Recently, Mohammed bin Salman, the Crown Prince of Saudi Arabia, conducted a state visit to India, marking his first in the region. The state visit saw the signing of numerous MoUs, setting the foundation for deeper collaboration and cooperation. The agreements revolve around investments in the National Investment and Infrastructure Fund of India as well as a cooperative programme between Invest India and the Saudi Arabia General Investment Authority (SAGIA). Expansion of bilateral engagement was also reflected in additional MoUs concerning tourism, housing, and the exchange of audio-visual programmes.
These developments corroborate the decision of Saudi Arabia to join the International Solar Alliance (ISA), underpinning the evolving environmental stewardship of the nation. Notably, during the visit, Saudi Arabia decisively condemned the terrorist attack on Indian security forces in Pulwama that occurred on 14 February. Both countries mutually called for the early adoption of the UN Comprehensive Convention on International Terrorism (CCIT).
National Investment and Infrastructure Fund of India
The National Investment and Infrastructure Fund (NIIF) is the Indian government’s sovereign fund held in conjunction with global and domestic institutional players. The government maintains 49% ownership of the fund, which amounts to Rs. 40,000 crores. The fund has an investment mandate targeted at infrastructure assets and related businesses projected to exhibit a long term growth trajectory.
India-Saudi Arabia Relations
A strong strategic partnership has bonded India with Saudi Arabia since the signing of the Riyadh Declaration in 2010. India is among the eight strategic partners that Saudi Arabia seeks to further deepen ties within various areas, including politics, security, trade and investment, and culture.
Economic Relations
Saudi Arabia functions as the 4th largest trading partner of India with bilateral trade amounting to nearly US$ 28 billion during 2017-18. Moreover, India imports over 17% of crude oil and 32% of Liquefied Petroleum Gas (LPG) from Saudi Arabia, emphasizing the latter’s role in the energy security of India. A recent illustration of these close ties is the agreement by Saudi ARAMCO, in partnership with UAE, to invest US$ 44 billion in constructing the Ratnagiri Refinery and Petro-Chemical project Ltd.
Strategic Petroleum Reserves
Strategic petroleum reserves serve as massive stockpiles of crude oil to counter potential crises like supply disruption due to natural disasters or wars. India currently houses its strategic crude oil storages at Visakhapatnam (Andhra Pradesh), Mangaluru(Karnataka), and Padur (Karnataka). Recent reports indicate plans for two additional facilities at Chandikhol (Odisha) and Padur (Karnataka).
Diaspora Relations
An estimated 2.7 million Indians reside in Saudi Arabia and annually remit over US$ 11 billion. Notably, Saudi Arabia also enables over 175,000 Indians each year to participate in the Hajj pilgrimage, the most significant number of pilgrims originating from any one country.
Challenges in the India-Saudi relationship
The sustained prosperity of the India-Saudi relationship faces potential threats from Saudi Arabia’s ties with Pakistan and India’s relations with Iran. India anticipates Saudi Arabia to inhibit Pakistan from allowing its territory to be exploited by terrorists targeted at India. Furthermore, issues related to diaspora, such as the treatment of Indian workers in Saudi Arabia and the implications of Saudi Arabia’s Nitaqat Programme for Indian expatriates, pose challenges. Lastly, concerns arise over radicalization in India, with several agencies based in Saudi Arabia accused of propagating fundamentalist Wahhabi and Salafist ideologies, demonstrating Saudi Arabia’s role as a primary supporter of a more rigid interpretation of Islam.