Saudi’s largest oil producer Aramco's is investing in India's energy sector worth USD 44 billion in West Coast refinery and petrochemical project in Maharashtra. Importance of Saudi Arabia
Why Saudi is investing in India?
- The World Bank has ranked the kingdom as the fourth largest reformer within G20.
- Important leader in regional forums like OIC,
- Important player in UNSC and important ally of the US in West Asia.
Benefits to India
- India is an attractive investment destination for the kingdom and it is eyeing long-term partnerships with New Delhi in key sectors such as oil, gas, and mining.
- Under vision 2030, Saudi Arabia plans to diversify the Saudi economy while reducing its economic dependence on petroleum products.
- Vision 2030 Saudi Arabia is working towards transforming its economy and looking at a post-oil age of world-class technological research, start-up and entrepreneurial vigor.
With Saudi’s new residence permit scheme for qualified international expatriates, the launch of tourist visa will promote economic cooperation, people to people contact, cultural ties, tourism, and safeguarding the rights of Indian diaspora in the war-prone region. Prelims Topic: OPEC About The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Functions The mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. Member Countries- Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, United Arab Emirates(UAE).Gabon, Guinea, Venezuela. Also read: Renewable Energy Target To Be More Than Doubled Government Spots Constraints On Renewable Energy Projects
- Energy Security- Saudi Arabia is the mainstay of India's energy security (crude oil -17 % LPG 32 %) in the volatile oil market amid sanctions against Iran. India's invitation to Saudi Arabia to invest in its strategic petroleum reserve reflects the trust and goodwill the two countries share.
- Energy market- Being the largest oil producer the kingdom will continue working constructively with other producers within and outside OPEC to maintain market stability, thus protecting the interests of producers and consumers.
- Boost to the economy - Investment in India's value chain from oil supply, marketing, refining to petrochemicals and lubricants will help realize the dream of 5 trillion economy
- Bilateral Trade -Current bilateral trade stands at USD 34 billion is expected to increase with new joint collaboration and investment identified across the various sector. 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
- Source of investment - 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,