Indo-Saudi Strategic Partnership

In News

• The Indian External Affairs Minister concludes his first official visit to Saudi Arabia.
  • During the visit he reviewed all aspects of India-Saudi Arabia bilateral relations and discussed regional and global issues.

Key Points of the Meeting 

• Collaboration: 
  • India-Saudi Arabia holds the promise of shared growth, prosperity, stability, security and development.
• COVID:
  • Saudi Arabia was very helpful during the Covid-19 pandemic by providing supplies of oxygen.
• India-Saudi Arabia Strategic Partnership Council:

• First ministerial meeting of the Committee on Political, Security, Social and Cultural Cooperation (PSSC) was held. 
• India is the fourth country with which Saudi Arabia has formed such a strategic partnership, after the UK, France and China.
• It will open new avenues of partnership in strategic areas such as defence, counter-terrorism, energy security as well as renewable energy. 

• Multilateral Forums:
  • Both have agreed to work closely together in G20 and multilateral organisations.
• Gulf Cooperation Council (GCC):
  • MOU on the mechanism of consultations between India and the six-nation regional bloc was signed. 
  • India needs the Gulf countries, Saudi Arabia in particular, to invest in the country and power its economic recovery.
    • The GCC is a regional, intergovernmental, political, and economic union comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. 

India-Saudi Arabia Relations

• Cultural ties:
  • India and Saudi Arabia enjoy cordial and friendly relations reflecting the centuries-old economic and socio-cultural ties. 
• Trade:
  • Saudi Arabia is India’s fourth-largest trading partner. 
  • More than 18 per cent of India’s crude oil imports are sourced from Saudi Arabia.
  • Bilateral trade during FY22 was valued at $29.28 billion. India’s imports from Saudi Arabia were valued at $22.65 billion and exports to Saudi Arabia were worth $6.63 billion.
• Strategic Partner: 
  • Saudi Arabia has been a strategic partner of India since the signing of the Riyadh Declaration in 2010.
• Crude oil:
  • It is currently India’s second-largest supplier of crude oil – providing about 18 % of its energy needs. It also has a major role in India’s Strategic Petroleum Reserves (SPRs).
  • The largest supplier of crude oil to India is Iraq.
• LPG requirements:
  • 32% of the LPG requirements of India are met by Saudi Arabia. 
• Pilgrimage and culture:
  • Haj pilgrimage is another important component of bilateral relations.
  • Trade and cultural links between ancient India and Arabia dating back to the third millennium BC.
• Military exercise:
  • AL – Mohed AL – Hindi is the maiden bilateral naval exercise between India and Saudi Arabia.

• Indian Diaspora:
  • The 2.2-million-strong Indian community is the largest expatriate community in Saudi Arabia.

Need for Cooperation

• Afghan Peace Process:
  • Being a major regional player, Saudi Arabia’s position on the developments in Kabul assumes significance as several countries in the Gulf region, including Qatar and Iran, were playing a role in the Afghanistan development, even before the Taliban’s capture of power.
• Economic Reform:
  • Economic reform programs (Vision 2030) are underway in Saudi Arabia, for which it needs India’s economic as well as technological assistance.
  • Saudi Arabia plays an important role in India’s energy security while India is a vital partner in the Saudi Arabia’s food security.
  • In 2021-22, Saudi Arabia was the second largest source of hydrocarbon imports for India.
• Investments:
  • Saudi investment of around $100 billion is in the pipeline in areas ranging from energy, refining, petrochemicals and infrastructure to agriculture, minerals and mining.
  • India is among the fastest growing economies in the world. The size of its economy with a nominal GDP of US$3.5 trillion in 2022 makes it the fifth largest economy in the world. It is one of the largest consumers of hydrocarbons in the world and this makes India an attractive investment destination for the world.
• Countering Militias: 
  • Saudi Arabia appears to have limited experience in countering threats from groups like Houthi militias. This is an area where India’s expertise in fighting such threats could be imparted to the Saudi side, by enhancing joint military training programs.

Challenges

• The politics of the Middle East is complex and multidimensional so requires a collective and united effort.
• The Saudi Arabia-Turkey rivalry could create problems for India.
• Saudi Arabia-Iran Rivalry: India has close relations with both Saudi Arabia and Iran. 
  • However, India is yet to work out a way to balance its ties with Iran on the one hand and Saudi Arabia and the United States on the other. 

Way Forward

• India-Saudi Arabia defence cooperation has considerably picked up the pace.
  • The defence ties between the two countries are growing in the midst of rapidly changing developments in the Gulf region.
• It will enhance bilateral cooperation and security in the Indian Ocean Region.

Source: IE