7 PM | Prince and the PM| 29th October 2019

Context:India-Saudi Arabia Relations

More in news:

• Prime Minister Narendra Modi is in Riyadh on a two-day visit, during which he is scheduled to attend the third edition of Saudi Arabia’s high-profile annual financial conference and hold bilateral talks with King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman.
• He will deliver the keynote address under the title ‘What’s next for India?’ at the Future Investment Initiative, popularly known as “Davos in the Desert”.
• During Modi’s visit, India and Saudi Arabia will sign an agreement on establishing the India-Saudi Arabia Strategic Partnership Council, in a bid for strategic depth and focus to their growing relationship. 

India and Saudi Arabia Relations:

• Political Relations:
• India and Saudi Arabia enjoy cordial and friendly relations reflecting the centuries old economic and socio-cultural ties. The establishment of diplomatic relations in 1947 was followed by high-level visits from both sides.
• In the recent times, the historic visit of King Abdullah to India in 2006 resulted in signing of ‘Delhi Declaration’ imparting a fresh momentum to the bilateral relationship. The visit provided the framework for cooperation in all fields of mutual interest.
• The reciprocal visit by Prime Minister Dr. Manmohan Singh to Saudi Arabia in 2010 raised the level of bilateral engagement to ‘Strategic Partnership’ and the ‘Riyadh Declaration’ signed during the visit captured the spirit of enhanced cooperation in political, economic, security and defence realms.
• The visit of Prime Minister Narendra Modi to Riyadh from April 2-3, 2016 could be seen as a turning point in our growing engagements with the Kingdom of Saudi Arabia, which has taken an upward strategic direction.

• Economic & Commercial Relations: 
• Saudi Arabia is our 4th largest trade partner and is a major source of energy as we import around 18 % of our crude oil requirement from the Kingdom.
• In 2018-19 (As per Directorate General of Foreign Trade (DGFT)), the India-Saudi bilateral trade has increased by 23.83 % to US $ 34.03 billion. During this period, our imports from Saudi Arabia reached USD 28.47 billion, registering an increase of 29.04 % over previous year whereas our exports to Saudi Arabia reached USD 5.55 billion registering an increase of 2.61 % over previous year.
• The current bilateral trade (April – August, 2019 provisional figures) is valued USD 14.06 billion.
• According to Saudi Arabian General Investment Authority (SAGIA), there are 322 Indian companies as joint ventures/100% owned entities of worth USD 1.4 billion in the Kingdom till Dec, 2017.
• Major Indian Companies such as L&T, TATAs, Wipro, TCS, TCIL, Shapoorji & Pallonji, etc. have established strong presence in Saudi Arabia. SAGIA is in talks with Indian Start-Ups such as OYO, Delhivery, Firstcry, Grofers, Policy Bazaar, Paytm to enter the Saudi market.
• Saudi Arabia is the 15th largest market in the world for Indian exports and is destination to 1.85% (2017-18) of India’s global exports.
• On the other hand, Saudi Arabia is the 3rd largest source (4.74% in 2017-18) of India’s global imports.
• For Saudi Arabia, as per 2017 data, India is the 4th largest market for its exports, accounting for 8.88 % of its global exports. In terms of imports by Saudi Arabia, India ranks 7th and is source of around 4.13 % of Saudi Arabia’s total imports.

• Cultural Relations:
• A cultural delegation visited the Kingdom to participate in the ‘Indian Cultural Week’, organized in Riyadh in collaboration with the Saudi Ministry of Culture in 2012.
• India successfully participated as ‘Guest of Honour’ in the 32nd edition of the prestigious Saudi National Festival of Heritage and Culture – Janadriyah in February 2018. Former External Affairs Minister Smt. Sushma Swaraj jointly inaugurated the India Pavilion with His Majesty King Salman. The India pavilion comprised the friendship wall, traditional & contemporary India, business stalls, states part, flavours of India and information desk.
• Yoga was announced as a ‘sports activity’ in November 2017.
• 4th International Day of Yoga was celebrated on June 21, 2018 with enthusiasm and fervor in the prestigious Al-Madi Park of the King Abdulaziz Historical Centre, Riyadh with full support of the Saudi authorities. This marked the first celebration of Yoga in public domain in the Kingdom.
• Since then, the event witnessed huge participation from Saudis, diplomatic corps, officials, journalists, businessmen and Indian diaspora.

• Indian Community in Saudi Arabia: 

The 2.7 million (as of Dec, 2018) strong Indian community in Saudi Arabia is the largest expatriate community in the Kingdom and is the ‘most preferred community’ due to their expertise, sense of discipline, law abiding and peace loving nature.

Saudi Arabia’s Future Investment Initiative, popularly known as “Davos in the Desert”:

• It seeks to elevate Saudi Arabia’s international economic engagement and was launched in 2017.
• It is part of Prince Mohammed’s efforts to rapidly transform Saudi economy under the “Vision 2030” that he unveiled in 2016.
• Saudi Arabia’s economic transformation envisaged by Prince Mohammed, also known by his initials MbS, is ambitioned to diversify the Saudi economy from its historical reliance on the oil business and develop manufacturing and service sectors through liberalisation at home, and deeper integration with the world.
• It is founded on a tripod – the kingdom’s special status in the Arab and Islamic worlds, its strategic location at the trijunction of Africa, Europe and Asia, and its expansive investment capability.
• The objective is to generate significant and sustainable benefits for the young and rapidly growing Saudi population.

Some important initiatives by Saudi Arabia:

• There is an attempt to turn Saudi Aramco, the national oil producing company, into a global conglomerate.
• Other reforms include easing the restrictions on foreign direct investment, promoting tourism and the entertainment industry, development of the debt market, a bankruptcy law, introduction of VAT to enhance non-oil revenue generation, cuts in water and power subsidies, cash handouts to the needy, and a massive anti-corruption campaign.
• Saudi Arabia is now ranked 62 in the global rankings, just above India. The World Bank, in its latest report on the ease of doing business, offered praise for Saudi Arabia’s economic reforms and named the kingdom one of the top ten “global business climate improvers” in 2019.
• Social reforms:
• limiting the power of the religious police in public places
• granting more rights to women
• lifting the 35-year-old ban on cinema halls
• letting restaurants play music and permitting large music concerts.

Scope for India:

• Given the deep interconnections between the Gulf and the Subcontinent, the drift towards conservatism in the Arabian peninsula has had multiple negative effects on India and its neighbours, especially in altering the balance between religion, politics and the state. The reform of the Saudi society, at the very heart of the Islamic world, will hopefully help to reverse some of these negative effects. 
• The reform agenda of Prince Mohammed offers an opportunity for the PM to lend the relationship a durable strategic dimension.
• The MbS impact on Saudi Arabia’s international policies is already evident in the growing Saudi interest to deploy massive capital into India. Aramco’s decision to take a large stake in the oil business of Reliance could be the beginning of a new economic era in bilateral relations if Delhi can create the conditions for rapid growth in Saudi investments in India.

Source: https://indianexpress.com/article/opinion/columns/narendra-modi-saudi-arabia-visit-mohammed-bin-salman-al-saud-6092232/