The partnership India and Saudi Arabia is the need of the hour for both the countries. Discuss. (15 Marks)

Mentor’s Comments:
1. Brief on the state of relationship/ recent visits
2. What makes the relationship a necessity for both nations?
3. What are the mutual advantages of each of the two countries?
4. Brief the challenges and highlight the road ahead.
Answer:

PM Modi’s recent visit to Saudi Arabia was seen as a watershed moment in boosting defense and security cooperation. Apart from these two broad themes, it appeared that India and Saudi Arabia are trying to move beyond energy relationships.

Importance of India to Saudi Arabia:

  • Enhanced ties with India is important for Saudi Arabia as well. The kingdom is facing economic strain in the wake of persistently weak oil prices.
  • The U.S. is no longer as dependent on the region for energy as it used to be, thanks to the shale boom.
  • Demand from China is also receding in the wake of a slowdown. Besides, competition in the oil market is expected to tighten with a sanctions-free Iran entering the global economic mainstream without any bars.
  • In this context, India is a vital market for Saudi Arabia. There is believed to be friction between Islamabad and Riyadh over the former warming up to Tehran and their growing energy cooperation.
  • Pakistan also refused to join Saudi Arabia’s war coalition that has been bombing Yemen for the past year in the name of fighting the Iran-backed Shia rebels.

Importance of Saudi for India

  • It is currently India’s second-largest supplier of crude oil – providing about 18 % of its energy needs. It also has a major role in India’s Strategic Petroleum Reserves (SPRs).
  • It is India’s 4th largest trade partner. In 2018-19, the India-Saudi bilateral trade was the US $ 34.03 billion.
  • Expansion of trade and investment: Saudi has shown interest in expanding trade and investment in India and collaboration in the energy sector. India could likely absorb $100 billion in Saudi investment.
  • Ratnagiri refinery and petrochemicals complex joint venture: Saudi Aramco is set to partner with the Abu Dhabi National Oil Company in developing an integrated refinery and petrochemicals complex at Ratnagiri in Maharashtra, a $44 billion joint venture with Indian public sector involvement.
  • Largest supplier of oil: Saudi Arabia is already one of the three largest suppliers of oil to India.
  • Strategic Partnership Council: Both the countries have a strong independent strategic partnership and it will be further strengthened with the launching of the Strategic Partnership Council.
  • People-to-people relations: There were announcements of the release of 850 Indians from Saudi jails, a hike in the quota for Indians making the Haj pilgrimage and an annual upscaling of airline seats to and fro.
  • Comprehensive security dialogue and counter-terrorism: A comprehensive security dialogue between the national security advisers of the two nations has been announced, besides a joint working group on terrorism.
  • Inaugural joint naval exercises soon: Both agreed to hold their inaugural joint naval exercises at the earliest.

Challenges

  • Pakistan is far too important to Saudi Arabia for internal security reasons for Riyadh to sacrifice its stake in Islamabad in order to appease New Delhi. 
  • The Pakistan Army has more than once acted as the Saudi rulers’ praetorian guard and given the uncertain hold of MBS on his country, despite impressions to the contrary, he may need the services of Pakistani mercenaries in the near future.
  • Afghanistan has been a point of strategic convergence for Pakistan and Saudi Arabia going back to the 1980s when the Saudis used Pakistan as a conduit for material assistance to the Islamist forces fighting the Soviet Union and its proxy government in Kabul. 
  • With U.S. withdrawal from Afghanistan and the consequent expansion of Taliban influence very much on the cards, Pakistan’s strategic value as the Taliban’s patron has grown exponentially. 
  • Saudi Arabia is interested in curbing Iranian influence in Afghanistan and needs Pakistan to contain Tehran’s ability to influence events in that country after the American withdrawal through its Tajik and Hazara allies.
  • There have been reports that Saudi Arabia is planning to get its own nuclear deterrent. If that is the case, then Pakistan is the most logical source for technical expertise.

Way forward

Saudi Arabia is transforming and that the opportunities for partnership and growth are unlimited. Saudi Arabia is a G-20 economy that is opening up to foreign investors at an unprecedented rate.

Vision 2030 of Saudi Arabia has created a roadmap for social and economic transformation and enabling the private sector is at the heart of it.

The economic partnerships between Saudi Arabia and India are moving from strength to strength as our nations undergo significant periods of positive change in order to realize the ambitious goals of Saudi Vision 2030 and New India @75.

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