Aiming for Growth, Saudi Arabia Plans to Invest $100bn in India
Eyeing long-term partnership with India, Saudi Arabia has promised to invest in Indian key sectors like gas, oil and mining. As per Dr Saud bin Mohammed Al Sati, Saudi Ambassador to India, “India is an attractive investment viewed from a future perspective.”
With a population of more than 1.339 billion, India is a fast growing economy creating thousands of jobs every day. Cheap labour and educated personnel make it a great place to invest in.
As per Al Sati, Saudi Arabia is aiming to invest in India potentially worth $100 billion in multiple regions including infrastructure, petrochemicals, refining, agriculture, minerals, energy and mining.
Saudi Arabia and India have been strengthening their relations in various fields since a long time. Back in 2015, the state owned oil firm, Saudi Aramco and Abu Dhabi National Oil Company had agreed to buy 51 percent stake in a 60-million-tonne oil refinery-cum-petrochemical complex by partnering with Indian Oil, HPCL and BPCL in Maharashtra. This is seen as a big investment since the project is supposed to be the world’s largest integrated greenfield refinery-cum-petrochemicals project.
In the beginning of 2019, Saudi Aramco announced its plans to tie up with Reliance Industries by taking a 20 percent stake in business tycoon Mukesh Ambani firm’s refining unit putting the business at $75bn including debt.
If smoothly executed, this association between the fastest growing energy consumer of the world and the world’s largest oil exporter would bring out great results for both Indian and Saudi economy.
Also, Saudi Arabia has been a supplier of crude to Reliance’s refinery and petrochemicals in Gujarat since a long time. However, this new supply agreement represents nearly 40 percent of Reliance’s crude demand that is almost double to what is traditionally supplied to the Indian firm.
The idea of $100 bn investment is in line with the Vision 2030 wherein Saudi Arabia is planning to widen the economy while reducing its economic dependence on petroleum products.
Both the countries are largely dependent on each other for various supplies. Being the source of more than 17 percent of crude oil and fulfilling 32 percent of LPG requirements of India, Saudi Arabia stands as a care taker of India’s energy security.
Speaking of the improving relations between the two, Saudi Ambassador said, “Saudi Aramco’s proposed investments in India’s energy sector such as the $44 billion West Coast refinery and petrochemical project in Maharashtra and long-term partnership with Reliance Industries represent strategic milestones in our bilateral relationship.”
Also, Indian Oyo has signed an MoU with the Saudi Arabian General Investment Authority (SAGIA) in order to set up a luxury hospitality ecosystem in multiple cities of the country.
The upcoming investments can be seen as a plausible measure on the part of Saudi to shift media attention from other controversial aspects of the country to the sectors helping it grow economically.
Also in a recent meeting between Indian National Security Advisor Ajit Doval and Saudi Crown Prince Mohammed Bin Salman, Doval spoke of the need for de-escalation of tension between India and Pakistan.
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