Bonds of trust
On his two-day (October 29-30) official visit to Saudi Arabia, Prime Minister Narendra Modi held discussions with the country’s king Salman bin Abdulaziz Al Saud and Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud on matters of bilateral cooperation and investment opportunities
Decades ago, a foundation had been laid for strengthening ties with the Middle East. Over the last few years, India has been successfully building upon the same framework by focussing on furthering strategic and diplomatic relations with countries like the Kingdom of Saudi Arabia (KSA), Iran, Bahrain, the United Arab Emirates (UAE) etc. On almost every occasion that the Indian Prime Minister has visited these nations, he has been conferred with some of the top civilian awards. During his last visit in April 2016, PM Modi was conferred the King Abdulaziz Sash award, KSA’s highest civilian honour by the current King, Salman bin Abdulaziz Al Saud. The ceremony which took place at the royal court was an example of the positive direction for diplomatic relations between the two countries.
It is important to note that since 2014, Prime Minister Narendra Modi has visited eight West Asian countries which has resulted in a proportional increase in foreign investments directly made in India. This is a definitive advance on the path that was defined in the ‘Riyadh Declaration’ signed between India and Saudi Arabia in 2010. During his recent visit, PM Modi addressed the third Future Investment Initiative or ‘Davos in the Desert’ Conference as the KSA seeks to attract technology and investment to diversify its economy for the 21st century. During the visit of King Salman to India in February 2019, an announcement was made for an intention by Saudi Arabia to invest upto USD 100 billlion in Indian infrastructure , energy and mining. The recent announcement by Aramco to acquire 20 percent of reliance industries and a USD 44 billion west-coast refinery and petrochemicals project in Maharashtra with Reliance, Adnoc of UAE and Aramco indicates the shift towards strategic long-term investments. Indian companies are also exploring down and upstream oil sector participation in Saudi Arabia apart from IT, Pharma and healthcare sectors. In the defence sector an MoU was signed to strengthen cooperation in the military acquisition, production R&D and technology areas. It was also reported that B2B agreements worth USD 15 billion were signed on the sidelines of the Future Investment Initiative Conference. The MoU on RuPay card payments will benefit 2.6 million strong Indian diaspora and Haj pilgrims. A strategic partnership council to be led by PM Modi and Mohammed bin Salman has been established, which will ensure timely implementation of agreed and prospective projects and removal of bottlenecks.
From the perspective of the Arabian giant, the Indian premier’s visit is also of utmost importance as the KSA has been pushing for a massive diversification drive that aims to expand its largely oil-based economy into the sectors of manufacturing, technology and tourism. The more recent reforms easing the restrictions on FDI (Foreign Direct Investment), tourism and entertainment have come as precursor to the historic Strategic Partnership Agreement which was signed by Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi during the latter’s visit. A beginning has been made through the MoU signed between Riyadh and New Delhi on cooperation in the field of renewable energy between Saudi Ministry of Energy and Ministry of New and Renewable energy of India. Saudi Arabia now considers India as an attractive destination for investments and a secure market for their oil supplies. Hence, both sides have moved to a strategic engagement in this sector . Saudi Arabia accounts for 17% of Indian oil imports. Saudi Arabia has moved quickly to fill the void In Indian oil imports due to sanctions on Iran as also to create India’s second strategic oil reserve of about 6.5 million tonnes of petroleum.
Prime Minister Modi’s visit to Saudi Arabia has been a precursor to the formation of an alternative, diverse and yet, more inclusive partnership with the country. The current government aims to further strengthen its ties with Saudi Arabia. Over the years, the diplomatic partnership that has been shared between the two countries has developed manifold; be it in the sectors of defence, economy or cultural relations. India aims to further its ties with the Middle Eastern giant. The next meeting between the two leaders will be in Riyadh again in 2020 for the next G20 Summit.