India and Saudi Arabia will collaborate on establishing two refineries and petrochemical projects in India, according to an Indian government release today.
Indian prime minister Narendra Modi met Saudi prime minister Mohammed bin Salman in Jeddah on 22 April, as part of the India–Saudi Arabia Strategic Partnership Council.
Saudi Arabia in 2019 had pledged to invest $100bn in India in multiple areas including energy, petrochemicals, infrastructure, technology, fintech, digital infrastructure, telecommunications, pharmaceuticals, manufacturing and health.
The government did not disclose further details, but industry sources said that one of the two refineries might be Indian state-run BPCL's planned refinery in Andhra Pradesh, which Saudi Arabia's state-controlled Saudi Aramco may join as an investor. The other one might be a refinery in Gujarat, under a partnership with Indian upstream firm ONGC and Aramco.
But plans for a 1.2mn b/d refinery in Ratnagiri in collaboration with IOC and Adnoc have mostly been ruled out, because of logistical issues relating to the size of the refinery and land acquisition hurdles, among others.
Saudi Arabia is the third-largest crude supplier to India, making up 15pc or 712,000 b/d of India's total imports in January-March, data from oil analytics firm Vortexa show. Saudi Arabia's share in the Indian market has declined, after Russia became India's biggest supplier following its war with Ukraine.
Modi's trip to the Middle East comes close on the heels of US vice president JD Vance's visit to India on 21 April. The visit included negotiations for an India-US bilateral trade agreement and efforts towards enhancing co-operation in energy, defence, strategic technologies and other areas.
JD Vance in India
Vance said on 22 April at his speech in Jaipur that India will benefit from US energy exports and said the US wants to help India explore its own considerable natural resources, including its offshore natural gas reserves and critical mineral supplies.
US president Donald Trump has pushed India to step up its purchases of US crude and LNG. Crude imports from the US doubled on the month to 289,000 b/d in March, of which 65,000 b/d was Canadian Cold Lake crude, according to trade analytics firm Kpler.
The visits come at a time when geopolitical and trade uncertainty has risen, because of Trump's volatile tariff policies.
