India’s economies ties with Saudi Arabia turn transformational

When Indian Prime Minister Narendra Modi and Saudi Arabia’s Crown Prince Mohammed bin Salman greeted each other at the G20 Summit in New Delhi in 2023, it wasn’t just a photo-op. It was the visual emblem underscoring a deeper, strategic recalibration between two of Asia’s most influential powers.

One a rising economic juggernaut with demographic muscle and digital prowess. The other, a petro-state rapidly transforming into a diversified economic powerhouse. Together, India and Saudi Arabia are crafting a future-facing partnership that reflects not just shared interests, but a shared vision of a multipolar world.

Gone are the days when the relationship was defined solely by oil shipments and remittances. Today, India–Saudi ties span across space technology and fintech, green hydrogen and infrastructure, security and culture.

It is a pivot from transactional to transformational - a shift underpinned by a convergence of ambition, capital, and strategic intent. This multi-dimensional partnership is fast becoming one of the most significant bilateral equations in the Global South.

Bilateral trade between India and Saudi Arabia has seen consistent growth over the years. India is Saudi Arabia’s second-largest trading partner, while the Kingdom ranks as India’s fifth-largest. In FY2023–24, bilateral trade reached $42.98 billion, comprising Indian exports worth $11.56 billion and imports totaling $31.42 billion.

Saudi Crown Prince Mohammed bin Salman’s Vision 2030 finds a natural partner in India’s own economic aspirations and tech-driven growth.

Indian investments in Saudi Arabia have witnessed a notable rise in recent years, reaching a cumulative total of approximately $3 billion as of August 2023. These investments span sectors, including consultancy services, construction, telecommunications, IT, financial services, software development, and pharmaceuticals.

Saudi investments in India, including those from the Public Investment Fund (PIF), Saudi-backed Vision Fund, and major companies, total around $10 billion. Key deals include PIF’s investments of $1.5 billion in Reliance Jio Platforms and $1.3 billion in Reliance Retail.

In the agri-sector, Salic (a PIF-owned firm) acquired a 30% stake in Daawat Foods ($17.23 million) in 2020 and a 9.2% stake in LT Foods ($44 million) in 2022.

Clearly, the narrative has now shifted well beyond hydrocarbons.

In 2019, during Modi’s visit to Riyadh, the two countries signed the Strategic Partnership Council agreement, institutionalizing high-level dialogue and cooperation across critical sectors including defence, security, energy, and investment. 

The India–Middle East–Europe Economic Corridor (IMEC), unveiled at the G20 Summit in Delhi in 2023, marks a seismic shift in the geopolitics of global trade routes. The IMEC aims to connect India to Europe via the UAE, Saudi Arabia, Jordan, and Israel.

Saudi Arabia’s participation underscores its intention to position itself as a logistics and connectivity hub, while also strengthening India’s role as a maritime power in the Indo-Pacific.

This also has major strategic implications. As both countries deepen defence and maritime cooperation, evident in joint naval exercises, they are also aligning their positions on regional security, counter-terrorism, and cybersecurity.

Saudi Arabia’s shift toward a knowledge economy has opened doors for Indian IT majors and universities. Companies like TCS, Wipro, and Infosys have ramped up their presence in the Kingdom.

Cultural diplomacy is also in full flow. From Bollywood film festivals in Jeddah to collaborations in sports and tourism, both nations are promoting soft power with remarkable ease. The signing of MoUs in archaeology and heritage conservation adds depth to an already dynamic engagement.

As global power centers realign, India and Saudi Arabia are not just cooperating; they are co-creating a new narrative of south-south collaboration, energy transition, and strategic autonomy. In an era defined by uncertainty, this is a move that spells calculated ambition, deepening trust, and limitless potential.