India - Saudi Arabia relations - Latest update

An update on the India Saudi relationship

 India - Saudi Arabia relations - Latest update

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Read more on - Polity | Economy | Schemes | S&T | Environment

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• The story: The Saudi Foreign Minister Prince Faisal Bin Farhan Al Saud made his first visit to India, in Sept 2021. He spoke of plans for investments in India, despite the delays in Saudi Arabia’s $100 billion pledge made in 2019, and offered Saudi Arabia’s “good offices” for any talks between India and Pakistan. For both countries, Afghanistan is a hot topic.
• India and KSA: Both nations regularly discuss bilateral cooperation in multilateral forums such as the United Nations, G-20 and Gulf Cooperation Council (GCC), but India is not a member of the GCC.
• Strategic Partnership Council Agreement (signed in 2019): India-Saudi Strategic Partnership Council was formed to coordinate on strategically important issues. The council will be headed by the Prime Minister and Crown Prince Mohammed and will meet every two years. India is the fourth country with which Saudi Arabia has formed such a strategic partnership, after the UK, France and China. Saudi Arabia has been a strategic partner of India since the signing of the Riyadh Declaration in 2010.
• Regional developments: Saudi Arabia, along with Pakistan and the UAE, were the key backers of the Taliban regime that ruled Kabul from 1996 till 2001 when they were ousted by US-led international troops. Post 2021, in the new dynamics, Saudi Arabia is carefully watching things play out.
• Strengthening partnership: India and Saudi Arabia discussed further steps to strengthen their partnership in trade, investment, energy, defence, security, culture, consular issues, health care, and human resources.

1. Crude oil - Saudi Arabia is currently India’s second-largest supplier of crude oil (Iraq has been India's top supplier). It is keen to play a role in the creation of Strategic Petroleum Reserves (SPRs) at Padur in Karnataka. A study is being conducted for the setting up of the world’s largest greenfield refinery at Raigarh in Maharashtra by Saudi Aramco, Adnoc of the United Arab Emirates and Indian public sector oil companies.
2. Bilateral trade - Saudi Arabia is India’s fourth largest trade partner (after China, USA and Japan). The bilateral trade was valued at US $33.07 billion during FY 2019-20. During the same period, India's imports from Saudi Arabia reached US $26.84 billion and exports to Saudi Arabia were worth US$ 6.24 billion registering an increase of 12.18% over last year.
3. Indians in KSA: The 2.6 million-strong Indian community in Saudi Arabia is the largest expatriate community in the Kingdom and is the ‘most preferred community’ due to their expertise, sense of discipline, law-abiding and peace-loving nature. The Hajj pilgrimage is another important component of bilateral relations between India and Saudi Arabia.
4. Naval exercise: India and Saudi Arabia started their first-ever Naval joint exercise called the Al-Mohed Al-Hindi Exercise.

• On Afghanistan: The key concern now is stability and ensuring it does not become a source of transnational terrorism. KSA feels that the leadership in Afghanistan (the Taliban) has the direct responsibility to exercise good judgment and good governance, to be inclusive, to bring in all people in Afghanistan, and to forge a path that can lead to stability, security and prosperity. KSA avoided contact with the Taliban for many years and that was a policy decision demanding complete renunciation of transnational terrorism.
• Summary: The trade balance between India and Saudi Arabia is highly in favour of Saudi Arabia, and India's exports are mainly restricted to the agricultural sector. There is a need for India to increase its product base to balance the trade in its favour. Potential areas for the next stage of bilateral cooperation could be infrastructure, energy, skilling and IT. India should convince Saudi Arabia to exercise its influence over Pakistan in controlling the Taliban in Afghanistan.
• EXAM QUESTIONS: (1) Explain the various dimensions of the India-Saudi relationship. (2) What was the role of KSA in the first regime of the Taliban in Afghanistan? What is the role now? Explain.

Read more on - Polity | Economy | Schemes | S&T | Environment

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