Indo-Saudi Economic Relations

 

India - Saudi Arabia business relations

Introduction India-GCC Industrial Conference Trade Indian Investment and Joint Ventures Trade figures Saudi investment in India Main Indian exports Indian Business delegations to Saudi Arabia India’s major imports Saudi Business delegations to India Indian Manpower Overview   Introduction: India and Saudi Arabia are old business partners: their trade relations go back tens of centuries.  Today, the bilateral business ties are being steadily expanded and further strengthened by continuous interaction and cooperation, including regular exchange of business delegations. Besides being a major trade partner, India sees the Kingdom as an important economic partner for investments, joint ventures, transfer of technology projects and joint projects in third countries.    Trade: India is 4th largest trading partner for Saudi Arabia: The value of the two-way trade between the two countries in 2002-2003 was US$ 5.10 billion. For Saudi Arabia, India is the 4th largest market for its exports, accounting for 4.84 % of its total exports. In terms of imports by Saudi Arabia, India ranks 10th and is source of around 2.73 % of Saudi Arabia’s total imports.   Trade figures for the last five years are as follows:                                                   Indo-Saudi Trade (in million US $) Year ( April - March) *Imports from Saudi Arabia Exports to Saudi Arabia Total trade Increase in Indian exports 1998-99 1831.47 774.29 2605.76 12.23 % 1999-2000 2419.24 742.50 3161.74 -4.11 % 2000-2001 621.12 822.94 1444.06 10.83 % 2001-2002 465.60 829.20 1294.80 0.76 % 2002-2003 505.90 943.00 1448.90 13.72 % * Note: Imports since 2000-2001 does not include import of Petroleum Products and Crude Oil, which  was approx. US $ 3.65 billion in FY 2002-03(Deptt.of Commerce, GOI)   Main Indian exports to Saudi Arabia are basmati/non-basmati rice, tea, manmade yarn, fabrics, made-ups, cotton yarn, primary and semi-finished iron and steel, chemicals, plastic & linoleum products, machinery and instruments.   India’s major imports from Saudi Arabia are petroleum and petrochemical products. Saudi Arabia is the largest supplier of crude oil to India. It provides around a quarter of India’s crude exports. During 2002-2003, the India’s imports of Crude Oil and petroleum products from Saudi Arabia amounted to 18.816 million metric tonne(MMT) worth approximately US $ 3.6 billion.    Indian Manpower: Contribution by Indian manpower Saudi economy is an important dimension of the Indo-Saudi relationship:  1.3 to 1.4 million Indians are at present working in Saudi Arabia, over 90% of whom are in the blue-collar category.  These people have made immense contribution to Saudi economy, and they play an important role in strengthening the Indo-Saudi bilateral relations.   Indian Investment and Joint Ventures:  Since mid-2000, a number of Indian firms have taken advantage of the new Saudi laws and established joint venture projects or wholly-owned companies in the Kingdom. According to Saudi Arabian General Investment Authority (SAGIA), during last two years it has issued new 65 licenses to Indian companies for joint ventures or 100% owned entities, which were expected to bring a total investment of around US $ 362 million in Saudi Arabia.  in addition, several Indian companies operate in Saudi Arabia in collaborations with local Saudi companies.    Saudi investment in India: Attracted by emerging business opportunities in India, the Saudi investment in India is growing. Saudi Arabia is the 22nd biggest investor in India with investments during 1991- 2002 amounting to US $ 170 million. There are more than 55 Indo-Saudi joint ventures or Saudi owned companies in India, in diverse fields such as paper manufacture, chemicals, computer software, granite processing, industrial products and machinery, cement, metallurgical industries, etc.    Indian Business delegations to Saudi Arabia:  During last couple of years,a large number of Indian trade and industry delegations have visited Saudi Arabia to explore the opportunities for long-term partnerships and cooperation, including joint ventures. These delegations received warm and enthusiastic response from the Saudi business community. Indian and Saudi companies regularly take part in trade fairs in each other’s country.   Saudi Business delegations to India: In recent times, the number of Saudi businessmen and delegations  visiting India has grown substantially, indicating growing interest in emerging business opportunities in India.     India-GCC Industrial Conference: India and GCC are organizing a two day  India-GCC Industrial Conference on 17-18 February, 2004 at Mumbai.  A large number of Ministers, senior officials, industrialists and business leaders from India and the GCC states are expected to attend this first ever GCC-India Conference. The Conference is expected to provide a new momentum to the strong relations between the GCC States and India, particularly in the field of economic and commercial exchanges.    Overview: Today, Indo-Saudi business relations are growing strongly reflecting the inherent strength and complementarity nature of the two economies.  The various occasions for high-level dialogue on business matters and regular exchange of delegations have established a sound basis for a constructive, mutually beneficial relationship. The outlook for Indo-Saudi business ties is very promising.