India, Saudi Arabia Sign Major Textile MoU to Boost Cooperation and Double Trade Volume

India and Saudi Arabia Forge Landmark Textile MoU, Aim to Double Bilateral Trade

NEW DELHI, INDIA – In a strategic move set to reshape regional trade dynamics, India and Saudi Arabia are finalizing a landmark Memorandum of Understanding (MoU) designed to dramatically boost their bilateral textile and apparel trade. The agreement, expected to be sealed in the coming months, marks a significant step in deepening economic ties and shifting the partnership from commodity-based exchange to high-value manufacturing collaboration.

The proposed MoU, advanced by officials from India’s Ministry of Textiles and their Saudi counterparts, will focus on key areas like ready-made garments (RMG), technical textiles, and man-made fibres (MMF). The pact also aims to promote niche sectors such as handloom, handicrafts, and carpets, creating a comprehensive framework for cooperation.

Bridging a Multi-Billion Dollar Gap

The potential for growth is substantial. Saudi Arabia's annual textile import market is valued at a staggering $6.27 billion. Currently, India holds the position as the Kingdom's second-largest textile supplier, but with an export value of approximately $517.5 million, there is a significant opportunity to capture a larger share of the market, primarily dominated by China.

This MoU is strategically designed to bridge that gap by facilitating better market access, offering potential duty concessions, and encouraging joint production programs. The ultimate goal is to significantly increase India's footprint in the lucrative Saudi textile market.

Investment and Integrated Value Chains: The Core of the Partnership

A central pillar of the new agreement is fostering cross-border investment and building integrated regional value chains. Saudi industry officials have shown keen interest in investing in India’s robust ready-made garment industry and technical textile clusters.

This synergy is naturally complementary. Saudi Arabia's strong petro-chemical industry provides the essential raw materials for man-made fibre production, while India offers cost-competitive, large-scale manufacturing expertise and a skilled workforce. By linking Saudi raw material production with Indian manufacturing prowess, the partnership can create a powerful, efficient supply chain from fibre to finished apparel, positioning the Gulf region as an emerging manufacturing hub.

Sustainability and Skills: A Forward-Looking Framework

The cooperation extends beyond mere trade volumes. Both nations are embedding principles of sustainability and innovation into the proposed framework. This includes a focus on eco-friendly fibre manufacturing, resource-efficient production methods, and skills development programs. Supporting Small and Medium Enterprises (SMEs) in both countries is also a key objective, ensuring the benefits of the partnership are widely distributed.

For India, this MoU is a crucial opportunity to diversify its export basket and strengthen its manufacturing base. For Saudi Arabia, it aligns perfectly with its Vision 2030 goal of diversifying the economy away from hydrocarbons, building local industrial capacity, and forging resilient, non-oil trade partnerships.

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The Road Ahead

Negotiations are reportedly "progressing very fast," with an expectation to finalize the agreement within the next quarter. The MoU is also expected to include institutional support such as joint exhibitions, textile fairs, and co-participation in trade events to enhance visibility and networking for businesses from both nations.

For stakeholders in the global textile industry, this impending agreement signals a major shift. It represents a blueprint for how bilateral partnerships can combine supply-chain integration, manufacturing collaboration, and technology transfer for mutual economic gain. As the final details are ironed out, the India-Saudi textile MoU is poised to become a cornerstone of economic cooperation in the Middle East and South Asia.