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India Saudi Arabia Relations touched a new high after the conclusion of the first summit level meeting of the India Saudi Arabia Strategic Partnership Council (SPC). India Saudi Arabia Strategic Partnership Council was co-chaired by Saudi Arabia’s Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi after the conclusion of G-20 summit 2023. India Saudi Arabia also signed eight agreements which will further strengthen the relationship between the two countries.
| Major Outcomes of the recent India Saudi Arabia Strategic partnership Council Meeting 1. Upgradation of the hydrocarbon energy partnership to a comprehensive energy partnership for renewable, petroleum and strategic reserves. 2. Expedite the implementation of the USD 50 billion West Coast refinery project. 3. Creation of a joint task force for channelising the $100 billion Saudi investment in India. 4. Expedite negotiations for a free trade agreement between India and the Gulf Cooperation Council of which Saudi Arabia is a member. 5. Exploration of possibilty of trading in local currencies including the acceptance of RuPAY card in Saudi Arabia for the benefit of the Indian community and the Hajj/Umrah pilgrims. |
Read More–India Saudi Arabia Strategic Partnership Council
A Brief history of India Saudi Arabia Relations
| Initial Warm Phase –India Saudi Arabia established diplomatic relations in 1947 which was followed by high-level visits from both sides. King Saud of Saudi Arabia visited India in 1955 and the Prime Minister Jawaharlal Nehru visited the Saudi Arabian Kingdom in 1956. |
| Cold Phase During Cold War-During the Cold War, Saudi Arabia put itself in the American camp but India followed the policy of non alignment.This dampened the initial warmth in the relations. Also,the defeat of Pakistan in 1971 followed by the oil crisis of 1973 and Soviet intervention in Afghanistan further deteriorated the India Saudi relation. |
| Normalisation of Relationship-In January 2006, King Abdullah bin Abdul-Aziz visited India which was the first visit by a Saudi monarch in 51 years and the first top level bilateral visit since Indira Gandhi’s trip to Saudi Arabia in 1982.The Delhi Declaration 2006 was signed which aimed to strengthen ties in areas of energy, trade, science and technology, education, health, and political cooperation on regional and international issues. |
| Deepening of Strategic Relationship-The Riyadh Declaration 2010 furthered on the Delhi Declaration 2006 agreement and focused on enhancing cooperation on counter terrorism, money laundering, narcotics, arms and human trafficking, and defence and economic cooperation.PM Modi visited Riyadh in 2016 and in 2018 met Saudi Crown Prince in Argentina on the side-line of the G-20 summit.Saudi Crown Prince held bilateral talks with PM Modi after the recently concluded G-20 summit.India Saudi Arabia have further deepened their strategic relationship by forming Strategic Partnership Council(SPC). |
What is the significance of India Saudi Arabia relations?
India and Saudi Arabia hold a lot of importance for each other and hence India Saudi Arabia relationship is seen as one of the most promising partnership in the 21st Century.
Geo-Political Significance
Saudi Arabia’s growing geopolitical importance-Saudi Arabia has substantial geopolitical influence in the regional politics of Middle East especially on the Israeli-Palestinian peace process. Saudi Arabia has cultivated ties with major powers such as the US, Russia, China and the EU.This increasing geopolitical profile of Saudi Arabia has to led to deepening of India’s geopolitical engagement with Saudi Arabia.
Deepening of Chinese geopolitical relation with Saudi Arabia-China has deepened its geopolitical relation with Saudi Arabia.China has initiated the Saudi Arabia-Iran relations reconciliation. Thus it becomes important for India to engage with Saudi Arabia in the geopolitical arena to counter the growing Chinese geopolitical influence.
Geo-Strategic Significance
Counter Terrorism Cooperation-Saudi Arabia has a substantial influence over Pakistan. India can use this influence to bring Pakistan to negotiating table for talks on terrorism.Saudi Arabia has shown an understanding of India’s terrorism-related concerns and has agreed to work with India in countering the global menace.
Defence cooperation-Saudi Arabia has limited experience in countering threats from groups like Houthi militias.Both countries have conducted joint military exercises on tackling terrorism in the mountainous areas bordering Yemen.They are exploring the possibilities of joint development and production of defence equipments.
Fighting piracy and protection of oil routes-Piracy in the Gulf of Aden and surrounding regions remains a threat to Sea Lines of Communication.There is also an increase in naval cooperation between India and Saudi Arabia with two editions of the bilateral naval exercise-Al Mohed al Hindi conducted to protect the world’s oil artery the Strait of Hormuz.
Geo-Economic Significance
Saudi Arabia’s Vision 2030-Vision 2030 plan of Saudi Arabia calls for diversification of the oil-dependent economy by attracting tourism and foreign investment and turning it into a global hub for business and culture. Saudi Arabia needs India’s technological assistance to execute Vision 2030.This Vision opens up immense opportunities for Indian businesses like the IT sector and the infrastructure businesses.
Energy security-Saudi Arabia is a source of 17% or more of crude oil and 32% of LPG requirements of India and thus a key pillar of India’s energy security. With US sanctions on Iran, India needs to import crude oil from other sources to meet its energy need. Saudi Arabia have offered India with additional crude oil supplies to meet India’s growing needs.
Investment-Saudi Arabia has one of the largest Sovereign Fund in the World. It is an important nation to invest fund in India particularly in National Infrastructure and Investment fund (NIIF).Saudi oil giant Aramco and the AbuDhabi National Oil Company have acquired 50% stake in the $44 billion project in Ratnagiri, Maharashtra.
Trade-India is Saudi Arabia’s second-largest trade partner and Saudi Arabia is India’s fourth-largest trade partner. Bilateral trade between the countries in FY2022-23 was valued at $52.76 billion.Trade between the countries is going to increase in the coming decades.
Cultural Significance
Cultural Connect- Saudi Arabia facilitates Hajj pilgrimage to over 1,75,000 Indians every year. This is why Saudi Arabia is culturally significant for India.
Indian Diaspora- The 2.7 million strong Indian community in Saudi Arabia is the ‘most preferred community’ in Saudi Arabia and act as gents of soft power diplomacy. They send remittances of over US $11 billion annually to India.
What are the Challenges in India Saudi Arabia Relations?
However this deepening relation between India and Saudi Arabia also face several challenges which have been enumerated below.
Complexity of Middle East Politics-The politics of the Middle East are complex and multidimensional. There exist several faultlines like Saudi Arabia-Iran Rivalry, Saudi Arabia-Isreal animosity. India faces a complex challenge to manage its relationship with all these countries without antagonising others.
Pakistan Factor-The Pakistan factor is also an important challenge in the development of strong India-Saudi Arabia relationship. Saudi Arabia is one of the largest granter of loans to Pakistan. Pakistan has been using its territory to breed terrorism and hatred towards India.This has also led to some discomfort in deepening of India Saudi Arabia Relationship in the field of counter terrorism.
Nitaqat Program of Saudi Arabia-The Nitaqat program was introduced in 2011 in order to increase the employment of Saudi nationals in the private sector.Saudi policy of ’Nitaqat’ have upset the large expatriate community of Indian working in the Kingdom.
What Should be the way forward for India Saudi Relations?
Greater Integration of economies-Some labour-intensive establishments from Saudi Arabia can be shifted to India which would reduce Kingdom’s expatriate population. This would also eliminate the need to bring Nitaqat Policies.
Increased Cooperation in Space-With India’s growing space prowess , space becomes an important domain of cooperation between the two countries.Newly established Saudi Space Agency can engage with ISRO.
Increase in defence cooperation- India Saudi Arabia can uplift cooperation in the maritime security domain to safeguard the global oil supply chain.
Expanding the areas of bilateral cooperation- India Saudi Arabia should expand the potential areas for next stage of bilateral cooperation in Indian infrastructure, agriculture, start-ups, skilling and IT.
Conclusion
In the fast-changing geopolitical profile of the Middle East ,India and Saudi Arabia both need each other to balance their relationships for a peaceful and stable West Asia where more than 8 million people of Indian origin reside and contribute for the betterment of the economy of the region.
Further Reading-The importance of Saudi Arabia for India-Indian Express
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