India Saudi Arabia Relations
Context:
- The past ten years have seen a true upsurge in India’s international relations with the Middle East, especially with the Kingdom of Saudi Arabia.
SAARC-India bilateral relationship:
- The two nations’ trade reached $52.75 billion in the 2022–2023 fiscal year. Saudi Arabia was India’s biggest supplier of crude imports for almost ten years ($29 billion in the 2022-23) until Russia overtook it in the most recent fiscal year.
- Both skilled and unskilled expats from India are well-represented in Saudi Arabia’s expatriate community, and the country has been allocated a quota of 175,000 pilgrims for the yearly Hajj.
Saudi Arabia guarantees India’s energy security:
- Needless to say, energy, particularly Saudi Arabia’s export of crude oil, remains the central theme of Indo-Saudi relations.
- India has been dependent on Saudi Arabia for its oil exports since the 1960s. However, due to the superior refinery capacity of Indian refineries, India used to purchase a larger amount of its lighter crude from the countries bordering the Persian Gulf (Iraq and Iran) than from the Arab Gulf states.
- Only when Iraq’s shipments began to decline in the 1990s and after the United States, the European Union, and their allies put sanctions on Iran in 2010, did India start to progressively increase her imports of Saudi crude oil.
- By making an investment to adapt refinery technology at Jamnagar to the crude of the southern side of the Gulf, Riyadh took advantage of this opportunity.
- MBS reaffirmed its commitment to this approach in 2019 when it pledged to spend $50 billion in a petrochemical facility and another refinery on the Maharashtra coast, both of which would be in partnership with Abu Dhabi National Oil Company of the United Arab Emirates and have a projected capacity of 1.2 million barrels per day.
- MBS has reaffirmed Saudi Arabia’s commitment to invest an additional $50 billion and establish an office for the Saudi Sovereign Wealth Fund in Gujarat International Fin Tech-City, in addition to the energy and petrochemical sectors.
New heights in the relationship between Saudi Arabia and India:
- This growing camaraderie would have been highlighted even if the proposed grand IMEC (India-Middle East-European Corridor) had not only rivalled China’s Belt-Road-Initiative but also created a port-railroad connectivity to link India, the Gulf countries, and the European Union (of which Saudi Arabia and India are to be two nodal countries).
- As a result of their potential partnership, the two nations will probably become more integrated into the global supply chain than they have been since the Portuguese discovered the sea route to India in the fifteenth century.
- Furthermore, India’s backing for Saudi Arabia’s admission as a permanent member of BRICS appears to be exactly the kind of paradigm shift that Saudi Arabia needs in order to realise MBS’s 2030 vision for a post-oil economy in Saudi Arabia.
- Following the G20 conference, eight significant Memorandums of Understanding were concluded during the bilateral meeting between Saudi Arabia and India.
- (Comprising desalination technology, financial regulation, and exim banks)
- and numerous other ancillary comprehensions (from information technology, petrochemicals, medicines, new “clean” energy technologies, industry, and defence).
Way Forward:
- India would receive foreign capital from Saudi Arabia that might not be as prone to rash decisions as capital from the West has frequently been. India’s energy security will also be a major topic of discussion. Thus, over the medium term, the reciprocity of advantages is likely to ensure the persistence of the bonhomie.
