India – Saudi Arabia (Background and latest developments)

Table of Contents

Context

The expansion and institutionalisation of strategic cooperation between India and Saudi Arabia mark the consolidation of a partnership that has long struggled to realise its full potential.

For years, the Saudi Arabia-India relationship had always been shadowed by the Kingdom’s close ties with Pakistan.
That has changed, while Riyadh retains strong ties to Islamabad, there is no longer an “either-or” element, and the Kingdom has demonstrated geopolitical diversification in its relations with South Asia.
The rise of jihadist extremism, the gradual decline of American power, and the rise of China have brought about transformational changes in India’s engagements with the Gulf region.
It is the precise nature of the India-Saudi Arabia relationship?
The kingdom is India’s fourth largest trading partner, and India is the fourth largest market for Saudi exports.
Bilateral trade is in the region of $28 billion, most of it crude oil exports to India, which imports around 19% of its oil requirements from Saudi Arabia.
Prime Minister is in Saudi Arabia for business. But he should also be interested in the wide-ranging social and religious reform initiated by Crown Prince Mohammed bin Salman over the last few years.
Economic reforms
Beyond oil
Modernising society
Reaction to reforms

Balance – The Saudis sought to maintain a balance in their relations with India and Pakistan.
Religion and finances – Pakistan has demanded religious solidarity and unending financial support from Riyadh.
Hesitations of India – India was hesitant to adopt a bolder friendship towards Saudi Arabia amidst the obsession with the Pakistan question.

Enhanced ties with India is important for Saudi Arabia as well. The kingdom is facing economic strain in the wake of persistently weak oil prices.
The U.S. is no longer as dependent on the region for energy as it used to be, thanks to the shale boom.

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).
It is India’s 4th largest trade partner. In 2018-19, the India-Saudi bilateral trade was the US $ 34.03 billion.

Pakistan is important to Saudi.
With U.S. withdrawal from Afghanistan and the consequent expansion of Taliban influence very much on the cards, Pakistan’s strategic value as the Taliban’s patron has grown exponentially.
Saudi Arabia is transforming and that the opportunities for partnership and growth are unlimited. Saudi Arabia is a G-20 economy that is opening up to foreign investors at an unprecedented rate.
Vision 2030 of Saudi Arabia has created a roadmap for social and economic transformation and enabling the private sector is at the heart of it.
The economic partnerships between Saudi Arabia and India are moving from strength to strength as our nations undergo significant periods of positive change in order to realize the ambitious goals of Saudi Vision 2030 and New India @75.