Context:

Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud and Prime Minister Narendra Modi held bilateral talks recently (post G-20), agreeing to expand trade and security ties.

More On News:

• The two leaders co-chaired the first meeting of the India – Saudi Strategic Partnership Council (SPC).

• Signed eight agreements to boost cooperation in a range of areas — from energy to interconnectivity, digitalisation and electronic manufacturing to finance and security.
  • Both Leaders discussed ways to further unlock the potential of the India-Saudi Arabia Strategic Partnership.

The Importance of India- Saudi Arabia Relations:

• Strategic Partnership
  • Riyadh declaration signed in 2010, upgraded bilateral partnership to Strategic Partnership.
  • In following Years, partnership widened to include a broad range of areas including energy security, trade and investment, defence and security, food security, culture and community welfare issues among others.
• Energy Security: Energy cooperation forms a central pillar of the Indo-Saudi bilateral ties.

• • Saudi Arabia remained India’s third-largest Crude and Petroleum products supplier for Financial Year 2022-23. 
  • Signed an Agreement on Cooperation in the Energy Sector that covers renewable energy, energy efficiency, hydrogen electricity and investments in petroleum reserves.
  • Joint cooperation in the fields of electricity and grid interconnection, in addition to cooperating in the field of hydrogen and its derivatives.
• Economic Cooperation, Trade and Investment
  • India is the second largest trade partner of Saudi Arabia, while Saudi Arabia is the fourth largest trade partner of India. 
  • Bilateral trade has increased to more than US$ 52 billion in 2022-23, marking a growth of more than 23%.
  • Both sides agreed to explore investment opportunities in the field of fertilizers, petrochemicals, agricultural and food industries.
  • They also discussed the possibility of trade in local currencies and a joint task force for expedite implementation of the $50-billion ‘West Coast refinery project (Maharashtra).’Science and Technology:
  • Agreed to strengthen partnership in the areas related to communications and information technology, digital economy, innovation and space, remote sensing, satellite communication and satellite-based navigation.
• Climate Change: the two sides reaffirmed the importance of adhering to the principles of the UN Framework Convention on Climate Change and the Paris Agreement.
• Defence Cooperation- Counter Terrorism and Security:
  • A Joint Committee on Defence Cooperation that holds regular meetings.
  • A comprehensive security dialogue mechanism between the two countries focuses on security cooperation and collaboration in defence industries.
  • For  example: In December 2020, General MM Naravane,the Chief of Army Staff, made a historic visit to Saudi Arabia.
  • Strengthening cooperation in the field of defense and   anti-terror cooperation and made a special mention of preventing access to “missiles and drones” to carry out terror attacks.

Challenges in Bilateral Relation:

• Energy Security and Oil Prices
  • India is highly dependent on imports of crude oil and natural gas for its energy security.
  • High oil prices can have a significant impact on India’s economy.
  • Ensuring a continuous supply of oil is a constant concern.
• Geopolitical Alliances/Competition
  • The influence of external power in the region such as the United states, Russia and China can affect the dynamics of india-Saudi Arabia relations. 
  • Managing these alliances and their respective interests can be a challenging task.
• Instability and Regional conflicts in Middle East: 
  • Saudi Arabia is the third pole in regional politics (others are Iran and Israel).
  • Balancing diplomatic relations with other two poles can be challenging.
• Trade imbalance: while trade between two countries has been increasing, there is trade imbalance ( $31.3 billions-CMIE-2023).
• Human Rights and Cultural Differences: Both countries have different cultural and political system, differences can lead to concern and challenges
• Indian Diaspora and migrant workers
  • A large number of Indian diaspora work in the Middle-East (approx. 8 million). Ensuring their rights , welfare and security is an ongoing concern.
• Counter Terrorism And Security: both countries face threat from terrorism and extremism, ever-evolving nature of these threats pose ongoing challenges.
• Diaspora and Labour Issues: More than 2.4 million Indians work in Saudi Arabia, they face issues such as Nitaqat law.

Way Forward:

• Diversification in Economic Ties:
  • Need to diversify economic cooperation beyond the energy sector. 
  • Exploring opportunities in digital technology, renewable energy and healthcare. 
• Trade and Investment Promotion: 
  • Saudi Arabia’s Vision 2030 plan Offers Opportunities for Indian Business to invest will contribute to economic growth, innovation and job creation.
  • Identifies new areas  where India can increase its exports (such as Information Technology services, Pharmaceuticals and Agriculture products.)
• Energy Transition: 
  • Need to transform  buyer-seller relationship into a much broader strategic partnership based on mutual complementarity and interdependence and need to adapt to the changing global energy landscape. 
• Multilateral Cooperation: Coordinate efforts in international Forums and organizations to address global challenges, including climate change, health crisis and globalization.
• Strategic alignment: Explore new areas  of strategic alignment in regional and global matters, such as United Nations initiatives.
• Regional Conflicts, Counter terrorism and Security: 
  • Engage in constructive diplomacy to contribute to conflict resolution and stability in the region.  
  • A balanced approach, while respecting the principles of sovereignty and non-interference.
• Labour Rights and Indian diaspora: Ensure the welfare and rights of indian diaspora and workers.
• Cultural and educational Exchanges: fostering people to people connections through cultural exchange partnerships, it will promote a deeper understanding of each other’s culture and societies.

News Source: The Indian Express