India’s Trade Deficit With Saudi Arabia Declines By $11.1 Bn YoY in FY24: Report

Backed by an increase in exports and a drastic decline in imports, India’s trade deficit with Saudi Arabia declined by USD 11.1 billion in FY24 as compared to FY23. The country registered a trade deficit of USD 20.2 billion as compared to USD 31.3 billion in FY23, data from the Rubix Country Insights revealed. India’s exports to Saudi Arabia stood at USD 11.6 billion in FY24 as compared to imports worth USD 31.8 billion in the previous financial year.

Saudi Arabia is India’s fifth-largest trade partner and India is Saudi Arabia’s second-largest trade partner. In the last five years from FY20 to FY24, India’s imports from Saudi Arabia stood at USD 151 billion. The imports were on an upward trajectory from FY21 to FY23 when it increased from USD 16.2 billion in FY21 to USD 42 billion in FY23. However, the imports came down to USD 31.8 billion in FY24.

On the exports front, India’s exports to Saudi Arabia stood at USD 43.2 billion in the last five years from FY20 to FY24. The exports have been on an upward trajectory since FY21 as it went up from USD 5.9 billion in FY21 to USD 11.6 billion in FY24.

Major commodities that are exported from India to Saudi Arabia are rice, vehicles, petroleum products, and tiles. The share of rice in total exports of India to Saudi Arabia declined from 16 per cent in FY20 to 12 per cent in FY24.

Saudi Arabia is a key energy partner for India. As per the data, petroleum oils, including crude oil, accounted for nearly 69 per cent of India’s total imports from the Kingdom of Saudi Arabia in FY24. However, the share of petroleum oils in India’s total imports from Saudi Arabia came down from 76 per cent in FY20.

The reason is attributed to India’s efforts in diversifying its oil imports from other countries. After the commencement of the Russia-Ukraine conflict in 2022, Russia began supplying crude oil to India at discounted prices. Thus, the petroleum oils from Saudi Arabia declined by nearly 24 per cent in FY2024 compared to the previous year, as per the report.