India, Saudi Arabia reaffirm commitment to conclude bilateral investment treaty soon

New Delhi: India and Saudi Arabia on Wednesday reaffirmed commitment to conclude a proposed bilateral investment treaty (BIT) early to unlock robust two-way investment inflows and further deepen mutual cooperation, the Indian finance ministry said.

Both sides deliberated on the investment treaty at a meeting between finance minister Nirmala Sitharaman and Saudi Arabia's investment minister Khalid Al-Falih in the national capital.

Such treaties usually help in protecting and encouraging investments in each other's countries.


During Prime Minister Narendra Modi's visit to Saudi Arabia in April at the invitation of Crown Prince Mohammed bin Salman, both sides had agreed to expedite the BIT negotiations. In the budget for 2025-26, finance minister Nirmala Sitharaman announced a revamp of the BIT framework to draw foreign investors.

Subsequently, senior government officials had said India was pursuing BITs with over a dozen countries, including Saudi Arabia, Qatar, Israel, Oman, the EU, Switzerland, Russia, and Australia. The move is part of the broader efforts by the government to draw foreign investors at a time when the country is moving fast towards emerging as the world's third-largest economy. The government is also taking steps to boost investments in manufacturing.

FDI inflows from Saudi Arabia touched $3.3 billion over 25 years through March 2025, or just 0.45% of the total, with experts pointing at potential for far larger inflows.

However, Saudi Arabia is a major trade partner. While India's exports to Saudi Arabia were to the tune of $12 billion in FY25, its imports, mainly comprising petroleum products, were in excess of $30 billion. Between 1996 and 2016, India had signed BITs with dozens of countries on the basis of an old template that led to litigations in several cases. This prompted the government to firm up a new template in 2016 and started to negotiate on the basis of that. However, it now feels that even the 2016 template requires to be revised, officials had said earlier.