INDIAN Finance Minister Palaniappan Chidambaram’s recent trip to Saudi Arabia to attend the India–Saudi Arabia Joint Commission meeting can open up new vistas of economic opportunities for the citizens of these two great countries.
During the successful discussion between Chidambaram and the Saudi leadership, both the nations agreed to build on past achievements and work closely to further strengthen the bilateral strategic relationship of mutual benefit. Indeed, New Delhi, in particular, has a vested interest in engaging the Kingdom in a strategic partnership that goes beyond the traditional energy sector. In fact, until Custodian of the Two Holy Mosques King Abdullah’s arrival in New Delhi in early 2006 (his first official trip outside Middle East since ascending the throne a year ago) as the guest of honor for the Republic Day celebrations, both India and Saudi Arabia somehow failed to warm up the relationship and consequently elevate the ties to the next level.
Perhaps, the complicated political dynamics of the Cold War created this communication gap between Asia’s two important nations who could have otherwise benefited from each other’s strengths immensely. Most importantly, King Abdullah endeared himself to the people of India by his famous statement declaring the giant South Asian nation to be his second home. This significant remark not only helped revitalize a rather lackluster tie that dates back to centuries but also heralded a strategic shift in Saudi foreign policy. Till then the Saudi establishment’s views on South Asia was influenced by the tumultuous Indo-Pak relationship and New Delhi’s age-old intransigence over Kashmir. No doubt, Saudi Arabia’s new approach helped jettison the irritants that troubled the bilateral relationship in the past though trade and cultural links between the two nations can be traced back to as early as 3rd millennium BC. This flourishing trade relation became the backbone of Arabian economy and Arab traders held a monopoly in spice trade conducted between India and Europe. As the Indian finance minister himself admitted, there is an urgent need for enhancing mutual understanding to tap into the hitherto untapped potential that the two complementary economies provide. For India, Saudi Arabia’s importance not only lies in the country’s status as the sacred home to the two holiest shrines in Islam, revered by nearly 170 million Muslims in India, but also as a generous host to 2.8 million Indian passport holders who constitute approximately seven percent of the Kingdom’s population.
The most defining factor in Saudi-India relationship is undoubtedly a strong people-to-people contact built and nurtured over centuries. It is therefore nothing unnatural that both India and Saudi Arabia have discovered complementarities in the flow of human and financial capital. While migration of skilled Indian human-capital into the Kingdom can significantly boost the Saudi government’s efforts to diversify and modernize the country’s economy, Saudi Arabia’s abounding financial resources on the other hand can be exploited in bolstering India’s infrastructural development programs. New Delhi’s decision to look beyond the traditional energy sector to seek Saudi cooperation and investment in infrastructure, petrochemicals, manufacturing, services and hospitality stems from this realization.
In fact, Saudi Arabia too has evinced interest in the emerging Indian market as evident from Saudi Basic Industries Corporation (SABIC) and Royal Commission for Jubail and Yanbu Chairman Prince Saud bin Abdullah bin Thunayan’s statement. Speaking at the inaugural program of SABIC Technology Center in Bangalore, he observed: “India is an important investment market for Saudi Arabia in Asia.” It is clear from SABIC chairman’s words that the Kingdom has full faith in the future of India — a rapidly developing country where partnership and inclusive development is of top priority. Also, this is the most opportune moment for India to recast her policy parameters in the strategically crucial petroleum sector to eliminate the country’s upstream, midstream and downstream deficiencies. Since, Saudi Arabia has attained many milestones and privileges in this field and is heading to become the leading global hub for downstream petrochemical products, Indian oil companies like Indian Oil Corporation — the anchor investor in Paradip’s special petroleum, chemicals and petrochemicals investment region for which Chidambaram has lobbied for Saudi investment — can be benefited by capital as well as technology infusion.
India, being the worlds’ fourth largest oil consuming country, is in dire need of augmenting her strategic petroleum reserve. But a country which imports 80 percent of her crude consumption must encourage the domestic players in the energy sector to adopt consortium approach so as to maximize upstream integration. And to achieve this objective aimed at reducing fuel expenditure, dismantling the buyer-seller relationship between Saudi Arabia and India is of paramount importance.
Moreover, mutual partnership in multiple fronts like tackling piracy, confronting terrorism, preventing illegal arms, narcotics and human trafficking and collaboration in information technology, food processing, health care, biotechnology, automobile industry, space exploration and defense research and production can revolutionize the relationship between two rich Asian cultures.
A vibrant Saudi-India relationship at the end of the day is a win-win proposition for both countries. “The trading ties between Saudi Arabia and India are among the most-strategic bilateral bonds for either country,” says a Banque Saudi Fransi report. The upcoming India visit of Crown Prince Salman, deputy premier and minister of defense, will surely help tie up loose ends and capture the cooperative spirit in the realms of security, economics, politics, culture and science and technology.
• Seema Sengupta is a Kolkata-based journalist and columnist.
