Context: Recently, the Indian Prime Minister was on a two-day state visit to Saudi Arabia. India’s Prime Minister and Saudi Crown Prince co-chaired the 2nd India–Saudi Arabia Strategic Partnership Council (SPC) at the Royal Palace in Jeddah, Saudi Arabia.
Relevance of the Topic:Mains: Bilateral Relations: India and Saudi Arabia.
Major Highlights of the Visit
The visit helped deepen the India-Saudi Arabia partnership that has been on a remarkable growth trajectory since 2016. The countries:
- Reinforced their traditional energy partnership by sealing an agreement on setting up two oil refineries in India. India is the world’s third-largest importer and consumer of oil, relying on imports for >85% of its crude oil requirements.
- Added two new ministerial committees – one on defence and another on tourism – under the Strategic Partnership Council (SPC).
- Vowed to conclude bilateral investment treaty as early as possible. The two countries agreed to start talks to conclude the India-Gulf Cooperation Council (GCC) Free Trade Agreement.
- Concluded a preliminary pact on cooperation in space activities for peaceful purposes.
- Pledged to work together in new and emerging technology domains like artificial intelligence, cybersecurity, and semiconductors.
- Pledged deeper cooperation in maritime border security, combating transnational crime, narcotics, and drug trafficking.
India-Saudi Arabia Relations
- Economic Relations: India is the 2nd largest trade partner of Saudi Arabia whereas Saudi Arabia is the 5th largest trading partner of India. In FY24, bilateral trade stood at USD ~43 billion.
- Energy Partnership: Saudi Arabia was India’s 3rd largest crude and petroleum products sourcing destination for FY24. Beyond joint projects in the refining and petrochemical sector, the countries are exploring innovative uses of hydrocarbons; grid automation, connectivity, and security; energy storage; green hydrogen transport.
- Strategic Partnership Council: SPC was set up in 2019 with two ministerial committees, one focusing on political and security issues and the second looking at the economy and investment. It serves to steer the bilateral relationship to include newer areas of cooperation like green energy, health, technology, and agriculture.
- Defence Cooperation: The countries recently concluded their first land forces exercises (SADA TANSEEQ) and two rounds of naval exercises (AL MOHED AL HINDI). In 2024, an agreement was signed for defence export from India to Saudi Arabia worth USD 225 million.
- 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.
- People-to-People ties: Around 2.7 million Indian nationals reside in Saudi Arabia, reflecting the strong people- to-people bonds. The annual Hajj pilgrimage is another important component of India-Saudi Arabia bilateral relations.
Significance of Saudi Arabia:
- Look West Strategy: Improving relations with Saudi Arabia is an integral part of India’s “Look West Strategy,” which seeks to bind India closer to the countries of this region.
- Security Cooperation: Saudi Arabia has been sending back Indian fugitives wanted for criminal and terrorist activities in India. Saudi Arabia can use its political and financial clout to get Pakistan to halt anti-India terrorism.
- Investment Potential: India is looking at attracting Saudi Arabia’s Public Investment Fund to invest in its National Investment and Infrastructure Fund (NIIF). Saudi Arabia has pledged an investment of up to $100 billion in India.
- Stakeholder in IMEEC: India-Middle East-Europe Economic Corridor was unveiled in 2023. Saudi Arabia is a key member of this ambitious and cost-effective ship-to-rail transit network.
India presents itself as a solid strategic and economic partner to Saudi Arabia, as Riyadh seeks strategic autonomy and establishes itself as a global middle power.