Trade

New shipping route links Jeddah to major Indian ports

September 10, 2024, 9:25 AM

A container vessel docked at Jeddah Islamic Port, which handled 5.58m containers in 2023 — A container vessel docked at Jeddah Islamic Port, which handled 5.6m containers in 2023

Route intended to bolster trade ties
Service operated by PIF subsidiary
Logistics vital to diversification

Saudi Arabia has launched a new shipping route between Jeddah Islamic Port and Mundra and Nhava Sheva, two of India’s largest ports.

The 10-day service, operated by Folk Maritime Services, a subsidiary of the Public Investment Fund, started this month.

The new route aims to increase the movement of goods such as petrochemicals, aligning with Saudi Arabia’s Vision 2030 goal to establish itself as a global logistics centre and diversify its economy.

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India, Saudi Arabia’s fourth-largest trading partner, has experienced a 12 percent fall in trade with Gulf Cooperation Council (GCC) countries to $162 billion in 2023-24, largely due to New Delhi’s shift toward discounted Russian crude.

Despite this, Saudi Arabia remains a crucial player in India’s energy landscape, supplying 16.7 percent of its oil imports in 2023, making it the third-largest crude exporter to India.

Saudi exports to India totaled $30 billion in 2023, with imports at $11.6 billion, according to the General Authority for Statistics.

While non-oil trade between the two nations remains under pressure, new efforts such as Folk Maritime’s shipping route signal efforts to diversify and strengthen bilateral ties.

The launch coincided with a visit to Riyadh from India’s external affairs minister, Dr. S. Jaishankar, for the inaugural India-GCC joint ministerial meeting for strategic dialogue. Officials discussed boosting cooperation across sectors including trade, investment and infrastructure.

Saudi Arabia is also expanding its non-oil trade ambitions by enhancing credit facilities to exporters, with the Saudi Export-Import Bank providing $4.3 billion in financing and insurance in the first half of 2024, up 128 percent on the previous year.

The kingdom is leveraging its strategic location and infrastructure investments, such as the acquisition of the container ship M/V Folk Jeddah, to strengthen its position in global trade.

Folk Maritime has also expanded its regional presence through a vessel exchange agreement with Oman’s Asyad Line.

The service is part of Saudi Arabia’s broader strategy to enhance global supply chain resilience, expand maritime services and reduce its non-oil trade deficit.