Prime Minister Narendra Modi visited Saudi Arabia for a two-day visit at the invitation of Crown Prince Mohammed bin Salman.

• Rare High-Level Visits in the Past: Modi’s visit marks only the sixth time an Indian Prime Minister has been to Saudi Arabia since 1947.
• Chronology of Past Prime Ministerial Visits: 
  • Jawaharlal Nehru: First Indian PM to visit Saudi Arabia in 1955.
  • Indira Gandhi: Visited 27 years later in 1982.
  • Manmohan Singh: Made his visit in 2010, marking a 28-year gap since the previous one.
• Importance of Saudi Arabia in India’s foreign policy: Prime Minister Modi’s visit marks his third trip to Saudi Arabia, following earlier visits in 2016 and 2019.

Key Outcomes Of the Visit

• Strategic Partnership Strengthened: The second meeting of the India-Saudi Arabia Strategic Partnership Council (SPC) was co-chaired by India and Saudi Arabia in Jeddah.
  • The first Summit meeting of the Strategic Partnership Council took place on September 11, 2023.
• Expansion of Strategic Partnership Council: The two leaders welcomed the expansion of the Strategic Partnership Council with the establishment of two new ministerial committees.
  • The four committees under the India-Saudi Arabia SPC shall now be as follows: 
    • Political, Consular and Security Cooperation Committee, 
    • Defence Cooperation Committee, 
    • Economy, Energy, Investment and Technology Committee and 
    • Tourism and Cultural Cooperation Committee.
• High Level Task Force on Investment (HLTF): Building on the commitment of Saudi Arabia to invest USD 100 billion in India across key sectors both countries agreed to accelerate investment flows through collaboration on two refineries and made significant progress in areas like taxation
• Memorandum of Understanding (MoU) Signed: 
• • MoU between Department of Space, India, and Saudi Space Agency in the field of space activities for peaceful purposes.
  • MoU between Ministry of Health and Family Welfare, Republic of India and Ministry of Health, Kingdom of Saudi Arabia & on Cooperation in the Field of Health.
  • Bilateral Agreement between Department of Posts, India and Saudi Post Corporation (SPL) for inward foreign surface parcels.
  • MOU between National Anti-Doping Agency of India (NADA), India, and Saudi Arabia Anti-Doping Committee (SAADC) for cooperation in the field of anti-doping and prevention.

Background of India-Saudi Arabia Relations

• Post-Independence (1947-2000): Diplomatic relations were established in 1947, but ties remained largely transactional, centered on oil imports and labor migration.
  • Cold War Phase: Saudi Arabia aligned with the US; India followed Non-Alignment.
  • Despite shared civilisational links, India’s past approach was marked by hesitancy and Pakistan-centric perspectives.
• Normalisation of Relations (2006)
  • First visit by a Saudi monarch (King Abdullah) historic visit to India in 2006 (first in 51 years).
• De-hyphenation of ties: India gradually “de-hyphenated” its ties with Saudi Arabia from its Pakistan concerns.
• 21st Century Transformation: The relationship expanded under India’s “Look West” policy and Saudi Arabia’s Vision 2030, elevating ties to a strategic partnership.

Significance of India–Saudi Arabia And Their Strategic Partnerships

• Trade and Investment: Saudi Arabia ranks as India’s fifth-largest trading partner, while India holds the position of Saudi Arabia’s second-largest trading partner.
  • In the financial year 2023-24, India’s imports from Saudi Arabia amounted to USD 31.42 billion, and exports stood at USD 11.56 billion.
  • As of August 2023, Indian investments in Saudi Arabia have reached approximately USD 3 billion. Whereas Saudi Arabia has invested around USD 10 billion in India through its Public Investment Fund (PIF) and other Saudi-backed entities.
• Energy Partnership: Saudi Arabia is the third-largest source of crude oil and petroleum for India.
  • According to the Ministry of External Affairs, India imported 33.35 million metric tonnes (MMT) of crude oil from Saudi Arabia in FY 2023–24. 
  • Additionally, Saudi was the third-largest supplier of liquefied petroleum gas (LPG), accounting for 18.2% of India’s total LPG imports during the same period.
• Defence Ties: The two nations held their first joint land forces exercise, ‘Ex-Sada Tanseeq-I’, in 2024.
  • In February 2024 , an MoU was signed between Munitions India Limited and a local Saudi partner, facilitating the supply of artillery ammunition worth USD 225 million, highlighting the growing cooperation in defence production and exports.
• Hajj Quota: India has a large Muslim population, and Saudi Arabia plays a key role in facilitating the Hajj pilgrimage.
  • India’s Haj quota for 2025 has risen to 175,025 from 136,020 in 2014, with arrangements for 122,518 pilgrims finalised.
• Indian Diaspora: There are around 2.7 million Indians living and working in Saudi Arabia, making them the largest expatriate community in the Kingdom.
• Maritime Security Cooperation: India and Saudi Arabia work together to secure sea lanes and counter piracy in the Gulf of Aden.
  • Example: Bilateral naval exercises like Al Mohed al Hindi focus on protecting the strategic Strait of Hormuz.
• Strategic Regional Influence: Saudi Arabia plays a vital role in Middle East politics, especially in the Israeli-Palestinian peace process.
• Countering Chinese Influence: India sees engaging with Saudi Arabia as essential to balance China’s growing geopolitical presence in West Asia.
• Influence Over Pakistan: Saudi Arabia’s sway over Pakistan can be leveraged by India to advance anti-terrorism dialogue.

Challenges In India and Saudi Arabia Relations

• Trade Imbalance: Despite strong economic ties, India runs a significant trade deficit with Saudi Arabia, mainly due to crude oil imports.
  • Non-oil trade remains underdeveloped, despite potential in IT, pharmaceuticals, and agriculture.
• Geopolitical Challenges: 
  • Balancing Iran and Saudi Arabia: India cannot abandon Iran (due to Chabahar and Central Asia access). But also cannot afford to alienate Saudi Arabia (oil, investments, diaspora remittances).
  • China’s Growing Influence in Saudi Arabia: Saudi Arabia’s participation in Belt and Road Initiative (BRI) enhances China’s footprint in the region, directly competing with India’s IMEC (India-Middle East-Europe Corridor) vision. 
    • Saudi Arabia is increasingly purchasing Chinese drones (e.g., Wing Loong)
  • Saudi Arabia’s Ties with Pakistan: Saudi Arabia has long been an ally of Pakistan, providing financial aid, oil subsidies, and defense support. This complicates India’s efforts to isolate Pakistan on issues like terrorism (e.g., Jaish-e-Mohammed, Lashkar-e-Taiba).
• Labour Concerns: 
  • Saudization/Nitaqat Policies: Saudi Arabia’s push to prioritize local employment through the Nitaqat program has reduced job opportunities for Indian expatriates.
    • Saudization/Nitaqat policies require companies and enterprises to fill their workforce with Saudi nationals up to certain levels.
  • Kafala System Reforms: While Saudi Arabia has eased some restrictions, Indian laborers still face exploitative working conditions, wage delays, and limited legal recourse.
• Energy Security Concerns:
  • Vulnerability to Oil Price Shocks: India imports around 18% of its crude from Saudi Arabia, making it susceptible to OPEC+ production cuts and price fluctuations.
    • OPEC+ refers to the alliance of the Organization of the Petroleum Exporting Countries (OPEC) and 10 other major oil-producing nations, including Saudi Arabia.

Way Forward

• Trade and Economic Diversification:
  • Strategic Petroleum Reserves (SPRs): Expand India’s crude storage facilities with Saudi investment to buffer against price shocks.
  • The Indian government as well as refiners are in active discussions with new source markets like Guyana for oil purchases.
• Rupee-Riyal Trade: There should be comprehensive discussions for bilateral trade to be carried  in local currencies to reduce dollar dependency.
• Skill Development Partnerships: India can organise training workshops for Indian workers for Saudi’s post-oil economy in fields such as AI, healthcare, construction technology etc.
• Accelerate IMEC: India needs to accelerate the infrastructure needed for the completion of  the India-Middle East-Europe Corridor (IMEC) as an alternative to China’s BRI.
• Maintain Strategic Autonomy: India should balance Iran ties while deepening GCC engagement.
• Strengthening Space Cooperation: The Saudi Space Agency can explore strategic collaboration with Indian Space Research Organisation (ISRO) in areas like satellite technology, space research, and capacity building, strengthening bilateral cooperation in science and technology.

Conclusion

India-Saudi Arabia ties are no longer just about oil. It’s about shaping the future of geopolitics, energy transition, and economic resilience.

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