India and Saudi Arabia have discussed the possibility of starting a rupee-riyal trade mechanism as part of efforts to boost economic ties between the nations, an Indian minister revealed this week.
India – now Asia’s third-largest economy – has set up a mechanism to settle international trade transactions in Indian rupees (INR) with the emphasis on exports to boost global trade and respond to growing interest in the use of the rupee for trading purposes.
“Discussed ways to attract greater investment and further diversify bilateral trade to boost economic ties between India & Saudi Arabia,” Indian Trade minister Piyush Goyal wrote on Twitter, after a meeting with his Saudi counterpart Majid bin Abdullah Al-Kassabi.
During his two-day visit to Saudi Arabia to participate in a meeting of the India–Saudi Arabia Strategic Partnership Council, Goyal also met Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud.
Apart from exploring the possibility of a rupee-riyal trade mechanism, the nations also discussed trade diversification and expansion, removal of trade barriers, and fast-tracking authorisation and marketing of Indian pharmaceutical products in Saudi Arabia, the statement said.
India‘s trade balance with Saudi Arabia is tilted in favour of the Kingdom, as it is a key oil supplier to the world’s third-biggest crude importer and consumer.
In April-July, the first four months of this fiscal year to March 31, 2023, India‘s imports from Saudi Arabia rose by 93% to $15.5 billion while exports were up by about 22% to $3.5 billion, according to data from India’s Commerce ministry.
Crown Prince Mohammad Bin Salman, during his visit to India in February 2019, made an announcement to invest $100 billion in India.
The two countries affirmed their continued cooperation in joint ventures including a refinery on the west coast, investment in liquefied natural gas infrastructure and development of strategic reserves in India, the Indian statement said.
Aramco is partnering Abut Dhabi National Oil Co and Indian refiners in the joint venture company formed to build a 1.2 million barrels per day refinery on the Indian west coast.
- Reuters with additional editing by Jim Pollard