline, law-abiding, and peace-loving nature.
- Saudi Arabia plays an important role in India’s energy security while India is a vital partner in Saudi Arabia’s food security.
- In 2021-22, Saudi Arabia was the second-largest source of hydrocarbon imports for India
Major exported items from India to Saudi Arabia with amount & quantity
- India exported 4,546 commodities to Saudi Arabia in FY 2021-22.
- India’s export to Saudi Arabia stood at US$ 3.08 billion in FY 2021-22.
- Major exported items from India to Saudi Arabia include minerals fuels, mineral oils & products, bituminous substances, and mineral waxes (US$ 1,089.30 million); followed by organic chemicals (US$ 595.71 million) in FY 2021-22.
- India’s export to Saudi Arabia stood at US$ 6.9 billion from April-November 2022.
- Major exported items from India to Saudi Arabia include petroleum products (US$ 1,542 million) followed by organic chemicals (US$ 703 million) etc. from April-November 2022.
Major imported items by India from Saudi Arabia with amount & quantity
- Major imported items by India from Saudi Arabia with amount & quantity
- India’s imports from Saudi Arabia stood at US$ 34.1 billion in FY 2021-22.
- Major items imported by India from Saudi Arabia include minerals fuels, mineral oils & products, bituminous substances, and mineral waxes (US$ 24,449.39 million); followed by fertilizers (US$ 1,894.64 million) in FY 2021-22.
- India’s imports from Saudi Arabia stood at US$ 29.09 billion from April-November 2022.
- Major imported items by India from Saudi Arabia include petroleum: crude (US$ 20,657 million) followed by petroleum products (US$ 2,813 million) etc. from April-November 2022.
Economic Relations and Investments
Saudi Arabia is the 17th largest investor in India with an investment value reaching to US$ 3.13 billion (March 2021). Major Saudi investment groups include ZAMIL, ARAMCO, SABIC, E-holidays, and Al Batterjee Group. In addition to this, Soft Bank’s ‘Vision Fund’ has invested in Indian startups such as Delhivery, FirstCry, Grofers, Ola, OYO, Paytm, and PolicyBazaar. On the other hand, major Indian companies and corporate groups such as TCS, L&T, TCIL, TATA, Wipro, Shapoorji & Pallonji, etc. are keeping a strong foot in Saudi Arabia.
It is noteworthy that the bilateral trade in the fiscal year 2021-2022 stood at US$ 42.8 billion, and the kingdom alone accounts for 18% of India’s energy import, which reflects the significance of the country from the standpoint of New Delhi’s energy and economic security calculus.
Major proposed investments include the US$ 44 billion ‘West Coast Refinery & Petrochemicals Project’ in Maharashtra, which is being jointly built by Saudi Aramco, Abu Dhabi National Oil Company, and an Indian consortium.
Recent Trends & developments
- On IDY 2021, an MoU was signed between the Saudi Ministry of Sports and India’s Ministry of AYUSH on Yoga Cooperation. It paved the path for the introduction of formal Yoga standards and courses in the Kingdom, marking the first time such standards were implemented by any country in the Gulf region.
- India and Saudi Arabia are recently in talks to sign a Mutual Legal Assistance Treaty (MLAT) to obtain formal assistance from each other in investigations related to criminal cases.
- External Affairs Minister Mr. S. Jaishankar held a meeting with the Gulf Cooperation Council (GCC) Secretary-General, Mr. Nayef Falah Mubarak Al-Hajraf during which the two leaders signed an MoU on the mechanism of consultations between India and the six-nation regional bloc.
- On 25th August 2022, Samvardhana Motherson International Limited (SAMIL) signed a Memorandum of Understanding (MoU) with the Ministry of Investment, Kingdom of Saudi Arabia (MISA). The partnership aims to identify investment development opportunities for industrial and service activities in the Kingdom of Saudi Arabia (KSA). the MoU will encourage joint cooperation by SAMIL and MISA in the development of the automotive parts industry in the Kingdom of Saudi Arabia (KSA).
- In November 2022, looking at the strong relations and strategic partnership between the Kingdom of Saudi Arabia and India, the Kingdom decided to exempt Indian nationals from submitting a Police Clearance Certificate (PCC).
- Both countries are exploring the possibility of starting a rupee-riyal trade mechanism as part of efforts to boost economic ties between the nations. Besides that, they are also discussing avenues of trade diversification and expansion, removal of trade barriers, and fast-tracking authorization and marketing of Indian pharma products in Saudi Arabia.
Conclusion
The two countries hold bilateral engagements in sectors like defence, investments, strategy, security, science and technology, and education alongside trade, energy, and Diaspora factors. In order to realize the full potential of their commercial relations in multitude and magnitude, the two countries are now focusing on the diversification of bilateral trade ties beyond the conventional field of oi. The aim is to explore opportunities in novel areas such as tourism, renewable energy, housing, health, entertainment, etc.
Contacts
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Embassy of India, Saudi Arabia
Address: B-1, Diplomatic Quarter, P.O.Box No. 94387, Riyadh- 11693, Saudi Arabia
Telephone: 00-966-11-4884144
Officials
Dr. Ausaf Sayeed (Ambassador)
Ms. Ritu Yadav - Second Secretary (Economic & Commerce) - com.riyadh@mea.gov.in
Mr. Muhammed Shabeer K - Second Secretary (Political, AKAM & Education) - edu.riyadh@mea.gov.in
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Embassy of Saudi Arabia, India
Address: EP 30, Chandragupta Marg, Chanakyapuri, New Delhi, Delhi 110021
Telephone: +011 2410 2000
Email : emb@rusembassy.in
Officials
Dr. Saud Mohammed Alsati – Ambassador
Mr. Saad Zafer Alqarni – Mission’s Head - INCON@MOFA.GOV.SA
Partners
