The Saudi Arabian food and beverage market is experiencing significant growth. In 2024, the market size is estimated to be US$ 23.5 billion and is projected to reach US$ 27.8 billion by 2029, reflecting a CAGR of 3.44% during this period. This market growth is driven by several factors, like the growth in e-commerce, hypermarkets and supermarkets, high disposable incomes and increasing investments in the country’s food industry.
India is the second largest food and beverage exporter to Saudi Arabia, with exports at 2.1 billion in 2023-24. Top categories of exports include milled rice, meat, coffee, tea, spices, fruits and nuts. IBT analyses India’s F&B export trends to Saudi Arabia, which show very encouraging growth in some key segments that can be capitalised in the coming years.
Image source: Shutterstock
India and Saudi Arabia share a long-standing and friendly relationship, underscored by historical economic and socio-cultural connections. Diplomatic relations between the two countries were officially established in 1947. A significant milestone in the bilateral relationship occurred during Crown Prince Mohammad bin Salman’s visit to India in February 2019. This visit was marked by an announcement of approximately US$ 100 billion in Saudi investments in India, alongside the signing of six Memoranda of Understanding (MoUs) and agreements. These agreements spanned various sectors, including investment, tourism, housing, and the exchange of audio-visual programs. A notable outcome was Saudi Arabia’s agreement to join the International Solar Alliance (ISA), an initiative launched by India’s Prime Minister Shri Narendra Modi.
Trade plays a crucial role in the bilateral ties. Saudi Arabia is India’s fifth-largest importer, while India is its fourth-largest trade partner. In FY 2024, bilateral trade reached nearly US$ 43 billion. India’s exports to Saudi Arabia totaled US$ 11.5 billion, while imports amounted to US$ 31.4 billion. Notably, oil constitutes around 77.9% of India’s imports fr0m Saudi Arabia.
In recent years, Indian investments in the Kingdom of Saudi Arabia have surged, reaching approximately US$ 3 billion by August 2023. This impressive growth highlights the expanding footprint of Indian companies across various sectors such as management consultancy, construction, telecommunications, IT, financial services, and pharmaceuticals. Key players in this investment wave include Larsen & Toubro (L&T), Tata Consultancy Services (TCS), Wipro, and Telecommunication Consultancy India Ltd. (TCIL). Other notable contributors are Shapoorji Pallonji, Infosys, and major airlines like Air India and SpiceJet.
With around 2,783 Indian companies operating in Saudi Arabia, either as joint ventures or wholly owned entities, the economic ties between the two nations are deepening. This substantial investment underscores India’s growing role as a key economic partner for Saudi Arabia, creating significant opportunities across diverse sectors, further backed by the latter’s ambitious Vision 2030 reforms.
Food and beverage exports from India to Saudi Arabia were valued at approximately US$ 2.1 billion in 2023, showing a 5-year CAGR of 6.11%, constituting about 20% of total exports to KSA. India is the second largest F&B exporter to Saudi Arabia and accounts for around 12% of Saudi Arabia’s total F&B imports, highlighting the significant role of this sector in their economic relationship. The primary F&B imports from Saudi Arabia to India are crude soybean oil and dates, which together account for 88% of total US$ 34 million worth of F&B imports.
Source: ITC Trade Map
The India-UAE Free Trade Agreement (FTA) has positively impacted trade by enhancing economic ties between India and the UAE, which in turn has facilitated greater trade with other Gulf countries (including Saudi Arabia). The anticipated GCC-India FTA promises to further bolster this by reducing tariffs, improving market access, and encouraging investment, potentially leading to increased economic integration and trade efficiency across the region.
Market Size & Insights
The government has launched a number of initiatives to enhance ease of doing business, promote economic diversification, and boost growth in the retail sector. These include the development of mega shopping complexes and entertainment hubs. In addition, the government is working to encourage local retail entrepreneurship through support for SMEs. Furthermore, the country’s Vision 2030 plan emphasises on enhancing retail competitiveness and innovation.
Its food and beverage market is characterized by its significant reliance on imports, with approximately 75% of its national food consumption being sourced from abroad. This makes it the largest food importer in the Middle East.
Saudi Arabia’s top imports are cereals, meat, dairy products, miscellaneous edible preparations and fruits & vegetables. In fact, the rise in dairy product consumption, including milk, is an important trend to watch, bolstered by heightened awareness of the benefits of dairy products and a growing fitness trend.
The country’s milk production capacity can exceed 7 million liters per day, equating to over 18 million bottles daily. To support this scale of production, more than 10,000 trucks are involved in transporting and distributing dairy products each day, with approximately 38,000 retail stores receiving these products daily. This infrastructure underscores the critical role of dairy in the Saudi food and beverage market and highlights the sector’s dynamic growth and potential for expansion.
Halal certification is essential for exporting food and beverage products to Saudi Arabia. It is a differentiating factor which determines how well a product does in the country.
Source: ITC Trade Map; figures in US$ million
Semi-milled or wholly milled rice, particularly Basmati, remains the dominant product, making up about 62% of India’s total food and beverage exports to the country. Other notable exports include meat, coffee, tea, spices, fruits, and nuts.
Hitesh Mittal, Director of KLM Overseas, highlights Basmati rice as a growing export commodity from India to Saudi Arabia. “Basmati rice is increasingly popular in the Saudi market,” Mittal notes. “However, the market is currently dominated by a few large players. There is significant potential to expand by developing a network of importers through trade shows and other methods. This strategy could not only enhance market competition but also improve profit margins for exporters by diversifying the market and reducing dependency on a few major players,” he adds.
Indian spices are in high demand across GCC countries, including Saudi Arabia, where they are celebrated for their distinctive aroma, texture, and flavor. Saudi Arabia’s primary imports from India feature spices such as pepper, chili, turmeric, ginger, and cardamom.
Farooq Amin, Director of Kanwal Foods and Spices Pvt. Ltd., highlights the burgeoning market for Indian spices in Saudi Arabia. “Saudi Arabia has proven to be a massive market for Indian spices with a remarkable record over the last three years,” Amin notes. “The significant presence of Indians in the region, coupled with a growing appetite for high-quality spices, has driven substantial market growth. All types of spices, from raw to blended, have found a foothold, but chilis and turmeric stand out due to India’s dominance in these products and limited outside competition.”
Beyond spices, India is also poised to capitalize on emerging opportunities in agricultural exports, including fresh or dried oranges, fresh or chilled tomatoes, and fresh or dry cashew nuts (in shell). Additionally, there is growing interest in husked or brown rice and wheat residues like bran, sharps, and pellets.
Fastest growing Indian F&B exports to Saudi Arabia
Source: ITC Trade Map, figures show CAGR during 2017-22
Our analysis of the data shows that current penetration in some product categories is extremely high, including rice (75%), raw beet sugar (56%), raw cane sugar (26.6%), fruit and vegetable juice unfermented (52.9%), frozen bovine cuts (44.2%) and frozen shrimps and prawns (68.7%). The above infographic shows some of the fastest growing exports from India to Saudi Arabia over a five-year period. This shows a very positive prospect of exports from India to KSA.
The robust economic partnership between India and Saudi Arabia is poised for continued growth, particularly in the food and beverage sector. With India’s expanding role as a key F&B exporter to Saudi Arabia, the potential for increased trade and investment is substantial. The dynamic market trends in Saudi Arabia, driven by Vision 2030, highlight opportunities for Indian businesses to deepen their presence in the region.
As both nations continue to strengthen their bilateral ties, the future looks promising for mutually beneficial collaborations across various sectors, particularly in F&B. The growing demand for Indian products, such as Basmati rice, spices, and other agricultural exports, further underscores the significance of this relationship. By leveraging these opportunities, India can further solidify its position as a leading F&B exporter to Saudi Arabia, enhancing economic ties and fostering long-term prosperity in both nations’ food and beverage industries.
Interested in growing your F&B exports to Saudi Arabia? Contact Nisha Parveen at researchdesk@tpci.in with your specific queries and we will certainly get back to you!
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