India and Saudi Arabia Explore Local Currency Trading
India and Saudi Arabia have initiated discussions on trading in national currencies, moving towards a collaboration that will strengthen bilateral economic ties. During the visit of Saudi Crown Prince Mohammed bin Salman, officials from India’s Ministry of External Affairs confirmed that the idea is currently in the discussion stage.
Progress in Currency Trading
Ausaf Sayeed, secretary in the ministry, mentioned that discussions have either begun or will begin soon. He also highlighted that the Saudi side is aware that India has similar arrangements with other countries in the region, including the United Arab Emirates (UAE). Currently, India conducts trade with the UAE in its national currency.
Expedited Talks on Free Trade Agreement
In addition to currency trading, India and Saudi Arabia have agreed to expedite talks on a Free Trade Agreement (FTA) between India and the Gulf Cooperation Council (GCC). Delays in these negotiations were caused by the absence of a chief negotiator on the GCC side, which has now been resolved.
Establishing a Joint Task Force for Investments
Both countries have also agreed to establish a joint task force to facilitate the channeling of Saudi Arabia’s promised $100 billion investment into India. This commitment was made during Crown Prince Mohammed bin Salman’s previous visit to India in 2019. The majority of this investment will be focused on the West Coast Refinery Project, a trilateral initiative involving Saudi Arabia’s Aramco, the UAE’s Adnoc, and India’s state-owned oil companies.
Co-operation in Other Industries
Beyond the financial and energy sectors, India and Saudi Arabia have shown interest in cooperation in semiconductors and the space industry. Prime Minister Narendra Modi encouraged Saudi officials to explore opportunities in India’s semiconductor ecosystem during bilateral meetings.
Strengthening Defense Ties
India and Saudi Arabia are also discussing efforts to deepen their defense ties, building on the success of two rounds of joint naval exercises. Plans are underway to expand these joint exercises to other domains, and collaboration in defense manufacturing is being explored.
Robust Bilateral Trade
Saudi Arabia is currently India’s fourth largest trading partner, with approximately 18% of India’s crude oil imports coming from the kingdom. In FY22 (April-December), bilateral trade between the two countries reached a value of $29.28 billion. During this period, India’s imports from Saudi Arabia amounted to $22.65 billion, while exports to Saudi Arabia were worth $6.63 billion.
Through these robust discussions, India and Saudi Arabia aim to strengthen their economic and strategic collaborations, opening up new avenues for growth and cooperation.
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