Robust Saudi-India ties have great potential for growth
Though India and Saudi Arabia have historically enjoyed friendly ties, over the past couple of years there has been a new sense of energy and purpose in this relationship, which is very important to both countries.
Saudi Arabia has traditionally been India’s largest energy supplier, accounting for more than 20 percent of Indian oil and gas imports, while 2.7 million Indian workers form one of the largest groups of expat workers in the Kingdom. These two factors have been the bedrock of the bilateral relationship for nearly seven decades.
Previous key milestones include the visit by King Abdullah to New Delhi in 2006, which marked a turning point in the bilateral ties, and the visit by Prime Minister Manmohan Singh to Riyadh in 2010.
However, the relationship got a complete makeover in 2016, when Narendra Modi visited Saudi Arabia — the first prime ministerial visit from India to Riyadh in six years. This was part of Modi’s renewed engagement with the members of the Gulf Cooperation Council (GCC), who have all had long-term relations with India that have remained largely two-dimensional, revolving around energy and the expat workforce.
Modi’s desire has been to add other crucial aspects to the relationship with Saudi Arabia and that was one of the key objectives of his visit. During his discussions with the Kingdom’s government, Modi called for deeper bilateral ties through greater cooperation on international issues like security and terrorism. He also called for Saudi investment in India’s National Investment and Infrastructure Fund and in areas like energy infrastructure in India, technology industries and agriculture. Modi was honored during his visit by King Salman, who bestowed Saudi Arabia’s highest civilian honor, the King Abdulaziz Sash, on the Indian PM.
The buoyancy in bilateral ties has also been helped by the personal chemistry that Modi shares with Crown Prince Mohammed bin Salman. It was on show at the G-20 gathering in Argentina last November, when the two leaders had detailed discussions on how to further strengthen the relationship. It was there that the crown prince’s visit to New Delhi was finalized.
The two leaders are keen to add elements of defense cooperation to the bilateral relationship, including holding joint military exercises, sharing intelligence, counterterrorism work, and anti-money laundering and terror financing practices. India’s National Defence Academy has already received batches of Saudi military cadets for training. The two countries are also in discussions for India’s assistance in enhancing the defense manufacturing industry in Saudi Arabia and the supply of weapons by India to the Kingdom.
Indian businesses are looking closely at Vision 2030 and they could be a major source of investment in several key projects, including the futuristic Neom city.
Ranvir S. Nayar
MBS’ bold moves toward opening up the Saudi economy and society have been well received in India. Indian businesses are looking closely at Vision 2030 and they could be a major source of investment in several key projects, including the futuristic Neom city, which will offer significant opportunities for investments and joint ventures in an ultra-modern and high-tech environment. Such projects offer an opportunity for Indian businesses to co-develop expertise that might transform the global economy. By being actively involved in a transformative project, even if many elements would only be developed and known as time goes by, Indian businesses can ensure they will not miss the bus when it comes to doing business in the decades to come.
Another area that is up for discussion and review is the $44 billion refinery that Saudi Aramco and the UAE’s ADNOC are jointly building in Ratnagiri, about 400 kilometers south of Mumbai. For both Saudi Arabia and the UAE, this will be their single largest investment in India, which the New Delhi government says is crucial for the country’s energy security.
Employment generation, entrepreneurship and skill developments are other areas where India and Saudi Arabia can significantly enhance their collaboration. Both countries have youth as a very large segment of their population and both need to create an environment and system for training and skilling them to make them job-ready, and also create opportunities for self-employment and entrepreneurship. With a thriving and multi-sectoral small and medium-scale industry that is at the core of the economy, India can definitely lend a hand to the Saudi Arabian government in developing further the SME sector, as well as in facilitating vocational training and education for the Saudi youth. This can be a significant axis of future collaboration between the two nations.
India can also open its market for Saudi Arabia’s non-oil exports and, in turn, gain greater access to the agriculture and foods market in the Kingdom. The relationship, through robust and strong, still has a lot of potential for further growth that can only help both countries. MBS’ visit to New Delhi offers an opportunity to fulfill that potential.
• Ranvir S. Nayar is managing editor of Media India Group, a global platform based in Europe and India that encompasses publishing, communication, and consultation services.