New Delhi — Saudi Arabia has announced on Monday its intention to establish an office of its sovereign wealth fund, the Public Investment Fund (PIF), in India’s Gujarat International Finance Tec-City (GIFT).
The announcement was made by Saudi Investment Minister Khalid Al Falih during a state visit to India by Saudi Crown Prince Mohammed bin Salman.
GIFT City, located in the western Indian state of Gujarat, is a tax-neutral financial services hub and a vital project for Indian Prime Minister Narendra Modi, who envisions it as a global rival to financial centers such as Dubai and Hong Kong. The move by Saudi Arabia to set up an office in GIFT City reflects a growing economic partnership between the two nations.
Trade Minister Piyush Goyal extended the invitation to Saudi Arabia to establish the PIF office in GIFT City. In a reciprocal gesture, Minister Goyal also expressed his intention to create an investment promotion office in Riyadh, underlining India’s commitment to strengthening bilateral economic ties.
The centerpiece of the state visit was the signing of 50 initial agreements in various sectors and the establishment of a joint task force to oversee a $100 billion Saudi investment in India. This commitment, originally announced by the Crown Prince in 2019, represents a significant milestone in the economic relationship between the two countries.
While a specific timeline for the $100 billion investment has not been set, Minister Falih confirmed that previously announced projects are still on the table.
Approximately half of the planned $100 billion investment is designated for a delayed refinery project along India’s western coast. This project is a result of a collaboration between Saudi Arabia, the United Arab Emirates, and an Indian consortium.
The initiative aims to set up a 1.2 million barrels-per-day coastal refinery and petrochemical plant in western Maharashtra, offering a reliable outlet for Saudi oil.
However, Minister Falih noted that there are challenges to overcome, including land acquisition for the refinery project. Nevertheless, both nations have expressed their determination to address these issues in pursuit of their economic objectives.
Saudi Arabia’s interest in investing in various sectors in India, including oil, gas, petrochemicals, new energy, technology, manufacturing, and defense, demonstrates the diverse range of opportunities for collaboration between the two countries.
Saudi Aramco, the Saudi oil giant, is also exploring initiatives to convert a substantial portion of its oil production into advanced green materials through global projects, with India being a potential partner in this endeavor.
The establishment of a PIF office in GIFT City signifies Saudi Arabia’s confidence in India’s economic potential and its commitment to fostering economic cooperation between the two nations.
As both countries deepen their economic ties and explore avenues for mutual growth, this collaboration is expected to have far-reaching impacts on their economies and strengthen the diplomatic relationship between India and Saudi Arabia.
