India-Saudi Arabia Relation

Recently, after the launch of the India-Middle East-Europe Economic Corridor the Prime Minister(PM) of India welcomed the Crown Prince of Saudi Arabia on a state visit.During this significant visit, the two nations discussed various aspects of their strategic partnership and agreed to set up a joint task force to expedite the West Coast refinery project.

Outcomes and Agreements Resulting From the Visit?

• Strategic Partnership Acknowledgment:
  • The PM of India highlighted Saudi Arabia's pivotal role as "one of the most important strategic partners of India."
  • Both leaders emphasized the importance of their partnership, particularly as two rapidly growing nations contributing to regional stability.
• India-Saudi Strategic Partnership Council (SPC):
  • The PM of India and the Crown Prince of Saudi Arabia co-chaired the inaugural meeting of the India-Saudi Strategic Partnership Council (SPC).
  • Discussions covered a wide range of areas, including defence, energy, security, education, technology, transportation, healthcare, tourism, culture, space, and semiconductors.This reflects the comprehensive nature of the economic cooperation between India and Saudi Arabia.
• West Coast Refinery Project Acceleration:
  • This trilateral project, involving ARAMCO(oil company of Saudi Arabia), ADNOC(oil company of the United Arab Emirates) and Indian Companies, is set to receive a USD 50 billion investment.
  • A joint task force was established to expedite the West Coast refinery project.
  • The task force will work on channeling the promised USD 100 billion investment from Saudi Arabia for this project.
  • The West Coast refinery project is India's first and largest greenfield refinery.
    • The project is located in Ratnagiri, Maharashtra and is expected to have a production capacity of 60 million tonnes per annum. When completed, it will be one of the world's largest refineries.
    • The project encompasses various critical facilities, including marine storage and port infrastructure, crude oil terminals, storage and blending plants, desalination plants, utilities, and more.
• Bilateral Agreements and Cooperation:
  • Eight agreements were signed during the visit, strengthening cooperation across various sectors.Notable agreements include collaboration between the Central Vigilance Commission of India and the Saudi Oversight and Anti-Corruption Authority, as well as cooperation in technology, education, and agriculture.
  • An agreement was signed between the National Institute of Technology of India and the Saline Water Conversion Corporation of Saudi Arabia.
• Assurance of Crude Oil Supply:
  • Saudi Arabia affirmed its commitment to being a "reliable partner and exporter of crude oil supplies" to India, ensuring energy security.
• Defence and Anti-Terror Cooperation:
  • Both nations pledged to enhance cooperation in defence and anti-terrorism efforts.
    • A special emphasis was placed on preventing access to "missiles and drones" for terrorist activities.
    • Plans were discussed to strengthen the tourism segment of bilateral relations, aligning with Saudi Arabia's ongoing reforms.
• Geopolitical Significance:
  • The visit holds geopolitical significance as it occurred after Saudi Arabia ended hostilities with Iran through a deal negotiated by China.
  • Saudi Arabia's recent membership in the BRICS (Brazil, Russia, India, China, and South Africa) further underscores its global engagement.

India-Saudi Strategic Partnership Council (SPC)?

The SPC is a high-level mechanism established between India and Saudi Arabia in 2019, to guide and enhance their bilateral relationship.

• • It consists of two sub-committees, addressing various aspects of cooperation:
    • Committee on Political, Security, Social, and Cultural Cooperation.
    • Committee on Economy and Investments.
  • India is the fourth country with which Saudi Arabia has formed such a strategic partnership, after the UK, France and China.

Operation:

The SPC operates at four functional levels:

• • • Summit level, involving the Prime Minister and Crown Prince.
    • Ministerial-level engagements.
    • Senior Officials Meetings.
    • Joint Working Groups (JWGs) to facilitate detailed discussions and action plans.

Key Functions:

• • The SPC serves as a comprehensive platform to foster collaboration across a wide range of sectors.
  • It facilitates in-depth discussions, policy formulation, and coordination at various levels to implement joint initiatives effectively.
  • JWGs under each committee focus on specific areas of cooperation, ensuring a well-structured approach to bilateral relations.

What are the pillars of India- Saudi Arabia relationship?

• Historical ties - The two countries established diplomatic relations in 1947 and 2021-22 marked 75 years of establishment of diplomatic relations.
• Delhi Declaration in 2006 was a watershed moment in India – Saudi Arabia relationship.
• Riyadh Declaration in 2010 elevated bilateral ties to a strategic partnership.
• Diplomatic relationship - Saudi Arabia’s highest civilian honour, the King Abdulaziz Sash was awarded to Indian PM Narendra Modi.
• The visit of Crown Prince to India in February 2019 allowed investment of approximately 100 billion dollars in India and enabled the kingdom to join in International Solar Alliance (ISA).

The International Solar Alliance (ISA) was a joint effort by India and France to mobilize efforts against climate change through deployment of solar energy solutions. It is guided by its ‘Towards 1000’ strategy.

• Strategic Partnership Council (SPC) Agreement, signed in 2019 established a high-level council to steer the Indo-Saudi relationship.
• Economic Ties – India is Saudi Arabia’s 2^nd largest trade partner and Saudi Arabia is India’s 4^th largest trade partner.
• As of January 2022, there were 2,783 Indian companies registered as joint ventures/ 100% owned entities with investments worth approximately $2 billion in the kingdom.
• Among the major proposed investments is the $44 billion West Coast Refinery & Petrochemicals Project in Maharashtra, which is being jointly built by Saudi Aramco and an Indian consortium.
• Energy cooperation – Saudi Arabia is a key partner for ensuring India’s energy security.
• Saudi Arabia was India’s 3^rd largest crude and petroleum products source for FY23.
• India also imports LPG from Saudi Arabia.
• Defence Partnership - Two editions of the bilateral naval exercise, Al Mohed al Hindi, have been concluded so far.
• Diaspora – The Indian community is more than 2.4 million and is the largest expatriate community in the Kingdom.
• India’s e-Migrate system integrated with the Kingdom’s e-Thawtheeq system to streamline the migration process for workers.
• Saudi Arabia supported in evacuation of Indian nationals stranded in Sudan through Jeddah under Operation Kaveri.
• Cultural Relationship – Indian Cultural Week was organized in Riyadh in collaboration with the Saudi Ministry of Culture in 2012.
• India participated as the ‘Guest of Honour’ at the prestigious Saudi National Festival of Heritage and Culture – Janadriyah in 2018.
• Counter terrorism – Both nations stressed the importance of combating terrorism and it’s financing.
• They emphasized that terrorism, in all its forms, remains one of the gravest threats to humanity.

What about the recent developments?

The two sides signed 8 agreements aftermath of G20 Summit in 2023.

• Diplomatic Ties – 1^st meeting of the India-Saudi Arabia Strategic Partnership Council.
• Energy Ties – Both agreed upon upgrading their hydrocarbon energy partnership to a comprehensive energy partnership for renewable, petroleum and strategic reserves.
• Investment promotion – Both agreed to create a joint task force for $100 billion in Saudi investment.
• Currency convertibility – Discussion for possibility of trading in local currencies.
• Trade agreements – Both were expediting negotiations for a free trade agreement between India and the Gulf Cooperation Council (GCC)of which Saudi Arabia is a member.

GCC is a regional political and economic alliance of 6 countries in the Gulf region - Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.

• Economic corridors – India, Saudi Arabia, UAE and USA jointly announced the India-Middle East-Europe Economic Corridor (IMEC).

IMEC is a massive infrastructure project that would connect India to Europe via West Asia, and could rival China’s Belt and Road Initiative.

• Global peace and stability – Both nations stressed the importance of achieving security and stability in Afghanistan.
• Cooperation Agreements – Cooperation between
  • India’s Central Vigilance Commission and Saudi’s anti-corruption unit,
  • Investment entities, small and medium enterprises banks,
  • National Archives of the two countries, and on
  • Desalination and renewable energy

What are the concerns?

• The political scenario of the West Asia or Middle East are complex and multidimensional.

Example: Saudi Arabia is rival with Iran and Turkey.

• India has close ties with both Saudi Arabia and Iran and thereby straining the relationship at times.
• Increased engagement of kingdom with China as it is their biggest trading partner.
• Riyadh still helps Pakistan with economic aid.

What lies ahead?

• India should frame a dedicated policy for west Asia on similar lines of Act East Policy.
• Saudi Arabia is consolidating its partnership with the US, India, and Europe which need be encouraged.
• India should use every opportunity to engage with Saudi Arabia for energy security and for maintaining peace in the neighbourhood.