India Exempts Saudi Fund from Foreign Portfolio Investment Rules. India took a significant step towards enhancing its financial cooperation with Saudi Arabia by exempting the Public Investment Fund (PIF) from some Foreign Portfolio Investment (FPI) regulations. The decision will enhance capital inflows and improve economic cooperation between the two countries.
Earlier, India’s FPI rules restricted foreign ownership to 10% in one company by combining investments from different sovereign entities into one. The limit curtailed the freedom of Saudi Arabia’s PIF and its subsidiaries to invest separately in Indian markets.
With the exemption, separate units of the Saudi fund can invest individually, and there is more flexibility in channelling capital into Indian equity markets without crossing regulatory limits.
Strengthening India-Saudi Economic Ties
The move comes after Indian Prime Minister Narendra Modi visited Saudi Arabia in April 2025, during which time the two countries decided to encourage investments in priority sectors including energy, infrastructure, and pharmaceuticals.
India, the third-biggest oil importer globally, is interested in luring long-term capital from Gulf countries, while Saudi Arabia seeks to grow its investments in rapidly growing economies as part of Vision 2030 diversification.
Saudi Arabia’s Investment in India
Saudi Arabia’s Public Investment Fund, which is among the world’s biggest sovereign wealth funds, oversees assets totaling around $925 billion. Its exposure in India presently amounts to $1.5 billion in Jio Platforms and $1.3 billion in Reliance Retail.
To speed up the actions of investment proposals, both countries established a high-level task force in 2024 to expedite Saudi Arabia’s $100 billion investment in India.
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Future Implications
This step is likely to boost Saudi investment in Indian equity markets leading to Financial inclusion. With major sectors being infrastructure and energy. India is also said to be looking into further tax relief for the Saudi fund as an incentive.
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