Saudi Arabia's delicate balancing act in the Indian Subcontinent

Against the backdrop of a recent visit by Crown Prince Mohammed Bin Salman, India can be assured that Saudi Arabia's importance as an influencer in the region is clearly not restricted to Pakistan alone.

Indian Prime Minister Narendra Modi created quite a flutter within diplomatic circles when he went out of his way breaking protocol to receive Saudi Arabia's Crown Prince Mohammed Bin Salman on his recent visit to India. In his maiden visit to India, Salman, who is also popularly referred to by his initials of MBS, touched down at the Indira Gandhi International Airport on February 19 for one day. Normally, a Prime Minister of a country does not receive a foreign dignitary at the airport and that task is delegated to a senior government official or a junior minister. Modi's gesture highlighted not only the importance that his administration bestows upon India's ties with Saudi Arabia, but also the underlying tension in the region.

The visit came in the backdrop of a super-charged atmosphere after 40 Central Reserve Police Force (CRPF) jawans were bombed in Pulwama district of Jammu and Kashmir on February 14 by Jaish-e-Mohammad, a terrorist outfit based in Pakistan. Just before visiting India, the Crown Prince had made a two-day trip to Pakistan where he had signed deals worth $20 billion for a refinery and petrochemical complex in Gwadar. His original itinerary had him travel straight to India from Pakistan before continuing eastwards to China. Though planned much in advance, given the sensitivity of the matter, MBS sought to de-hyphenate India and Pakistan by breaking the trip and returning to his native land from Pakistan before starting out for India a day later.

It is this policy of de-hyphenation or treating India and Pakistan as standalone entities with no bearing on each other, that makes Saudi Arabia a friend of both countries and an enemy to none. It has held firm even at a time when Indo-Pakistan relations are at their lowest point in more than a decade. As two Islamic nations, Saudi Arabia and Pakistan are traditionally close to each other. Saudi Arabia has for long been among Pakistan's main patrons helping it out financially for the security that the Pakistan Army provides to the royal family.

That has, however, never come in the way of its ties with India. Accounting for 19 per cent of India's crude imports, Saudi Arabia is India's largest and most trusted oil supplier. With bilateral trade worth $28 billion, Saudi Arabia is India's fourth-largest trading partner and India is its fourth-largest market for exports. Further, there are more than 2.7 million Indians working in Saudi Arabia.

Clearly, both need each other and cannot afford to displease one another. The strength of the economic ties, or rather the inter-dependence of it, has resulted in greater cooperation between the two countries on a host of mutually important matters including global terrorism. While condemning the Pulwama terrorist attack of February 14, MBS said terrorism and extremism were a common threat for the two countries. Further, in the joint statement, Pakistan was mentioned twice, and for the first time in 13 years, when MBS praised the Indian Prime Minister for his consistent efforts to have friendly relations. In another significant diplomatic shift in Saudi Arabia's position, the Crown Prince, on India's behest, also stressed on the need to create conditions necessary for the resumption of a comprehensive dialogue between Indian and Pakistan.

The diplomatic parleys were rounded off with a clutch of deals being signed - MoUs worth a potential investment of $100 billion, five times more than Pakistan, in the next few years. Aramco and the Abu Dhabi National Oil Company (ADNOC) are investing $44 billion to set up the Ratnagiri oil refinery in Maharashtra - the largest greenfield refinery in the world to be implemented in one phase - and SABIC, a Saudi Arabian diversified manufacturing firm, is on the verge of acquiring a major share in a petrochemicals plant in India.

"We are looking to make India a hub (for crude oil supply) in the region. We are looking to build storage facilities in India, we are looking at refineries and downstream assets in India. We are investing in infrastructure that will help India boost its ability to import and export of petroleum products," said Adel bin Ahmed Al-Jubeir, the foreign minister of Saudi Arabia.

“We are building the largest refinery complex in the world with India′s participation at a cost of $ 44 billion. We are looking at India as a rising economic power and as a country of stability and an opportunity. So, we want to have best and strongest possible ties with India."

Saudi Arabia's importance as an influencer for India does not restrict to Pakistan alone. As the Crown Prince's itinerary suggests, his next stop at China and the kingdom's close ties with it means India can use the Saudis for diplomacy with its other bigger neighbour as well. China is Saudi Arabia's largest trading partners with imports worth $46 billion for China in 2018 far outstripped those into Europe or even the US. Both countries are mutually aligned on big signature schemes - China's Belt and Road Infrastructure Plan would mean massive amount of Chinese goods would pass through the Red Sea bordering Saudi Arabia, while the kingdom believes China will play a big role in MBS' vision for 2030 that seeks to reduce Saudi Arabia's dependence on its oil for its economy.

It is in the interest of Saudi Arabia that the larger Indian subcontinent region and China remains peaceful with no change in status quo. Any major battle in the region will likely see the involvement of all three countries, which would only end up harming the kingdom's own business interests in the region. It is this, along with the timing of MBS' visit, that led to speculation that Saudi Arabia may act as a negotiator to de-escalate tensions between India and Pakistan. Though a bit fanciful, the speculation was not fully scotched by the Saudi delegation in India, though they maintained it will not interfere unless both countries want it to mediate.

“The sense is they wouldn't want it to do it themselves but if the two countries want, they are not averse to opening up diplomatic channels,” said a senior Indian diplomat.

“Saudi Arabia and Pakistan are Islamic countries, so they share a lot in common in terms of culture and belief while with India and China, it shares a friendly economic relationship. It does not want to upset any of these three equations and while it understands the three will not ever be friends they don't want them to be sworn enemies either.”

Deep down, scarred by the Jamal Khashoggi affair that has made him unpopular in the West, the peacemaker's role in South-East Asia may actually appeal to MBS even if it may not sit very well on him. It is not something that is entirely new to the kingdom either. Just last year, the leaders of Ethiopia and Eritrea met in Jeddah to sign a deal to set aside their differences, with King Salman, MBS' father, acting as the referee. Replicating it in the Subcontinent may be a bit too far-fetched but Saudi Arabia's increasing economic footprint in the region lends it heft as a foreign policy influencer as well. It is also something that may end up in favour of all the parties involved as well.