Saudi Arabia to Foster Indian Start-ups with Establishment of Sovereign Wealth Fund Office

12 Sep, 2023

Saudi Arabia to Foster Indian Start-ups with Establishment of Sovereign Wealth Fund Office

Saudi Arabia is contemplating the establishment of an office for its sovereign wealth fund (SWF) in India, with the aim of streamlining investment opportunities in the country. Additionally, the nation is formulating plans to allocate funds towards Indian start-ups through the avenue of venture capital.

Khalid A. Al Falih, Saudi Arabia's Investment Minister, revealed on a Monday that he intends to dispatch a delegation to India within the forthcoming weeks to assess the viability of this initiative. He articulated that his delegation would conduct comprehensive explorations in locations such as Gift City, Mumbai, and New Delhi.

Al Falih unequivocally stated, "I am willing to reciprocate your offer and declare today our commitment to inaugurate an office in India to facilitate investments. Our focus is on fostering a two-way investment facilitation process."

This significant announcement took place during the India-Saudi Arabia Investment Forum, where Piyush Goyal, India's Minister of Commerce and Industry, was also present. During the forum, the Saudi Minister emphasized his keen interest in investing in Indian start-ups that have the potential to cater to the Saudi market through the utilization of venture capital funds.

The Investment Minister elaborated further, saying, "In the near future, we aspire to forge a collaborative agreement between our national venture capital fund and its Indian counterpart, enabling the seamless flow of venture capital and funding to start-ups that can harness the opportunities present in both markets."

It is noteworthy that Saudi Arabia's investments in India have reached a substantial sum of $3.22 billion, spanning from April 2000 to June 2023. These investments have predominantly been channeled by the government-owned Public Investment Fund (PIF) into well-established Indian companies beyond their initial start-up phase.

In response to Saudi Arabia's burgeoning interest in India, India's Minister of Commerce and Industry put forward a proposal suggesting India's intention to establish an office in Riyadh, Saudi Arabia. This office would be established in collaboration with the Federation of Indian Chambers of Commerce and Industry (FICCI), Invest India, and key officials from the commerce and industry ministry.

The Indian Minister enthusiastically stated, "We have extended invitations to PIF, other Sovereign Wealth Funds, and potential investors to set up offices in the Gujarat International Finance Tec-City (GIFT City). Khalid Bhai and I are both deeply committed to this endeavor. We have mutually agreed that within the next six months, we will transition these plans into tangible actions on the ground."

GIFT City, located in Gujarat, is a versatile special economic zone primarily focused on facilitating financial services and international trade.