Context: Defence-Industrial Cooperation has become a major focus area between India and Saudi Arabia, as they further deepen the relationship and explore joint ventures and collaborations.
| Relevance of the Topic: Mains: Bilateral Relations: India-Saudi Arabia. |
Aspects of Defence Cooperation
- India and Saudi Arabia aim to enhance defence ties through technology transfer, joint ventures, and exchange of expertise. Both nations are focused on localising defence production.
- Saudi’s Vision 2030 aims to localise 50% of its defence spending.
- India has localised many defence technologies and is willing to share them with Saudi Arabia.
- India has opened its defence sector to Saudi investments, advocating the ‘invest, trade, localise’ approach.
- India’s defence exports to Saudi Arabia:
- Saudi Arabia has procured the 155mm Advanced Towed Artillery Gun System (ATAGS) from Bharat Forge. It has evaluated additional artillery systems from Indian manufacturers.
- Saudi Arabia has recently signed a $250 million ammunition contract with India’s Munitions India Limited. Saudi companies are keen on partnerships in shipbuilding, electronics, AI, and cybersecurity.
- Joint Exercises:
- Sada Tanseeq: Inaugural joint military exercise held in Rajasthan in 2024.
- Al Mohed Al Hindi: Bilateral Naval exercise commenced in 2022.
- Tarang Shakti: Saudi participated as an observer in India’s largest air exercise.
Importance of Saudi Arabia to India
- Energy Security:
- Saudi Arabia is India’s second largest supplier of crude oil (~18% of the total import). India also sources ~32% of its LPG requirements from Saudi Arabia.
- Saudi Arabian oil major ARAMCO has decided to partner in the Ratnagiri Refinery and Petro-Chemical Project in Maharashtra, a Joint Venture of US$ 44 billion billed as the world’s biggest.
- Bilateral Trade & Investment:
- Total bilateral trade is around $43.3 billion, in 2023-24. India is the 4th largest trading partner of Saudi Arabia.
- Saudi Arabia had expressed intent to invest about $100 billion in India.
- Saudi Arabia identified India as one of the Kingdom’s 8 Strategic Partner Countries under ‘Vision 2030’ to reduce Saudi Arabia’s dependence on oil and diversify its economy.
- Socio-cultural Relations:
- Of the 11 million Indians working in West Asia, 2.65 million are in Saudi Arabia.
- Saudi Arabia is a source of foreign remittances (up to $11 billion annually).
- India has the world’s 3rd largest Muslim population that’s why Saudi [have Islam’s holiest sites Mecca & Medina] becomes important in India’s strategic calculus.
- Strategic and Security Cooperation:
- Riyadh Declaration (2010) has raised the level of partnership to strategic partnership which will help to tackle terrorism and radicalization.
- Both cooperate on ensuring the security and safety of waterways in the Indian Ocean region and the Gulf region.
- Global Cooperation:
- India and Saudi Arabia have been working together within the G20 to reduce inequality and promote sustainable development.
- Both sides cooperate in climate change, green energy and disaster management.