Saudi Arabia and India Sign Strategic MoUs to Boost Trade and Energy Ties During PM Modi’s Visit

India and Saudi Arabia sign US$100 billion worth of agreements in energy, infrastructure, security, and innovation sectors, strengthening bilateral trade and investment relations.

By Sudhanshu Singh

During India’s Prime Minister Narendra Modi’s official visit to Jeddah in April 22, 2025, India and Saudi Arabia reinforced their economic and strategic partnership by signing a comprehensive set of Memorandums of Understanding (MoUs) covering energy, infrastructure, manufacturing, technology, and defense.

The visit marked a significant milestone in bilateral ties, translating long-standing strategic intent into an actionable framework backed by a US$100 billion investment commitment. Saudi Arabia, India’s fifth-largest trading partner is aligning its economic priorities amid global market turbulence and energy realignments.

Technology, startups, and space sector investments

A targeted US$10 billion investment package has been earmarked for startups, AI, space technology, and biotech. Saudi venture capital funds are expected to collaborate with Indian innovation ecosystems, particularly in Bengaluru, Hyderabad, and Pune. Four new MoUs were signed in space technology, including joint satellite missions and launch coordination.

The collaboration also extends to postal digital upgrades and research initiatives. These are aligned with India’s Digital India program and Saudi Arabia’s tech modernization efforts.

Energy cooperation and industrial collaboration

Energy remained central to the bilateral engagement, with Saudi Arabia committing US$50 billion toward energy-related projects. This includes plans for two new oil refineries in India, each with a capacity of 9 million ton per year. These facilities are expected to enhance India’s refining capability and reduce reliance on third-country energy imports. Saudi Aramco is expected to acquire a 26 percent equity stake in the ventures at a projected cost of INR 18,000 crore (US$2.1 billion).

Apart from oil, the two countries have agreed to collaborate on green hydrogen and renewable energy technology development, with firms like Aramco and Saudi Basic Industries Corporation (SABIC) engaging Indian counterparts. A joint feasibility study is also underway to explore a cross-border electricity grid.

Infrastructure, manufacturing, and trade facilitation

An estimated US$20 billion of the total investment will support Indian infrastructure, logistics, and manufacturing sectors. The Saudi Public Investment Fund (PIF) will channel capital into Indian port cities, metro rail systems, and the proposed Bharat Mobility Corridor, which aims to streamline freight and urban connectivity.

Several Indian firms have responded by committing to establish regional headquarters in Saudi Arabia, aligning with the Kingdom’s Vision 2030 goals. Meanwhile, Saudi Arabia’s exports to India, dominated by mineral fuels, organic chemicals, fertilizers, and industrial machinery—continue to grow. In FY 2023–24, bilateral trade stood at US$42.98 billion, with India importing 33.35 million metric ton of crude oil, accounting for 14.3 percent of its total imports.

Defense and security cooperation

The countries have committed US$15 billion to defense collaboration, marking a significant step toward security alignment. The formation of a bilateral Defense Cooperation Committee is expected to streamline joint military exercises, technology transfer, and strategic communications—particularly in drone and surveillance technologies. This comes at a time of broader geopolitical shifts and increased need for defense interoperability.

Background and trade commodity insights

Trade in goods continues to anchor the economic relationship. In FY 2023-24, bilateral trade reached US$42.98 billion, including US$31.42 billion in imports from Saudi Arabia and US$11.56 billion in Indian exports. India relies heavily on Saudi crude, importing 33.35 million metric ton (MMT) in FY 2023-24, making Saudi Arabia its third-largest supplier. Imports also include fertilizers, plastics, and organic chemicals, essential inputs for India’s manufacturing and agriculture sectors. Fertilizer imports, for instance, rose from US$1.1 billion in FY 2023–24 to US$1.32 billion in FY 2024–25 (April–January), underscoring India’s efforts to secure food production inputs amid global price volatility.

On the export side, India’s sales to Saudi Arabia have remained diversified. While exports of motor vehicles and cereals declined slightly in FY 2024–25 (April–January), aircraft exports increased sharply from US$441 million to over US$1.1 billion, reflecting defense and aerospace linkages. Machinery, copper, and electrical equipment also remain key outbound categories, supporting the Kingdom’s industrial modernization.

Indian investments in Saudi Arabia have reached US$3 billion, spanning pharmaceuticals, IT, financial services, and construction. Key Indian players such as L&T, TCS, Wipro, Vedanta, Shapoorji Pallonji, and Tata Motors have established a strong presence. On the Saudi side, investments in India total US$10 billion, including Public Investment Fund (PIF) stakes in Reliance Jio, Reliance Retail, and agribusinesses like Daawat Foods and LT Foods through SALIC.

These commercial linkages are reinforced through structured platforms such as the Joint High-Level Task Force on Investment (HLTFI) and the India–Saudi Investment Forum, both of which held inaugural meetings in 2024.

Key MoUs signed

More than 50 business-to-business (B2B) and business-to-government (B2G) MoUs were signed across critical domains:

• Energy and Petrochemicals: Refinery and hydrogen collaboration;
• Health: MoU between India’s Ministry of Health and Family Welfare and Saudi Arabia’s Ministry of Health;
• Space Research: Agreement between India’s Department of Space and Saudi Space Agency;
• Anti-Doping and Sports Science: Collaboration between NADA (India) and SAADC (Saudi Arabia); and
• Postal Cooperation: Bilateral agreement between India Post and Saudi Post Corporation.

In brief

Saudi Arabia views the agreements signed during Prime Minister Modi’s visit as a milestone in economic diplomacy and commercial strategy. The US$100 billion deal package is expected to catalyze a new phase of bilateral trade integration across sectors—energy, manufacturing, digital infrastructure, defense, and cultural exchange. For Saudi investors, the Indian market offers access to a growing consumer base, complementary technology cooperation, and scalable joint ventures.

The partnership aligns with Saudi Arabia’s Vision 2030 by securing energy markets, diversifying investment portfolios, and positioning the Kingdom as a hub in emerging global value chains. For businesses, the agreements bring clarity to regulatory pathways, project opportunities, and cross-border coordination mechanisms, all of which contribute to long-term risk mitigation and commercial returns.

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