Saudi Arabia One Of India's Most Important Strategic Partners: PM Modi

Relevance: GS2 - Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

(Source: The Hindu, 09/12/2023)

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Why in the news?

• This article discusses India's growing strategic ties with Saudi Arabia amid the recent visit of Crown Prince Mohammed Bin Salman.
• Recently, Prime Minister Narendra Modi launched the India-Middle East-Europe Economic Corridor at the G-20 Summit in New Delhi.

Highlights of the visit of the Crown Prince

• Joint task force: Indian Prime Minister Narendra Modi and Crown Prince of Saudi Arabia Mohammad Bin Salman agreed to set up a joint task force to speed up the implementation of the West Coast refinery project.
• It is a trilateral project between ARAMCO, ADNOC, and Indian companies for which $50 billion has been already budgeted.
• The joint task force will help identify and channel the $100 billion investment that was promised by Saudi Arabia, of which $50 billion was for the refinery.
• A monitoring committee will also be set up to ensure the refinery project remains on the fast track.
• India-Saudi Strategic Partnership Council (SPC): Prime Minister Modi and the Crown Prince co-chaired the first meeting of the India-Saudi Strategic Partnership Council.
• The SPC was set up in 2019, making India the fourth country after the UK, France, and China to have an SPC with Saudi Arabia.
• It has two main pillars - the Political, Security, Social and Cultural Committee and the Committee on Economy and Investments.
• India-GCC Free Trade Agreement (FTA): The two sides agreed to work on the Free Trade Agreement between India and the Gulf Cooperation Council countries.
• The GCC is India’s largest trading bloc.
• India-Middle East-Europe Economic Corridor: The Corridor project, which was unveiled at the G-20 Summit, aims to establish connectivity across India, West Asia, and Europe by leveraging railway and shipping routes.
• Members: India, the U.S.A., Saudi Arabia, the U.A.E., France, Germany, Italy, and the EU.
• Energy partnership: India and Saudi Arabia agreed to upgrade their relationship in the energy sector to a comprehensive energy partnership.
• In 2019, Saudi Arabia pledged to invest $100 billion into the energy project.
• Agreements: The two sides sealed 8 different agreements including
  • An agreement between the Central Vigilance Commission of India and the Saudi Oversight and Anti-Corruption Authority
  • An agreement between the Saudi and Indian Exim Banks.
  • An agreement between the National Institute of Technology of India and the Saline Water Conversion Corporation of Saudi Arabia
  • An agreement between the National Archives of India and the King Abdulaziz Foundation of Saudi Arabia for greater collaboration in archival research.
• Joint statement:
  • Saudi Arabia assured India that it would be a reliable partner and exporter of crude oil supplies.
  • Both delegations welcomed the expansion of the private sector and investment partnerships in the agricultural and food industries.
  • Strengthened cooperation in defense and anti-terror sectors and committed to preventing access to missiles and drones to carry out terror attacks.
  • The two sides recognized the reforms in Saudi Arabia and discussed plans to strengthen bilateral tourism.
  • Yemen: Saudi Arabia expressed its gratitude to India for its humanitarian assistance to the war-affected people of Yemen.
  • Afghanistan: The two countries reiterated the need for a government in Afghanistan that will represent all spectrums of the Afghan people.

India-Saudi Arabia relations

• Diplomatic relations between the two countries were established in 1947.
• In 2006, the Delhi Declaration was signed during the visit of King Abdullah to India.
• Economic:
  • Saudi Arabia is India’s fourth-largest trade partner with bilateral trade valued at $52.75 billion in 2022-23
  • Indian imports from Saudi Arabia were worth $34.01 billion and exports to Saudi Arabia were worth $8.76 billion in FY21-22.
  • Saudi Arabia accounted for 4.14% of India’s total trade in FY 2021-22.
• Energy:
  • Saudi Arabia is the third largest supplier of oil after Russia and Iraq.
  • In the 2023-24 period, India has imported around 600,000 barrels of oil per day.
• Military exercises:
  • In 2021, India and Saudi Arabia initiated the first naval exercise between the two countries, Al-Mohed Al-Hindi Exercise.
• People-People ties:
  • Indians make up the largest diaspora in Saudi Arabia.
  • Another component of the people-to-people ties between the two countries is the Haj pilgrimage.

India-Middle East- Europe Corridor The India-Middle East-Europe Economic Corridor (IMEC) aims to establish connectivity across India, West Asia, and Europe, leveraging railway networks and shipping routes. Members: India, the U.S.A., Saudi Arabia, the U.A.E., France, Germany, Italy, and the EU. It is part of the Partnership for Global Infrastructure Investment (PGII), a G-7-developed alternative to China’s Belt and Road Initiative. It consists of two corridors: East Corridor: India to the Arabian Gulf West Corridor: Arabian Gulf to Europe Significance The Corridor project has been hailed as a sustainable alternative to existing global connectivity initiatives. It could help bypass the congested Suez Canal and offer a more efficient route for cargo ships thereby enhancing connectivity, logistics, clean energy production, and economic cooperation. The Corridor could be expanded in the future to include energy pipelines and optical fiber links to satisfy India’s energy and digital requirements. The Corridor is a reflection of emerging geopolitical trends such as India-US collaboration in the Middle East, counteracting Pakistan’s veto, and relations with Iran. It will help improve India’s strategic ties with the Arabian Peninsula, especially members such as the United Arab Emirates and Saudi Arabia, and reestablish India’s role as the connector between Arabia and Europe. It will foster intra-regional connectivity and contribute to the idea of Infrastructure for peace. It will also help improve India’s relations with the European Union, which is a major stakeholder in the project. It will also permit India to participate in the Trans-African Corridor proposed by the US and the EU.

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FAQs

MCQs

Question: In which one of the following groups are all four countries members of G20? (UPSC CSE 2020)

(a) Argentina, Mexico, South Africa and Turkey

(b) Australia, Canada, Malaysia, and New Zealand

(c) Brazil, Iran, Saudi Arabia, and Vietnam

(d) Indonesia, Japan, Singapore, and South Korea

Question: Which of the following is not a member of ‘Gulf Cooperation Council’? (UPSC 2016)

(a) Iran

(b) Saudi Arabia

(c) Oman

(d) Kuwait