India Saudi Arabia Strategic relation: Bilateral collaboration and Beyond

12 Sep 2023

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).
India-Saudi Arabia Strategic Partnership Council (SCP)

  • The SCP was set up in 2019, making India the fourth country with which Riyadh formed such a partnership, after the UK, France, and China.
  • It aimed to “establish a high-level council to steer the Indo-Saudi relationship”.
  • The SPC has two main pillars: Committee on Political, Security, Social and Cultural Cooperation; and Committee on Economy and Investments.
  • Both sub-committees have four functional levels of engagements: Summit level (Prime Minister & Crown Prince); Ministerial-level; Senior Officials’ Meetings; and Joint Working Groups (JWGs).
  • 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.
MoUs were signed in various fields:

  • Energy, Digitization and Electronic manufacturing, corruption, archival cooperation, enhancing cooperation in Bilateral Investment, banking, Seawater Desalination
    • 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-billionWest 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

 

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