Saudi Gazette report

NEW DELHI — India has granted Saudi Arabia's Public Investment Fund (PIF) an exemption from restrictive foreign portfolio investment rules, paving the way for greater Saudi capital flows into Indian markets, according to Reuters.

Previously, Indian regulations required pooling of investments from various sovereign entities and capped foreign ownership at 10% in any single listed company — limiting the ability of PIF and its affiliates to invest independently.

The new exemption removes these barriers, offering the Saudi sovereign wealth fund more flexibility to deploy capital directly into Indian equity markets.

One source explained that under the earlier rules, PIF subsidiaries were unable to make separate investments, restricting the fund’s operations in one of the world’s fastest-growing major economies.

The exemption now allows these subsidiaries to invest individually without breaching regulatory limits.

The move follows Indian Prime Minister Narendra Modi’s visit to Saudi Arabia in April, where both countries committed to deepening investment cooperation in sectors such as energy, infrastructure, and pharmaceuticals.

A bilateral investment treaty is currently under negotiation.

Saudi Arabia’s PIF, which manages around $925 billion in assets, currently holds investments in India totaling $1.5 billion in Jio Platforms and $1.3 billion in Reliance Retail.

India, meanwhile, is keen to attract long-term capital from energy-rich Gulf countries to support its infrastructure development and economic ambitions.

In 2024, the two countries established a high-level task force with a goal of mobilizing up to $100 billion in Saudi investment into India.

A joint statement released during Modi’s visit noted “significant progress” in resolving tax-related issues and affirmed both nations’ commitment to finalizing the investment treaty “as soon as possible.”

Media reports suggest that India is also considering further tax incentives for PIF to support investments in critical sectors such as infrastructure and energy.