RIYADH: Trade and economic ties between India and Saudi Arabia have taken another step forward following the first high-level investment task force meeting between the two countries earlier this week.
The institution was established in 2023 during an official visit by Saudi Crown Prince Mohammed bin Salman, four years after he visited New Delhi and pledged $100 billion in investment in India.
The task force's first meeting was held virtually on July 30 and was co-chaired by Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman and Indian Prime Minister Narendra Modi's Principal Secretary PK Mishra.
During the talks, India requested Saudi Arabia's Public Investment Fund to set up an office in the Asian country, seeking to attract funds from the kingdom.
“Constructive discussions were held on a range of opportunities for bilateral investment in a range of sectors across public and private sectors, including refining and petrochemical plants, renewable energy, power, telecom and innovation,” the Prime Minister's Office said in a statement after the high-level task force meeting.
The statement also said an authorized delegation led by the country's oil minister will 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 technical teams to advance discussions and reach agreements on specific investments.
India has also invited Saudi Energy Minister to visit New Delhi to attend the next high-level task force meeting.
India and Saudi Arabia: A Long History of Relations
India and Saudi Arabia have enjoyed strong economic and trade relations since 1947, but relations between the two countries took a new turn after the signing of the Delhi Declaration in 2006.
In 2010, then Indian Prime Minister Manmohan Singh visited Saudi Arabia and signed the Riyadh Declaration, which elevated bilateral relations to a strategic partnership.
Subsequently, during Prime Minister Modi's visit to Saudi Arabia in 2016, there was a glimpse of the will between Riyadh and New Delhi to strengthen cooperation in the political, economic, security and defence sectors.
During the Crown Prince’s visit to India to attend the 2023 G20 Summit and co-chair the inaugural summit of the India-Saudi Arabia Strategic Partnership Council, the two countries signed eight agreements across a range of areas, including energy, banking, investment and manufacturing, cooperation in record keeping, anti-corruption and water desalination.
Apart from cooperation in the economic and trade sectors, India and Saudi Arabia share strong emotional and cultural ties, and the Kingdom is a popular destination for Indian talent and religious tourists.
According to the Indian Embassy in Riyadh, there are over 2.65 million Indians living in Saudi Arabia, who act as a “living bridge between the two countries”.
The embassy also added that cultural cooperation between India and Saudi Arabia has expanded in recent years into new areas such as film and entertainment, sports activities like cricket and football, and tourism exchanges.
Latest trade statistics between Saudi Arabia and India
According to data from the Indian Consulate General in Jeddah, Saudi Arabia is the country's fourth largest trading partner and India is its second largest trading partner.
The Indian Consulate General also acknowledges that Saudi Arabia is not just a trading partner but is also “a key pillar of energy security and an important economic partner for investment, joint ventures and technology transfer projects.”
According to data from the National Bureau of Statistics, Saudi Arabia's exports to India in 2023 amounted to 113.35 billion riyals ($30.2 billion), while imports from the country amounted to 43.57 billion riyals.
In 2023, Saudi Arabia was the third largest crude oil exporter to India, exporting 39.5 million tonnes, accounting for 16.7% of India's total crude oil imports.
Another report released by GASTAT in July said exports from Saudi Arabia to India reached SAR 8.03 billion in May.
In terms of non-oil exports, Saudi Arabia exported goods worth SR2.23 billion in May, with chemicals and related products topping the list with shipments worth SR1.27 billion.
Saudi Arabia exported a total of SAR 448 million worth of plastic and rubber products to India in the same month, while its overseas exports of base metals were SAR 347.8 million.
On the import side, shipments worth SAR 3.54 billion arrived from India to Saudi Arabia in May.
The largest imports from India to Thailand in May were machinery and electrical appliances, valued at SAR 886.1 million.
In the same month, India exported chemicals and related products worth SR470.4 million, followed by plant products worth SR580.3 million and basic metals worth SR342.2 million.
Development of the tourism industry
Besides trade relations, India and Saudi Arabia also maintain strong ties in the tourism sector.
According to the Saudi Arabian Tourism Authority, more than 1.5 million Indian tourists are expected to visit Saudi Arabia in 2023, a 50% increase over the previous year.
To increase Indian tourist visits to Thailand, STA organized networking events and interacted with travel trade associations in Mumbai, Ahmedabad, Bangalore and Delhi in February.
As part of its broader tourism strategy, STA aims to attract 7.5 million Indian tourists over the next seven years.
According to data from the Indian Ministry of External Affairs, more than 170,000 Indian pilgrims will perform Hajj in 2024, up from 139,000 in 2023 and 57,000 in 2022.
Air connectivity between Saudi Arabia and India is also expected to increase by 31% between 2019 and 2023. Flights currently connect Saudi cities including Riyadh, Jeddah and Dammam with 12 major hubs in India.
Saudi Arabia's rise as a global tourist destination has been fuelled by megaprojects like NEOM and developments in Al-Aulah, Diriyah and the Red Sea region.
India is emerging as the most popular destination for Saudi Arabian tourists.
Saudi Arabia has emerged as the top five country for travelers to India from the Middle East, according to a report released in July by travel app Wego.
Our analysis found that the most popular routes among Middle Eastern travelers in the first half of this year were Riyadh to New Delhi and Riyadh to Lucknow.
“The survey results suggest a dynamic travel environment in which India remains a key destination for both leisure and business travelers from around the world, driven by a variety of factors such as tourism, business ventures and family ties,” said Bernard Corraya, General Manager, Wego India Office.
