India’s Modi Heads to Saudi Arabia to Strengthen Ties Amid Global Trade Uncertainty

Indian Prime Minister Narendra Modi is commencing a two-day visit to Saudi Arabia on Tuesday, seeking to deepen the country’s strategic partnership with the oil-rich kingdom and OPEC+ leader amid increasing global trade uncertainties, Bloomberg reports.

Modi’s trip to Jeddah on the Red Sea coast will involve meetings with Saudi Crown Prince Mohammed bin Salman, bilateral discussions, and interactions with Indian factory workers.

Amidst escalating US tariffs that are disrupting global markets, both India and Saudi Arabia stand to benefit from enhanced bilateral relations, encouraging them to solidify trade ties with allies and neighbors. The two nations already rank among each other’s top five trading partners, with trade flows totaling approximately $43 billion in 2023-2024.

The leaders are expected to address a range of issues including defense, trade, and energy. Energy cooperation is of particular importance as India strives to become a leading refining hub. Modi is also likely to pursue investments, following Crown Prince Mohammed bin Salman’s 2019 pledge to invest $100 billion in India.

Ahead of the visit, India’s foreign secretary, Shri Vikram Misri, indicated that developments in deepening energy ties are anticipated, along with several memoranda of understanding, although specific details were not disclosed.

India is a major importer of Saudi crude oil, and Saudi Aramco, the state-backed energy giant, has expressed interest in investing in India for some time. The company nearly finalized an investment in 2019 through a partnership with Reliance Industries Ltd., but the deal ultimately fell through two years later.

Since then, there have been reports of Aramco considering acquiring stakes in planned Indian refineries, but no major oil investments have materialized. Any firm commitments would be seen as a positive sign for both countries, as Saudi Arabia seeks to secure long-term buyers for its oil while India aims to develop and support large refineries that convert crude oil into fuels like gasoline.

In comments made to Arab News before the visit, Modi stated that energy cooperation extends beyond a simple buyer-seller relationship, and that the two countries are exploring joint projects in refineries and petrochemicals.

The countries are also collaborating on a bilateral investment treaty and promoting improved interconnectivity through the India-Middle East-Europe Economic Corridor, Modi added.

“India values our historic relations with Saudi Arabia,” the prime minister posted on X on Tuesday. “Bilateral ties have gained significant momentum in the last decade.”

Saudi Arabia’s total investments in India amount to approximately $10 billion, according to the Indian embassy in Riyadh. This includes stakes held by the Saudi sovereign wealth fund, the PIF, in Reliance subsidiaries.

Discussions regarding investments in renewable energy, healthcare services, tourism, and entertainment – identified by the foreign ministry as relatively new areas for collaboration – are also likely to be on the agenda during the summit. Furthermore, talks on how Indian companies can contribute to the development of large-scale infrastructure projects in Saudi Arabia are anticipated.

In 2024, Saudi Arabia awarded approximately $148 billion in contracts, pushing forward with extensive projects aimed at diversifying its economy away from oil, according to the Middle East business intelligence media outlet MEED. This represents the highest total ever recorded by a single country in the Gulf region.