India and Saudi Arabia are exploring joint projects in refineries and petrochemicals, Indian Prime Minister Narendra Modi told Arab News in an interview, as he began a two-day visit to the country on Tuesday.
The visit comes at a time when Saudi Arabia—one of India’s top three crude suppliers—is looking to increase its oil exports to New Delhi amid slowing demand from China. With the Chinese economy facing headwinds and a growing shift towards electric vehicles, Riyadh is recalibrating its energy strategy, and India’s growing crude demand offers a timely alternative.
Sources say Saudi Arabia may offer crude oil at concessional rates to secure a greater share of India’s energy market. The kingdom is also eyeing investments in at least three refinery projects across eastern and western India. These include renewed interest from Saudi Aramco in partnering with Indian public-sector giants like BPCL and ONGC, as part of broader downstream collaborations.
"Saudi Arabia is facing some headwinds. Oil prices have declined by nearly 20 percent in 2025, and with OPEC+ increasing output, the bearish trend may persist," said Mahesh Sachdev, former Indian ambassador and energy expert. "China, Saudi Arabia’s largest crude buyer, has sharply reduced its imports."
With India now Aramco’s second-largest customer and its oil demand still strong, the kingdom sees New Delhi as a strategic partner to offset losses in the Chinese market. However, Aramco’s exports to India actually fell by more than 4% year-on-year in 2024–25, driven largely by price competition and limited downstream engagement.
"Saudi Arabia can reverse this trend by offering competitive pricing and demanding stronger energy security guarantees. Acquiring downstream assets in India is a key part of that strategy," Sachdev suggested.
On the economic front, Saudi Arabia’s ambitious Vision 2030 reform plan is also facing budgetary pressures. According to Sachdev, meaningful investment and participation from Indian companies in Saudi energy infrastructure could help bridge financial gaps in the kingdom’s diversification efforts.
Source Name : Economic Times