Saudi Arabia is a gulf country endowed with huge reserves of oil.
It is the largest exporter of oil in the world, so it is but natural for all the nations in the world to develop a strong coherent relationship with this country. India is also in the race to establish strategic relations with Saudi Arabia. Indo-Saudi relations are the bilateral connection between the Republic of India and the Kingdom of Saudi Arabia. Relations between the two countries are commonly strong and close, particularly in business interests. Trade relations between Saudi Arabia and India go way back in the history. Formal diplomatic relations between contemporary India and Saudi Arabia were established soon after India gained independence in 1947. Since the starting each Prime Minister of India has attempted to set up and proceed with great relations with Saudi Arabia. The relations between the two countries became bitter when Saudi Arabia supported Pakistan’s stance on the Kashmir conflict and during the Indo-Pakistani War of 1971, at the expense of its relations with India. The Soviet Union’s close relations with India also negatively affected Indo-Saudi relations. During the Persian Gulf War (1990–91), India officially maintained neutrality. Saudi Arabia’s close military and strategic ties with Pakistan have also been a source of continuing strain.
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But both the nations didn’t allow these exasperating circumstances to hinder their historical and valuable relations and circumvented through it. So, the troubling conditions were not able to become a stigma and the relations improved for the better. Saudi Arabia has supported granting observer status to India in the Organization of Islamic Cooperation (OIC) and has expanded its collaboration with India to fight Islamic terrorism in the Middle East. This year Saudi Arabia has increased the Hajj quota of India, making it the 2nd highest country in the number of Pilgrims. Thus, the number of Indian pilgrims jumped to 200,000 per year in 2019.
Since the 1990s, India’s economic liberalization has helped bolster trade with Saudi Arabia. Both the countries come under the category of developing countries and they acknowledge the fact that a flourishing bilateral trade will help both the nations to ameliorate the economy. Prime Minister Narendra Modi has so far visited Saudi Arabia two times in three years. During his recent visit, a keynote was delivered at the high-profile Future Investment Initiative Summit, dubbed “Davos in the desert,” an initiative of Saudi Crown Prince Mohammed bin Salman. A substantive shift is happening in India’s approach to the Middle East policy and this visit further reinforced those trends. PM Modi has always been of the mindset of having an aggressive strategy of partnering with key regional powers like Saudi Arabia, the United Arab Emirates and Israel in a bid to attract investments and forge deeper security partnerships. India is likely to overtake China as the top driver of growth in oil demand by 2024. During his trip to New Delhi in February, Saudi Crown Prince Mohammed bin Salman said he saw over $100 billion worth of investment opportunities in India over the next two years. India has also shored up its energy investments in the region. Saudi Arabia has also promised to share more intelligence to boost counterterrorism cooperation with India. Modi’s visit to Saudi Arabia took place when such monumental changes have taken place in the country. The abrogation of the article 370 by India could have put a fatal blow to its relationship with the kingdom but unlike Turkey and Malaysia, Saudi Arabia has taken a positive approach towards India and has cautioned Pakistan against escalating the crisis. This is a welcome move when there is a history of strong relationship between Pakistan and Saudi Arabia. Pragmatism is directing Saudi’s stance as the exceptionally eventual fate of the kingdom’s monetary model is in question. It needs new accomplices like India. Reliance Industries’ decision to sell a 20% stake in its oil-to-chemicals business to Saudi Aramco at an enterprise value of $75 billion made it one of the biggest foreign direct investment deals in the country. India’s trade ties with Saudi Arabia have been growing and the relationship is no longer merely a buyer-seller one, though energy remains the driver of the engagement.
Saudi Arabia is India’s second biggest supplier of oil after Iraq. It is also now India’s fourth largest trading partner with bilateral trade at $27.48 billion in 2017-18 and Saudi investment of around $100 billion is in the pipeline in areas ranging from energy, refining, petrochemicals and infrastructure to agriculture, minerals and mining. This is a partnership which is becoming truly strategic as Modi himself underlined in his remarks in Riyadh. Two pacts have been signed during Modi’s visit: First is a preliminary agreement between Indian Strategic Petroleum Reserves Ltd and Saudi Aramco that will result in a greater Saudi role in setting up a second fuel reserve facility in Karnataka and Second is the Indian Oil’s West Asia unit and Saudi Arabia’s Al Jeri company for downstream sector cooperation. Modi also announced the formation of the India-Saudi Strategic Partnership Council that will be led by the leaderships of both the countries to “help India address its expectations and aspirations.” And to coordinate decisions regarding strategically important issues. The two leaders condemned terrorism and agreed to step up bilateral security cooperation. They also discussed cooperation in agriculture, oil and gas, maritime security, innovative technology, renewable energy, trade and investment between the two countries during their talks. An agreement was assigned on bringing coordination between e-migration systems of the two countries. An MoU was also signed to roll out RuPay card in the Kingdom making Saudi Arabia the third country in the Persian Gulf after the UAE and Bahrain to introduce India’s digital payment system. The two sides have vowed to further enhance defence industries collaboration and security cooperation. The first naval exercise between the two nations will take place by the end of this year or early next year.