India and Saudi sign agreements to enhance trade and investment

During Union Commerce Minister Piyush Goyal’s recent visit to Riyadh, India, the world’s third-largest crude oil importer, and oil-rich Saudi Arabia agreed to collaborate on energy transition and to share expertise to accelerate economic growth. The two nations signed a series of “actionable agreements” aimed at enhancing trade volumes and facilitating a smooth flow of investments between them. India ranks as Saudi Arabia’s second-largest trade partner, while Saudi Arabia is India’s fifth-largest trading partner. The bilateral trade between the two countries stood at US$ 43 billion in 2023-24.

India and Saudi Arabia recently signed a series of agreements aimed at boosting trade and facilitating investment between the two nations. These agreements emphasize cooperation in energy transition, digital transformation, and expertise exchange to drive economic growth.

CIM Piyush Goyal, who was visiting Saudi Arabia, oversaw the signing. During his trip, he met with the Saudi Ministers of Energy, Industry and Mineral Resources, and Investment to discuss collaborative initiatives in trade, energy, and technology. 

According to the Commerce Ministry, “These discussions culminated in a series of actionable agreements, aimed at enhancing trade volumes and facilitating a smooth flow of investments between the two countries. The agreements emphasise cooperation in energy transition, digital transformation, and the exchange of expertise to accelerate economic growth.” 

The Minister also co-chaired the second Ministerial Meeting of the Economy and Investment Committee under the India-Saudi Strategic Partnership Council (SPC) with Saudi Energy Minister Abdulaziz bin Salman Al-Saud. The committee reviewed progress from four Joint Working Groups focused on Agriculture and Food Security, Energy, Technology and Information Technology, and Industry and Infrastructure. (The SPC was established in 2019 following Prime Minister Narendra Modi’s visit to Saudi Arabia in October of that year. During Crown Prince Mohammad bin Salman’s visit to India in February 2019, Saudi Arabia announced plans to invest approximately US$ 100 billion in various sectors, including tourism, housing, and the exchange of audio-visual programs.)

During the visit, the minister inaugurated the Lulu Wali Diwali Festival at Lulu Hypermarket by lighting a large LED Diya, emphasizing the cultural and economic ties between India and Saudi Arabia. Organized in collaboration with Lulu Hypermarket, the Diwali Utsav features a wide range of Indian products, including festive decorations, traditional foods, and handicrafts. The event also showcased a giant product wall displaying over 10,000 Indian items, such as Ghee from Uttarakhand, Ladakh apples, Indian Cavendish bananas, Dragon Fruit from Maharashtra, a new range of millet-based breakfast cereals, and Qaadu organic beauty products, according to the statement.

In recent years, India and Saudi Arabia have formalized numerous bilateral agreements covering various sectors, including food exports, pharmaceuticals, electrical interconnectivity, energy, small and medium enterprises, digitization, and electronic manufacturing. The two nations are also exploring partnerships in emerging areas, including fintech, new technologies, energy efficiency, clean hydrogen, textiles, and mining.

As of January 2022, there were approximately 2,783 Indian firms operating in Saudi Arabia, including major corporate groups such as L&T, TATA, Wipro, TCS, and Shapoorji & Pallonji, with investments totaling around US$ 2 billion. Meanwhile, Saudi Arabia’s direct investments in India reached US$ 3.15 billion by March 2022. Notable Saudi investment groups active in India include ARAMCO, SABIC, ZAMIL, E-Holidays, and the Al Batterjee Group. Additionally, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), invested around US$ 4.6 billion in various Indian startups through SoftBank’s Vision Fund.

According to government data, India is the second-largest trade partner of Saudi Arabia, while Saudi Arabia ranks as India’s fifth-largest trading partner. In the fiscal year 2023-24, bilateral trade between the two nations reached US$ 43.3 billion as against US$ 53 billion in 2022-23. India exported goods worth US$ 11.56 billion during this period, while Saudi Arabia’s exports amounted to US$ 31.8 billion.