Saudi crown prince: Investment in India to reach $100 billion
Saudi Arabia’s Crown Prince Mohammed bin Salman is in India as part of a rare four-day Asia visit. The Saudi crown prince pledged $100 billion in investments to India over the next two years.
The two countries have signed five bilateral agreements and Memorandums-of-Understanding (MoUs) in the fields of trade, housing, and investment.
“We want to be sure this relationship between Saudi Arabia and India is maintained and improved for the sake of both countries,” said Mohammad bin Salman, during a brief conversation with the press following a ceremonial welcome by Indian Prime Minister Narendra Modi and President Ram Nath Kovind.
Strong trade and investment ties
About 20 percent of India’s crude oil is supplied by Saudi Arabia, a Reuters report states, and 32 percent of India’s LPG requirements come from Saudi Arabia, according to the PTI. Trade between the two countries totaled $27.5 billion in 2018, making Saudi Arabia the fourth-biggest trading partner in India, according to a CNN report. There was a time India’s trade with Iran was higher, but that changed following U.S. sanctions placed on Iran.
The talks between Saudi Arabia and India will also involve investments in a $44 billion refinery in Ratnagiri, India, in which Saudi’s Aramco and UAE’s ADNOC have agreed to pick up a 25 percent stake.
The bilateral talks will cover Saudi Aramco’s investment in refineries in India, including the stalled $44 billion refineries in Ratnagiri, Maharashtra. Riyadh’s investments in joint FDI ventures in India are also increasing in the fields of paper manufacturing, metallurgy, cement, and industrial products, among others.
The MoUs signed during the Saudi crown prince’s visit to India include:
- an MoU on investments in the National Investment and Infrastructure Fund
- an MoU on cooperation in the field of tourism
- an MoU on cooperation in the field of housing
- an MoU on cooperation in broadcasting services between Prasar Bharati and SBC, the state-owned broadcasting agencies of the two nations
- a framework cooperation program between Invest India and Saudi Arabian General Investment Authority
Saudi Arabia also announced that it would come on board the International Solar Alliance – a cooperative alliance that was started by India that comprises nations rich in solar resource.
A tale of two cities
There is also the delicate issue of India’s continued investment in Iran, which is at loggerheads with Saudi Arabia, and conversely, the kingdom’s investment interests in Pakistan, which has been in conflict with India for decades.
Most recently, Saudi Arabia confirmed plans to invest in a $10 billion oil refinery located in the deepwater port of Gwadar, Pakistan. This is merely 72 kilometers from the port of Chahabar in Iran, which New Delhi operates and has heavily invested in.
This is part of a new, interesting set of moves being played out at the entrance to the Strait of Hormuz, which connects the Middle East, Pakistan, and Afghanistan to other Asian countries. Chahabar and Gwadar are also considered important supply routes to Afghanistan, making them the center of a geopolitical game in the region.
Due to the prominence of its position, Chahabar in Iran has been exempted from the general U.S. sanctions placed on Iran.
China, which views the U.S. and India as direct trade competitors, has made Gwadar a key link in its massive Belt and Road initiative.