India and Saudi Arabia Expand Strategic Ties with Oil Refineries, Energy Cooperation, and Investment Push

India and Saudi Arabia have agreed to collaborate on building two new oil refineries in India, reinforcing their deepening strategic partnership. This major initiative is part of Saudi Arabia’s broader commitment to invest $100 billion in India, spanning multiple sectors such as energy, petrochemicals, infrastructure, technology, digital infrastructure, fintech, telecommunications, pharmaceuticals, health, and manufacturing.

Prime Minister Narendra Modi holds delegation-level talks with Crown Prince and the Prime Minister of Saudi Arabia in Jeddah on Wednesday. (ANI)

The announcement was made during Indian Prime Minister Narendra Modi’s official visit to Saudi Arabia on April 22, 2025. The projects will be developed in cooperation with the Indian government and mark a significant milestone in Indo-Saudi economic and energy collaboration.

A High-Level Joint Task Force on Investment (HLTF), formed to expedite Saudi Arabia’s proposed investments, finalized plans for cooperation across a wide range of industries. The task force's work builds on an earlier 2019 commitment and has now outlined actionable steps to initiate the projects. (This part is taken from Mint)

Key Developments and Agreements

• Two New Refineries: Each with a 20 million tonne/year capacity, the refineries are expected to boost India’s refining capabilities, ensuring energy security in light of rising domestic demand for petroleum and petrochemicals.

• Supply Chain Collaboration: Both nations will cooperate on developing energy-related supply chains and infrastructure projects, including those linked to green hydrogen—such as hydrogen transport and storage technologies.

• Broader Investment Scope: The $100-billion Saudi investment also targets joint development in technology, pharmaceuticals, fintech, telecom, infrastructure, and healthcare.

• Greenfield Refinery in Andhra Pradesh: Bharat Petroleum Corporation Ltd (BPCL), a state-run enterprise, is proceeding with a separate greenfield refinery project in southern India.

During the same visit, Prime Minister Modi and Saudi Crown Prince Mohammed bin Salman co-chaired the India-Saudi Arabia Strategic Partnership Council (SPC) in Jeddah. The SPC reviewed progress made under various committees and announced the creation of two new ministerial committees—on Defence Cooperation and on Tourism and Cultural Cooperation—bringing the total to four:

1. Political, Consular and Security Cooperation Committee

2. Defence Cooperation Committee

3. Economy, Energy, Investment and Technology Committee

4. Tourism and Cultural Cooperation Committee

Additional Agreements and Partnerships

Several Memorandums of Understanding (MoUs) were signed:

• Space Cooperation: Between the Saudi Space Agency and India’s Department of Space, for peaceful space activities.

• Health and Anti-Doping: Agreements to collaborate in healthcare and anti-doping education.

• Postal Services: A deal between the Saudi Post Corporation and India’s Department of Posts for cooperation in inward surface parcel delivery.

Trade Overview

Saudi Arabia is currently India’s fourth-largest trading partner and the third-largest supplier of crude oil. In FY2023–24, India imported goods worth $31.4 billion from Saudi Arabia and exported approximately $11.6 billion. India’s exports include petroleum products, engineering goods, rice, chemicals, and textiles, while imports from Saudi Arabia primarily comprise crude oil, LPG, fertilizers, and chemicals.

Ratnagiri Mega Refinery: Uncertainty Continues

A previous agreement to build a massive $44 billion refinery in Ratnagiri, Maharashtra, faced delays due to land acquisition issues and local opposition. While no official update has been provided on the project’s future, Maharashtra Chief Minister Devendra Fadnavis recently stated that three smaller refineries—each with a 20 million tonne/year capacity—will be built instead, including one in Ratnagiri and two in other southern states. This reflects a shift towards decentralized refinery development, a strategy also supported by Petroleum Minister Hardeep Singh Puri. (This part is taken from ICIS)

Conclusion

The latest developments signal a significant expansion in India-Saudi Arabia relations, emphasizing energy security, economic collaboration, and shared technological goals. As both nations align strategically through multibillion-dollar investments and new joint projects, their partnership is poised to play a transformative role in regional stability and global energy dynamics.