In what comes as a massive shot in the arm for India’s FDI inflows, world’s biggest oil exporter, Saudi Arabia is looking at investing $100 billion across several sectors such as petrochemicals, infrastructure and mining. Saudi Arabia Ambassador Dr Saud bin Mohammed Al Sati has said that India is an ‘attractive investment destination’ for Saudi Arabia and has also stressed upon the vision of his country for long-term partnership with India in key sectors as such as oil, gas and mining.
The Saudi Ambassador told PTI in an interview, “Saudi Arabia is looking at making investments in India potentially worth USD 100 billion in the areas of energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining.” Al Sari also spoke about Vision 2030 of Crown Prince Mohammed bin Salman and spoke about what it means to India-Saudi Arabia relations. He said that it would result in significant expansion in trade and business between the two countries.
Saudi Arabia clearly understands the huge growth potential that India has to offer and looks to be very specific in its investment targets in India. The Ambassador said that more than 40 opportunities for joint collaboration and investment have been identified across various sectors in 2019 between India and Saudi Arabia. He also exuded confidence about the continuous increase in the bilateral trade between the two countries which currently stands $34 billion. Stressing upon the massive potential in several sectors, Al Sari said, “There is huge untapped potential available in merchandise trade, particularly in non-oil trade and we are enhancing cooperation in economic, commercial, investment, cultural and technological fields.”
The Saudi Ambassador also assured about taking care of India’s oil concerns. Asked whether Saudi Arabia will increase oil supply to India amidst shortfall due to restrictions on importing oil from Iran, the envoy made it clear that Saudi Arabia is committed to India’s energy security and will meet any shortfall that may arise due to disruptions from any other source.
Al Sari also spoke of Saudi Aramco’s investments in India and highlighted how the investments along with the long term partnership between Reliance and Aramco represented “strategic milestones” in the bilateral relations between India and Saudi Arabia. It must be noted that Saudi Aramco wants a larger presence in the Indian oil and gas business. India is set to surpass China as the second largest consumer of oil after the United States. The appetite of Indians for energy is growing and refining capacities need to be expanded. India has the fourth largest oil refinery capacity in the world after United States, China and Russia.
The US has refining capacity 841 MTPA (Metric tonnes per annum) while China has a capacity of 589 MTPA. China alone accounts for 41 percent of Asia’s production capacity while Russia has capacity of 282 MTPA. India has 266 MTPA production capacity and may soon overtake Russia with such massive investments by companies like Saudi Aramco. And therefore the move to buy a 20 per cent stake in the Reliance’s oil-to-chemicals (OTC) business by Saudi Arabia’s state owned company, Aramco which also happens to be world’s largest oil producer was seen as a gamechanger.
Saudi Arabia’s intent to invest on a big scale in India comes not only as a massive push for the Modi government’s efforts to augment FDI inflows but also as a major boost to India’s energy needs and security as the bilateral ties between the two countries continue to deepen. Saudi Arabia has traditionally been India’s biggest source when it comes to oil needs, replaced only fairly recently by Iraq in 2017-18. Currently, Saudi Arabia remains crucial to India’s interests as it supplies 17 per cent or more of India’s crude oil and 32 per cent of India’s LPG requirements. At such a juncture, Saudi investments to the tune of $100 billion in India comes as a massive gamechanger.