Strengthening India-Saudi Arabia Strategic Partnership | 14 Sep 2023

Source: TH

Why in News?

Recently, after the launch of the India-Middle East-Europe Economic Corridor, the Prime Minister(PM) of India welcomed the Crown Prince of Saudi Arabia on a state visit.

• During this significant visit, the two nations discussed various aspects of their strategic partnership and agreed to set up a joint task force to expedite the West Coast refinery project.

What were the Outcomes and Agreements Resulting From the Visit?

• Strategic Partnership Acknowledgment:
  • The PM of India highlighted Saudi Arabia's pivotal role as "one of the most important strategic partners of India."
  • Both leaders emphasized the importance of their partnership, particularly as two rapidly growing nations contributing to regional stability.
• India-Saudi Strategic Partnership Council (SPC):
  • The PM of India and the Crown Prince of Saudi Arabia co-chaired the inaugural meeting of the India-Saudi Strategic Partnership Council (SPC).
  • Discussions covered a wide range of areas, including defence, energy, security, education, technology, transportation, healthcare, tourism, culture, space, and semiconductors.
    • This reflects the comprehensive nature of the economic cooperation between India and Saudi Arabia.
• West Coast Refinery Project Acceleration:
  • This trilateral project, involving ARAMCO(oil company of Saudi Arabia), ADNOC(oil company of the United Arab Emirates) and Indian Companies, is set to receive a USD 50 billion investment.
  • A joint task force was established to expedite the West Coast refinery project.
  • The task force will work on channeling the promised USD 100 billion investment from Saudi Arabia for this project.
  • The West Coast refinery project is India's first and largest greenfield refinery.
    • The project is located in Ratnagiri, Maharashtra and is expected to have a production capacity of 60 million tonnes per annum. When completed, it will be one of the world's largest refineries.
    • The project encompasses various critical facilities, including marine storage and port infrastructure, crude oil terminals, storage and blending plants, desalination plants, utilities, and more.
• Bilateral Agreements and Cooperation:
  • Eight agreements were signed during the visit, strengthening cooperation across various sectors.
    • Notable agreements include collaboration between the Central Vigilance Commission of India and the Saudi Oversight and Anti-Corruption Authority, as well as cooperation in technology, education, and agriculture.
  • An agreement was signed between the National Institute of Technology of India and the Saline Water Conversion Corporation of Saudi Arabia.
• Assurance of Crude Oil Supply:
  • Saudi Arabia affirmed its commitment to being a "reliable partner and exporter of crude oil supplies" to India, ensuring energy security.
• Defence and Anti-Terror Cooperation:
  • Both nations pledged to enhance cooperation in defence and anti-terrorism efforts.
    • A special emphasis was placed on preventing access to "missiles and drones" for terrorist activities.
    • Plans were discussed to strengthen the tourism segment of bilateral relations, aligning with Saudi Arabia's ongoing reforms.
• Geopolitical Significance:
  • The visit holds geopolitical significance as it occurred after Saudi Arabia ended hostilities with Iran through a deal negotiated by China.
  • Saudi Arabia's recent membership in the BRICS (Brazil, Russia, India, China, and South Africa) further underscores its global engagement.

How has India’s Relations with Saudi Arabia been?

• Oil and Gas:
  • Saudi Arabia is currently India’s second-largest supplier of crude oil (Iraq has been India's top supplier).
    • India imports more than 18% of its crude oil requirement and India imports most of its Liquefied petroleum gas from Saudi Arabia
• Bilateral Trade:
  • Saudi Arabia is India’s fourth largest trade partner (after the USA, China and UAE).
  • Bilateral trade in FY22 was valued at USD 29.28 billion, with significant imports and exports.
• Cultural Linkages:
  • Hajj pilgrimage and digitization of Hajj processes reflect the significant cultural ties.
  • India participated as the 'Guest of Honour' at the Saudi National Festival of Heritage and Culture in 2018.
• Naval Exercise:
  • In 2021, India and Saudi Arabia started their first-ever Naval joint exercise called the Al-Mohed Al-Hindi Exercise.
• Indian Community in Saudi Arabia:
  • The 2.6 million-strong Indian community in Saudi Arabia is the largest expatriate community in the Kingdom and is highly respected for its contributions to Saudi Arabia's development.