India and Saudi Arabia: Strengthening Bonds for a New Era

28 Apr India and Saudi Arabia: Strengthening Bonds for a New Era

This article covers “Daily Current Affairs” and the Topic of  India and Saudi Arabia: Strengthening Bonds for a New Era

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GS-2-International Relations- India and Saudi Arabia: Strengthening Bonds for a New Era

FOR PRELIMS

What are the key areas of collaboration between India and Saudi Arabia under Vision 2030?

FOR MAINS

What are the major outcomes of the Strategic Partnership Council between India and Saudi Arabia?

Why in the News? 

Prime Minister Narendra Modi cut short his two-day visit to Saudi Arabia after a terrorist attack in Pahalgam, Jammu and Kashmir, killed over 20 people, mostly tourists. Mr. Modi, who arrived in Jeddah, delayed his scheduled meeting with Crown Prince Mohammed bin Salman to assess the situation in Kashmir. Despite the tragic developments, he held bilateral talks with the Crown Prince, participated in the Strategic Partnership Council meeting, but skipped the official dinner. Originally scheduled to return later, the Prime Minister decided to return to India early. The visit reaffirmed the strong bilateral ties between India and Saudi Arabia, even as urgent domestic developments required Mr. Modi’s early return.

Evolutions of India-Saudi Arabia ties 

India-Saudi Arabia areas of Convergence 

1. Energy Security and Transition: Saudi Arabia remains India’s 3rd largest crude oil supplier (14.3% of imports in FY 2023–24) and 3rd largest LPG supplier (18.2%). Both countries are expanding cooperation into green hydrogen production, renewable energy R&D, and energy transition technologies.
2. Strategic and Defence Cooperation: Defence ties have deepened with the first joint land exercise EX-SADA TANSEEQ held in 2024. New agreements focus on joint defence manufacturing, cybersecurity, and intelligence-sharing to enhance strategic security cooperation.
3. Trade and Investment Growth: Bilateral trade reached USD 42.98 billion in FY 2023–24. Saudi Arabia’s Public Investment Fund (PIF) plans major investments in Indian logistics, infrastructure, and the IMEC trade corridor, while Indian companies are exploring sectors in Saudi Arabia under Vision 2030.
4. Digital and Technology Collaboration: India and Saudi Arabia have agreed to co-develop digital public platforms similar to UPI and Aadhaar. Collaboration in emerging technologies like AI, blockchain, and semiconductor innovation is also expanding rapidly.
5. Space and Healthcare Cooperation: Both countries signed a fresh MoU on space cooperation for peaceful uses (satellite data sharing, lunar missions). In healthcare, they agreed to work on fast-tracking regulatory approvals and strengthening pharma and biotech innovation.
6. Cultural and Educational Exchange: Tourism, Bollywood collaborations, and education partnerships are being promoted under Saudi Vision 2030. Cultural diplomacy has been strengthened through yoga promotion and academic exchange programs.
7. Labour Welfare and Diaspora Engagement: With 2.6 million Indians living in Saudi Arabia, both sides have signed MoUs for migrant worker protection, reforms to the Kafala system, and faster grievance redressal mechanisms to safeguard diaspora interests.
8. Regional and Multilateral Cooperation: India and Saudi Arabia coordinate closely in G20, BRICS+, International Solar Alliance (ISA), and the Gulf Cooperation Council Plus frameworks, promoting a multipolar, rules-based world order.

India-Saudi Arabia areas of concern 

1. Geopolitical Divergences: Saudi Arabia’s close ties with Pakistan often contrast with India’s security interests, especially on Kashmir-related matters.
2. Energy Dependency Risks: India’s heavy reliance on Saudi oil (14.3% of crude imports) makes it vulnerable to global price volatility and supply disruptions.
3. Slow Realisation of Investment Promises: Saudi commitments of billions through the Public Investment Fund (PIF) are delayed or under-implemented, affecting economic momentum.
4. Labour Rights and Welfare Issues: Despite reforms, Indian workers (2.6 million strong) still face problems under the evolving post-Kafala labour system, like wage disputes and lack of legal recourse.
5. Religious and Cultural Sensitivities: Challenges persist over Hajj quota negotiations, rights of women pilgrims, and Saudi Arabia’s strict socio-cultural norms, limiting India’s soft power outreach.
6. Trade Imbalance: Bilateral trade remains skewed (high imports of oil vs. lower exports from India), restricting the balance of economic benefits.
7. Strategic Alignment Gaps: India’s ties with Israel and Iran do not always align with Saudi Arabia’s regional alliances, creating friction in broader Middle East diplomacy.
8. Uncertainty Over Green Energy Transition: As India accelerates towards renewables, Saudi Arabia’s oil-centric economy could create long-term energy strategy mismatches.

Recommendation to strengthen ties 

1. Diversify Economic Cooperation: Expand beyond energy to sectors like technology, fintech, healthcare, renewable energy, and AI. Strengthen Saudi investments in Indian infrastructure and start-ups.
2. Strengthen Defence & Security: Enhance joint defence production, military exercises, and cybersecurity cooperation. Increase maritime security collaboration in the Indian Ocean.
3. Improve Labour & Diaspora Welfare: Continue labour reforms to improve worker rights and dispute resolution. Promote safe migration policies and skill recognition for Indian workers.
4. Foster Cultural & Educational Ties: Promote cultural diplomacy, academic exchanges, and tourism. Expand Bollywood-Saudi film collaborations.
5. Collaborate on Technology & Innovation: Build joint innovation hubs and focus on AI, blockchain, and clean energy. Leverage India’s digital expertise (e.g., UPI, Aadhaar) to support Saudi Vision 2030.
6. Strengthen Space & Scientific Cooperation: Enhance collaboration in space exploration, satellite data, and biotech research.
7. Expand Trade in Green Technologies: Collaborate on renewable energy, green hydrogen, and sustainability projects.
8. Enhance Multilateral Cooperation: Work together in the G20, BRICS, UN, and GCC to foster global stability and Middle East peace.

Conclusion

India-Saudi Arabia relations have evolved significantly, from ancient trade and cultural exchanges to a robust strategic partnership. The two nations are now aligned in key areas like energy security, defence, technology, and regional cooperation. Despite facing challenges such as geopolitical divergences and labour welfare issues, both countries continue to deepen their ties under the framework of Saudi Arabia’s Vision 2030 and India’s “Think West” policy. To further strengthen these relations, both nations should focus on diversifying economic cooperation, enhancing defence collaboration, addressing labour issues, and promoting cultural and educational exchanges. By leveraging emerging technologies like AI and clean energy, and by enhancing multilateral cooperation in forums such as the G20 and BRICS, India and Saudi Arabia can ensure a future-proof and mutually beneficial relationship.

Prelims Questions