India and Saudi Arabia

General Studies Paper -2

Context: India and Saudi Arabia have decided to set up a Joint Committee on Defence Cooperation to give a boost to the defence ties.

India-Saudi Arabia Relations:

• Establishment of diplomatic relations in 1947, and it was strengthened by the signing of Delhi Declaration in 2006 and elevated to a strategic partnership by signing of Riyadh Declaration in 2010.
• The Prime Minister of India’s visit to Riyadh in 2016 captured the spirit of enhanced cooperation in the political, economic, security, and defence realms.
  • King Salman conferred the King Abdulaziz Sash(the Kingdom’s highest civilian honour) to India’s Prime Minister, indicating the importance of Saudi Arabia-India relations.

Current Scenario:

• India’s relations with Saudi Arabia have witnessed unprecedented growth in recent years, marked by a remarkable rise in trade and other investments.
• Trade:India’s foreign trade with Saudi Arabia reached an all-time high of $52.75 billion in FY23.
  • India received $3.22billion in FDI from Saudi Arabia between April 2000 and June 2023.
  • India sources crude petroleum, petroleum products, fertilisers, raw plastic, organic and inorganic chemicals from Saudi Arabia.
• Energy Security:Saudi Arabia contributes to India’s energy security as India is highly dependent on imports for its energy needs, importing 87% of oil consumed, and the Middle East accounts for over 60% of India’s crude oil imports.
• Food Security:India complements Saudi countries in their food security as Saudi Arabia is largely import-dependent for its food needs and manufactured goods, including textiles.
• Strategic Partnership Council (SPC):India is the fourth country after the UK, France, and China to partner with Saudi Arabia to establish the India-Saudi Arabia Strategic Partnership Council (SPC) in 2019.
  • This aims to take forward mutual collaborations on the economy, investments, as well as social, political, and security matters.
• Defence Cooperation:India and Saudi Arabia have a Joint Committee on Defence Cooperation (JCDC) that meets regularly.
  • Indian Navy cooperates with Royal Saudi Naval Force through various initiatives, which include operational interactions such as bilateral naval exercise Al Mohed Al Hindi, training and other maritime avenues.
  • Indian Navy ships have been regularly undertaking port calls at various ports of Saudi Arabia.
  • Various Exercise:The Indian Navy has also been interacting with the Royal Saudi Naval Force in various multilateral fora – Ex Milan, Indian Ocean Naval Symposium, Combined Maritime Forces and Djibouti Code of Conduct – Jeddah Amendment (DCoC-JA).
• Regional Stability: Both countries agreed to work together for peace, security and stability of the region, as Iranian-backed Houthi militantsin Yemen stepped up attacks on vessels and disrupted maritime traffic in the Red Sea.
• Indian Ocean Naval Symposium (IONS):The navies of the two countries could explore practical cooperation in the fight against piracy and an active role of the Royal Saudi Navy in the IONS.

Challenges

• Energy Dependence:The core element of their relationship continues to revolve around energy, particularly Saudi Arabia’s export of crude oil.
  • India is highly dependent on imports for its energy needs, importing 87% of oil consumed, and the Middle East accounts for over 60% of India’s crude oil imports.
• Saudi Arabia’s Aid to Pakistan:While engaging with India, Saudi Arabia’s aid to Pakistan raises concerns.
• Economic Shifts, Political Transitions, and Geopolitical Dynamics:These factors have tested their relationship. However, the underlying respect, shared interests, and commitment to mutual growth have allowed their ties to remain resilient.
• Role of China:The country is also engaged with China, moving towards rapprochement with Iran and Israel, and is also now consolidating the Saudi partnership with the US, India, and Europe.
  • Many have thus already described this engagement as a power shift, with China emerging as a significant player in the Middle East.
  • Increasing Chinese influence in the Middle East may indirectly help Pakistan, both economically and strategically.

Conclusion and Way Forward

• Despite the challenges, both nations have recognized the importance of adapting their partnership to address modern challenges. They have established the India-Saudi Arabia Strategic Partnership Council (SPC)in 2019 to take forward mutual collaborations on the economy, investments, as well as social, political, and security matters.
• India needs to patiently assess if China’s growing involvement in the Gulf is detrimental to its long-term security interests and the regional balance of power.
  • The I2U2 partnership between India, Israel, the UAE, and the US has already put India on the region’s alliance canvas.
• At the same time, recent developments also provide a window of opportunity for India to embed itself as a significant player in the Middle East.