Strong economic partnerships and long-lasting people-to-people bonds have provided a solid platform for bilateral relations between India and Saudi Arabia. A glaring testimony of this strong connection is that Saudi Arabia offers a home away from home to a population of 2.6 million Indian expatriates.
Robust economic partnerships and strong people-to-people bonds have provided a firm bedrock for bilateral relations between Saudi Arabia and India.
When Saudi Prince Mohamed Bin Salman visited India in February last year, Prime Minister Modi broke protocol by going personally to receive him at the airport - a poignant symbol of the Kingdom's importance to India. Saudi Arabia, of course, had long demonstrated its respect and importance for its relationship with India, when it awarded PM Modi the Kingdom's highest civilian honour - the King Abdulaziz Sash Award.
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Robust economic partnerships and strong people-to-people bonds have provided a firm bedrock for bilateral relations between the two nations. Saudi Arabia, after all, is home to a diaspora community of 2.6 million Indians.
Economically, the two countries share a strong relationship with trade and investment forming the cornerstone of bilateral relations. Saudi Arabia is India's fourth largest trade partner and an important energy partner, supplying around 18 per cent of India's crude oil requirement and 30 per cent of its LPG requirement. According to figures published by the Indian Department of Commerce, bilateral trade was valued at US $33.07 billion in 2019. India's imports from Saudi Arabia reached US $26.84 billion and exports to Saudi Arabia were worth US$ 6.24 billion, an increase by 12.18 per cent over the year before.
The main sectors of trade and investment between the two are as follows:
Energy:
Saudi Arabia has consistently been one of India's top suppliers of crude oil and gas over the years. According to the Directorate General of Foreign Trade, India imported 41.38 MMT of crude oil valued over US $ 20.4 billion in 2019-20. In 2019, Saudi ARAMCO subsidy, SABIC invested over US $100 million to set up a R&D Centre in Bangalore. The previous year, Saudi Aramco signed a MoU with Mumbai based GumPro to set up a drilling fluids facility and in August 2019, the company announced its plans to acquire 20 per cent share in the Reliance Industries Limited's Oil and Chemical business.
Agriculture and Food:
India continues to be an important partner for the Kingdom to import food products like rice, meat, sugar, milk powder. Both nations have taken cooperative steps to secure availability of agro-products in cases of emergency situations. The Saudi Agricultural & Livestock Investment Company (SALIC), owned by Public Investment Fund has also acquired stakes in Indian export companies, such as LT food- an Indian multinational rice brand.
Healthcare:
India has for long held it prowess in healthcare, being dubbed the pharmacy of the world. The current Covid-19 pandemic has only brought India's strength in this sector. In May 2020, Riyadh requested medical aid from India in the former of healthcare staff. India responded by permitting 835 of medical professionals to travel to Saudi Arabia to help with Covid-19 pandemic relief and medical aid effort. In turn, Saudi authorities opened up the healthcare system for the Indian community and provided free healthcare during the ongoing pandemic. The two nations have continued to support each other via a steady flow of medicines and other healthcare equipment.
ICT:
The Covid-19 pandemic has accelerated India's digital adoption, quickly making the digital and tech sectors two of the fastest growing markets. Several Saudi companies are looking at enhancing their virtual presence through application developments and also towards outsourcing 25 per cent of their operations. Cyber-security is another area which holds immense potential for India-Saudi Arabia trade in services. The recently established National Cybersecurity Authority (NCA) is engaging with Indian entities for expertise sharing and training of Saudi professionals.
Saudi Arabia is 39th largest investor in India with investments amounting to US $315 million.
Saudi Arabia is 39th largest investor in India with investments amounting to US $315 million. According to figures published by the Saudi Arabian General Investment Authority (SAGIA), there are 476 Indian companies registered as joint ventures/100 per cent owned entities worth US $1.5 billion as of March 2020.
President Ram Nath Kovind and Prime Minister Narendra Modi welcome Saudi Arabia Crown Prince Mohammed bin Salman at the Rashtrapati Bhawan last year. Saudi Crown Prince Mohamed Bin Salman announced a $100 billion investment during this visit.
Major Indian companies and corporate groups such as L&T, TATA, Wipro, TCS, TCIL, Shapoorji & Pallonji, Air India, Go Air, Indigo, Spice Jet etc. have an established presence in Saudi Arabia. Inversely, Saudi Sovereign Wealth Fund-backed Soft Bank's 'Vision Fund' has invested several billion dollars in Indian start-ups such as Delhivery, FirstCry, Grofers, Ola, OYO, Paytm and Policy Bazaar. In 2019, the Saudi Ministry of Energy, Industry and Mineral Resources signed a MoU with the Indian government to invest in India's National Investment and Infrastructure Fund Limited (NIIF). In June this year, Saudi Arabia's sovereign fund PIF (Public Investment Fund) has announced to invest US $1.5 billion in Jio Platforms, India's leading telecommunication and digital services company.
Saudi Arabia has consistently been one of India's top suppliers of crude oil and gas over the years, supplying around 18 per cent of India's crude oil requirement and 30 per cent of its LPG requirement.
It was only a week ago, when Pakistan, together with Iran, Turkey and Malaysia, attempted to convene a summit of Islamic states in an attempt to split the Organisation of Islamic Cooperation in a stunt to punish India for the change of status quo in Jammu and Kashmir and to snub Saudi Arabia for not condemning India's actions or using its heft in the OIC to pressure India. The result, of course, was Pakistan ending up shooting itself in the foot - a trademark idiosyncrasy. An irked Saudi Arabia responded by demanding a payment of $1bn, part of its $6 billion bailout package to buoy up Pakistan's sinking economy in 2018. To add insult to injury, Riyadh is yet to respond to Pakistan's request to extend the $3.2 billion oil credit it had previously offered Pakistan.
Inversely, Saudi Arabia's relations with India is and has been on the rise since Prime Minister Modi came to the helm. During his visit last year, (soon after India passed the Citizenship Amendment Act) Saudi Crown Prince Mohamed Bin Salman announced a $100 billion investment in the forthcoming years in diversified sectors such as energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining, manufacturing, education and health.
With India's economic and strategic heft growing on the world stage, it would appear that the India-Saudi relationship will only continue to grow over the years.