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MBS Visit Strengthens the Indo-Saudi Strategic Partnership

Ms Lakshmi Priya was Research Analyst at Manohar Parrikar Institute for Defence Studies & Analyses, New Delhi Click here for detail profile.
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  • March 05, 2019

    Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud (Bin Salman or MbS) made his first state visit to India on February 19-20, 2019 as part of a three nation Asia tour that included Pakistan and China. The visit took place in the backdrop of the Pulwama terror attack by the Pakistani jihadi terrorist group Jaish-e-Mohammed in which 44 CRPF personnel were killed. Saudi Arabia was one of the first countries to strongly condemn the Pulwama terror attack. Foreign Minister Adel bin Al-Jubeir denounced the attack saying that "anyone who supports and finances the menace must be designated and must be punished". Prime Minister Narendra Modi received the Crown Prince at the airport going beyond protocol. India-Saudi Arabia ties had entered an era of strategic partnership with the signing of the Riyadh Declaration in 2010, followed by the Memorandum of Understanding (MoU) on defence cooperation in 2014. During the visit of MbS, the two countries agreed to fortify the partnership by establishing a high level monitoring mechanism in the form of the Strategic Partnership Council. They also signed five Memorandums of Understanding (MoUs) related to investment, tourism, housing, and information and broadcasting.

    After PM Modi’s last state visit to Saudi Arabia in 2016, the return state visit of  King Salman to India was scheduled but postponed twice, first in 2017 and again in 2018. But certain regional developments made it important for the Crown Prince to pay a visit in early 2019. Firstly, the alleged murder in October 2018 of the US-based Saudi journalist Jamal Khashoggi in Saudi Arabia’s consulate in Istanbul led to widespread criticism of the Kingdom. The Riyadh conference organized by Saudi Arabia in the same month was boycotted by the chief executives of JP Morgan, Siemens and Blackrock, as well as by the CEO of the International Monetary Fund. In addition, the Governments of France, Australia, New Zealand and the Netherlands pulled out of the conference. Secondly, Saudi Arabia also seems to be losing its hold on the Gulf Cooperation Council, with Qatar refusing to bow down despite the imposition of sanctions starting June 2017. Third, Russia’s proactive diplomacy in the Middle East combined with Trump signalling a less active role in the region have compelled Saudi Arabia to look east towards India and China.

    Terrorism as a common concern

    The key focus areas during the visit of MBS to India were terrorism, investment, energy, skill development, security and the Indian diaspora in Saudi Arabia.  The Pulwama terror attack brought the issue of terrorism to the fore and both Modi and the Crown Prince emphasized that all countries should renounce the use of terrorism as an instrument of policy. India and Saudi Arabia agreed to constitute a ‘Comprehensive Security Dialogue’ at the level of National Security Advisors and set up a Joint Working Group on Counter-Terrorism.

    During the last several years, Saudi Arabia has been cooperating with India in countering terrorism. It has been repatriating Indian citizens who have been found involved in terrorist attacks and related activities. In 2012, it extradited the 26/11 suspect Sayed Zabiuddin Ansari also known as Abu Jundal or Abu Hamza to India. Since then, 18 terror suspects have been sent back by Saudi Arabia and the United Arab Emirates to India. During the visit, the Saudi Crown Prince reiterated the willingness to share intelligence to combat terrorist activities. India and Saudi Arabia also signed an MoU on Technical Cooperation in Cyber Space and Combating Cyber Crime. They expressed serious concern at the misuse of cyber space as a medium to promote subversive and extremist ideologies. They also noted the need for concerted action by the international community against terrorism through the conclusion of a Comprehensive Convention on International Terrorism (CCIT), which India had proposed as far back as 1996.

    Building the Strategic partnership

    Saudi Arabia is India’s fourth largest trading partner after the US, China and UAE. India and Saudi Arabia aim to transform their traditional buyer seller relationship into a strategic partnership. India imports nearly 80 per cent of its energy needs, and about 20 per cent of that comes from Saudi Arabia. The Kingdom has been the top exporter of crude oil to India. In 2017-18, India imported US$ 16.8 billion worth of crude from Saudi Arabia. India is dependent on the Persian Gulf for its energy security and the rise in oil prices can have a destabilizing effect on its economy. With the United States imposing fresh sanctions on Iran after withdrawing from the Joint Comprehensive Plan of Action (JCPOA) and the waiver granted with respect to continued oil imports from Iran slated to end in May 2019, India, which sources nine per cent of its oil imports from Iran, has to find alternate sources. This compulsion makes Saudi Arabia and other Gulf countries important for India to meet its energy requirements.

    For its part, Saudi Arabia aspires to diversify its economy and promote economic stability through long term investments. During the visit, the Crown Prince highlighted his intention to invest more than US$ 100 billion in India in the areas of refining, petrochemicals, infrastructure, agriculture, minerals and mining, manufacturing, education and health. In addition, an MoU was signed to enable Saudi investments in the National Investment and Infrastructure Fund (NIIF) for the building of roads, ports, airports, power etc. Furthermore, a Framework cooperation programme was signed between Invest India and Saudi Arabia General Investment Authority (SAGIA) to facilitate investment by the private sector and the establishment of joint ventures in the fields of petrochemical industries, pharmaceuticals and medical equipment.

    Under the leadership of Bin Salman, Saudi Arabia is embracing socio-economic reforms and is keen on India becoming part of this effort. The two countries agreed to align the Saudi Vision 2030 and thirteen Vision Realization Programs with India’s flagship initiatives of Make in India, Start Up India, Smart Cities, Clean India and Digital India. The Saudi Vision 2030 also focuses on developing a vibrant entertainment industry. As part of its economic reforms Saudi Arabia is building an amusement hub called Qiddiya entertainment city and seeks Indian investment in the venture.

    Saudi ARAMCO, along with Abu Dhabi National Oil Company (ADNOC), has pledged to invest in the Ratnagiri Refinery and Petrochemicals Limited (RRPL). An Indian consortium composed of Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation, RRPL is estimated to cost US$ 44 billion and expected to become operational in 2025. In addition, India and Saudi Arabia are exploring the possibility of a US$10 billion investment through the Public Investment Fund and the technology partners of RRPL. The two countries also intend to discuss other investment opportunities worth $26 billion in the Project.

    Way Forward

    The Crown Prince’s visit has led to a cementing of ties through commitments to enhance cooperation in a number of areas, greater investments in each other’s economy, and encouraging people to people contact. The two countries can promote cooperation in the areas of agriculture, renewable energy and Indian diaspora in Saudi Arabia. Finding ways to enhance India’s farm exports to Saudi Arabia needs to be explored. Saudi Arabia imports farm produce worth more than US$ 19 billion a year, but India has only an 11 per cent share in this market. With a view to boosting Indian farm sector exports to West Asia, India has decided to remove all restrictions on organic products and processed products. Apart from that, as Saudi Arabia intends to invest in renewable energy, new facets of collaboration can be explored in line with its agreement to join the International Solar Alliance.  

    Saudi Arabia is home to more than 3.2 million Indians engaged in various sectors and professions. India and Saudi Arabia look forward to integrate their migration platforms e-Migrate and e-Tawtheeq. In order to enhance people to people contact, India has consented to increase the seats of Saudi Arabian Airlines from 80,000 seats per month to 112,000. For its part, Saudi Arabia has agreed to increase India’s haj quota to two lakh.

    Indo-Saudi ties have come a long way from being transactional business relations to evolving into a strategic partnership. The Crown Prince’s visit is indicative of India’s growing acceptance as an important global power and reflects the strong ties that it has forged in recent decades with Gulf countries in general and Saudi Arabia in particular. Last year, External Affairs Minister Sushma Swaraj had attended the Janadriyah festival in Saudi Arabia as a guest of honour and inaugurated the India pavilion showcasing India’s growth and development along with cultural aspects. Saudi Arabia also played a key role in the invitation that was extended to India by the United Arab Emirates to be a ‘guest of honour’ at the 46th Session of the Council of Foreign Ministers of the Organization of Islamic Cooperation (OIC).This broadening of the relationship between India and Saudi Arabia is likely to take the strategic partnership to new heights.

    Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.