Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud and Prime Minister Modi recently co-chaired the first-ever summit-level meeting of the India-Saudi Arabia Strategic Partnership Council (SPC). This significant event highlights the enduring ties between these two nations, rooted in centuries-old economic and socio-cultural connections. This article delves into the multifaceted aspects of the India-Saudi Arabia relationship, spanning trade, investment, energy, defense, and collaboration during the COVID-19 pandemic.
Historical Ties and Diplomatic Milestones
The relationship between India and Saudi Arabia traces its roots back to 1947 when diplomatic relations were established. Over the years, this bond has strengthened through high-level visits and significant agreements. Notably, the ‘Riyadh Declaration’ during the visit of then-Prime Minister Manmohan Singh in 2010 elevated bilateral ties to a ‘Strategic Partnership.’ Subsequently, during Crown Prince Salman’s visit to India in February 2019, Saudi Arabia pledged to invest approximately $100 billion in India, marking a pivotal moment in their economic collaboration. The Strategic Partnership Council (SPC) Agreement, signed during Prime Minister Modi’s visit to Riyadh in 2019, cemented their commitment to mutual growth.
Economic Collaboration: Trade and Investment
In the fiscal year 2022-23, bilateral trade between India and Saudi Arabia reached a historic high of $52.75 billion. India’s exports to Saudi Arabia surged to $10.7 billion, up from $8.8 billion in the previous year, making Saudi Arabia India’s second-largest trading partner and vice versa. Indian investments in Saudi Arabia have surpassed $2 billion, while Saudi Arabia ranks as the 18th largest investor in India with investments amounting to $3.14 billion as of March 2022. The ambitious investment pledge of $100 billion by Saudi Arabia showcases their mutual commitment to bolstering economic cooperation.
Energy Security: A Central Pillar
Energy cooperation holds a central position in the bilateral relationship. Saudi Arabia remains a crucial partner for India in ensuring energy security. In the fiscal year 2022-23, India imported 39.5 million metric tons of crude oil from Saudi Arabia, constituting 16.7% of its total crude imports. Additionally, Saudi Arabia supplied 11.2% of India’s total petroleum product imports in FY23, further emphasizing their energy partnership.
Strengthening Defense Ties
Defense collaboration has seen notable progress, exemplified by the visit of Indian Chief of Naval Staff, General Manoj Mukund Naravane, to Saudi Arabia in December 2020. Two editions of the bilateral naval exercise, “Al Mohed al Hindi,” have taken place, underlining their commitment to regional security. Both nations are actively engaged in cooperation within the defense industry and capacity building, showcasing the depth of their defense partnership.
Indian Community and Cultural Ties
The Indian community in Saudi Arabia, approximately 2.2 million strong, is the largest expatriate group in the Kingdom. They play a significant role in the country’s economic growth, constituting 7% of Saudi Arabia’s population. Collaborative efforts, such as integrating India’s e-Migrate system with Saudi Arabia’s e-Thawtheeq system, streamline migration processes for workers. The annual Hajj pilgrimage is another vital component of Indo-Saudi bilateral relations, with India’s Hajj quota being increased during Crown Prince Salman’s visit to New Delhi in February 2019.
Collaboration amidst the Pandemic
Both nations have shown solidarity during the COVID-19 pandemic. India provided 4.5 million COVISHIELD vaccines to Saudi Arabia in February and March 2021, aiding the Kingdom’s vaccination efforts. In return, Saudi Arabia extended support to India during the second wave, supplying critical COVID-relief material, including liquid oxygen.
The India-Saudi Arabia Strategic Partnership Council (SPC)
Established during Prime Minister Modi’s visit to Saudi Arabia in October 2019, the SPC serves as a high-level council to steer the bilateral relationship. Comprising two main pillars—Committee on Political, Security, Social, and Cultural Cooperation, and Committee on Economy and Investments—the SPC operates at various levels of engagement, from summit meetings between the Prime Minister and Crown Prince to joint working groups.
Key Outcomes and Future Prospects
The recent meeting witnessed both nations expediting the implementation of the $50-billion West Coast refinery project, a significant initiative that will further bolster their economic ties. They identified energy, defense, semiconductor, and space as areas for intensified cooperation. Moreover, areas such as security, education, technology, transportation, healthcare, tourism, and culture were highlighted as avenues for future collaboration. Eight pacts were signed to enhance cooperation, covering digitization and investment.
UPSC Mains Questions
- How has the India-Saudi Arabia relationship evolved from a historical perspective, and what pivotal moments have shaped its current status as a strategic partnership?
- Explore the significance of energy security in the bilateral ties between India and Saudi Arabia, with a focus on crude oil imports and petroleum product sourcing.
- Analyze the defense partnership between the two nations, considering joint naval exercises and engagement in the defense industry. How does it contribute to regional security?
- In what ways has the Indian expatriate community in Saudi Arabia played a crucial role in strengthening bilateral relations? Discuss specific initiatives that facilitate their contributions.
