INDIA - SAUDI ARABIA TRADE RELATIONS

P R E S E N T E D B Y :

K A M A L D E E P S . S A N D H U

L O V E D E E P S . S I D H U

P O O J A K H U L L A R

P R A B H J O T K A U R

P U N N E T K A U R

INTR

ODUCTION T

O SAUDI

ARABIA

INTRODUCTION

Background

Saudi Arabia is the birthplace of Islam and home to Islam's two holiest

shrines in Mecca and Medina.

Geography

Middle East, bordering the Persian Gulf and the Red Sea, north of Yemen.

Climate

harsh, dry desert with great temperature extremes.

Natural Resources

petroleum, natural gas, iron ore, gold, copper.

Population 26,131,703 country comparison to

the world: 46

Population growth rate:

1.536% (2011 est.)

Birth rate 19.34 births/1,000

population (2011 est.)

Death rate 3.33 deaths/1,000

population (July 2011 est.)

Religions Muslim 100%

Languages Arabic (official)

PEOPLE

ECONOMY

OVERVIEW

• Saudi Arabia has an oil-based economy with strong

government controls over major economic activities. 

• It possesses about 20% of the world's proven petroleum

reserves, ranks as the largest exporter of petroleum, and

plays a leading role in OPEC.

• The petroleum sector accounts for roughly 45% of GDP.

• Saudi Arabia is encouraging the growth of the private sector

in order to diversify its economy and to employ more Saudi

nationals.

GDP (purchasing

power parity)

$622.5 billion (2010

est.)

country comparison to

the world: 23

note: data are in 2010

US dollars

GDP (official exchange

rate)

$434.4 billion (2010

est.)

GDP - real growth rate

3.8% (2010 est.)

country comparison to

the world: 95

Inflation rate

(consumer prices)

5.7% (2010 est.)

country comparison to

the world: 152

CONT…

Exports

$235.3 billion (2010 est.)

country comparison to the

world: 19

Exports – commodities

petroleum and petroleum

products 90%

Exports – partners

Japan 15.33%, South Korea

12.71%, US 12.2%, China

10.38%, India 7.12%,

Taiwan 4.54%, Singapore

4.25% (2009)

Imports

$99.17 billion (2010 est.)

country comparison to the

world: 32

Imports – commodities

machinery and equipment,

foodstuffs, chemicals, motor

vehicles, textiles

Imports – partners

US 12.32%, China 12.06%,

Germany 7.67%, Japan

6.15%, South Korea 5.32%,

India 4.99%, UK 4.72%,

France 4.05% (2009)

CONT…

INDIA’S VISIT TO SAUDI ARAB(2010)

• Indian Prime Minister Manmohan Singh undertook a three-day visit to Saudi Arabia beginning 27 February 2010, accompanied by his wife Gursharan Kaur, Health Minister Ghulam Nabi Azad, Commerce and Industry Minister Anand Sharma, Petroleum Minister Murli Deora and Minister of State for External Affairs Shashi Tharoor.

•  Indian Prime Minister Manmohan signed bilateral agreements and issue a Riyadh Declaration for deepening their relationship. 

AGREEMENTS

1. The treaty was signed to further enhance the existing security cooperation between the two countries.

2. 2nd agreement signed by the two countries was on transfer of sentenced prisoners to their own country.

3. The third agreement was on cultural cooperation between the two ministries of culture. 

4. The fourth memorandum of understanding was on cooperation on peaceful use of outer space. It was signed between India's Department of Science and Technology (DST) and Saudi Arabia's King Abdulaziz City for Science and Technology (KACST).

5.  A pact was also signed between the Gulf Bureau of Research and DFL, and another between India's Centre for Development of Advanced Computing (C-DAC) and Saudi Arabia's King Saud University.

6. Even in the energy sector, the Indian Prime Minister proposed a strategic partnership between the two countries.

TRADE

• India is 4th largest trading partner for Saudi Arabia.

• The value of the two-way trade between the two countries in 2003-2004 exceeded US$ 6.63 billion.

• Saudi Arabia is the 15th largest market in the world for Indian exports and is destination of more than 1.76% of India’s global exports.

• Saudi Arabia is the source of 5.5% of India’s global imports. For Saudi Arabia, India is the 4th largest market for its exports, accounting for 5.95% of its global exports

INDO-SAUDI TRADE (IN MILLION US $)

INDIA’S MAJOR EXPORTS

• Basmati/non-basmati rice• Manmade yarn, fabrics, made-ups,

cotton yarn, • Primary and semi-finished iron and

steel,• Chemicals, plastic & linoleum

products, machinery and instruments.

INDIA’S MAJOR IMPORTS

• Petroleum and petrochemical products.

• Saudi Arabia is the largest supplier of crude oil to India. It provides around a quarter of India’s crude exports.

• Saudi Arabia meets around 26% of India’s crude requirements annually.

INDIA’S INVESTMENT IN SAUDI:

• According to Saudi Arabian General Investment Authority , during last two years Saudi has issued new 82 licenses to Indian companies for joint ventures or 100% owned entities, which are expected to bring total investment of US $ 467.18 million in Saudi Arabia.

• These licenses are for projects in diverse sectors such as management and consultancy services, construction projects, telecommunications, information technology, pharmaceuticals,etc.

• several Indian companies have established collaborations with Saudi companies and working in the Kingdom in the areas of designing, consultancy, financial services and software development.

SAUDI INVESTMENT IN INDIA

Saudi Arabia is the 22nd biggest investor in India with investments during 1991- 2004 amounting to US $ 228.8 million.

There are 49 Indo-Saudi joint ventures or Saudi owned companies in India, in diverse fields such as

• paper manufacture chemicals

• computer software

• granite processing

• industrial products and machinery, cement.

INDIA

AND S

AUDI ARABIA

CURRENT RELA

TIONSHIP

• As the trade relations between India and Saudi Arabia is already in its bloom, there is an enormous potential for a multi dimensional trade relation, says Anand Sharma, the Commerce and Industry minister in his meeting with Abdullah bin Ahmed Zainal Alireza, his Saudi Arabian counterpart on 25th November 2010.

• Both of them agreed for more cooperation in the field of investment and trade services for stimulating the businesses in both of the countries. India is also planning a joint venture with Saudi to establish gas based fertilizer plants there

• Saudi’s FDI from August 2000 to 2009 August was around $31.59 million. The major areas of Foreign Direct Investment in Saudi Arabia are electrical equipment's telecommunications, automobiles, software, hardware and food processing industries.

• In exports, trade worth $1,809.77 million was present in 2005-2006 and in 2009-2010 it became $3,907.00 million. The imports marked an increase of $15,465.23 million in the year 2009-2010. The main export items are rice, metals and machinery equipment's. The major items to import include petroleum, artificial resin and plastic.

• The India and Saudi Arabia trade in total was $3,442.11 million in 2005-2006. In 2009-2010 it became $21,004.57 million

THANK YO

U