Synergizing ties with Saudi Arabia

Given India’s centuries old connect with the countries in the Gulf region, India has always aspired to build strong ties with the Middle East. But the elephant in the room has been Pakistan. In 2006, King Abdullah on his historic visit to India signed the “Delhi Declaration” injecting fresh momentum to the bilateral ties. Reciprocally in 2010, Prime Minister Manmohan Singh elevated the bilateral engagement to strategic partnership by signing the “Riyadh Declaration”. Despite best efforts by the Indian leaderships, New Delhi failed to override the religion card played by our western neighbour. Finally, Prime Minister Modi crossed this religious rubicon and cultivated extensive ties with Muslims countries since 2014.

Saudi Arabia, is currently the fourth largest trading partner of India with bilateral trade volumes reaching $28 billion. India imports 18% crude and 32% LPG from Saudi. It is home to 2.6 million Indian community, the largest Indian expatriate community abroad and source of $11.239 billion remittances. As birth place of Islam with two holy mosques -Mecca and Medina, Saudi Arabia is considered as a sacred land by Muslims all over the world. India with over 200 million Muslims has deep religious with Saudi. The mainstay of Indo-Saudi relations are robust energy ties, people to people connect and changing geopolitical realities.

Months into power, Modi held bilateral talks with King Salman along the sidelines of the Brisbane G-20 summit in 2014. Barring 2017, when the Kingdom was represented by a foreign ministry official, Modi engaged with Saudi leadership at various G-20 summits. In 2016, as a special gesture, in recognition of India’s valued friendship, King Salman honoured Modi with the “Sash of King Abdul Aziz”, Saudi Arabia’s highest civilian award on his first visit to Riyadh.

In 2018, India represented by Foreign Minister Sushma Swaraj was accorded “Guest of Honour” at the Janadriyah cultural festival who inaugurated Indian pavilion.  Amidst concerns of human rights violations and global condemnation, in the wake of Jamal Khashoggi’s brutal murder, Modi held talks with Crown Prince Mohammed bin Salman (MbS) along the margins of the Buenos Aires G-20 summit, November 2018 and extended an invitation to visit India.  Days after the brutal Pulwama attack, Saudi Crown Prince MbS visited India in February, 2019 Though he disappointed India by failing to name Pakistan for the dastardly terror attacks, he condemned terrorism in all forms and manifestations and signed agreement to strengthen counter terrorism cooperation. He announced over $100 billion investments in Indian infrastructure and oil projects, named India as one of the eight strategic partners for investments and proposed establishment of strategic partnership council.

To overhaul its oil-dependent economy and diversify into service and manufacturing sectors Saudi Arabia ambitiously launched “Saudi Vision 2030” to usher the kingdom into a new realm of economic and social reforms in 2016. Saudi’s economic reforms found a special mention in the World Bank’s recent report. In global rankings, Saudi is now ranked 62, just above India. Accordingly, Saudi initiated various economic reforms and opened up businesses for investment. In 2017, Public Investment Fund (PIF), the Saudi Sovereign Wealth Fund started the first annual Future Investment Initiative (FII), investment forum at Riyadh. The first edition of the FII themed on Artificial Intelligence, big data, crypto currencies and climate change was well attended. Affirming its commitment to modernise Saudi, MbS announced some social reforms like allowing women to drive etc giving a huge fillip to Kingdom’s image which is considered as Mecca of radical Islam. Popular as “Davos of the Desert” the forum except for the social reforms messaging, hardly attracted any international investments. The second edition in 2018 plagued by global condemnation witnessed last minute boycotts by World leaders and financiers. Even the much-anticipated listing of Saudi Aramco was delayed.

MbS keen on ramping up economic ties, post second edition of FII, visited Asian countries and identified strategic partners for investments which included- South Korea, Japan, China, India, the US, the UK, France and Germany. India’s consistent growth rates with promising investment and trade opportunities suited Saudi’s objective of generating sustainable benefits. At the Osaka G-20 summit, MbS extended King Salman’s invitation to attend and deliver key note address at the 3^rd edition of FII to Modi.

Themed on “What is next for global business”, Modi flew to Riyadh on Oct 28^th to address the Plenary session of FII. Speaking at the inaugural session of the three-day forum, attended by heads of states of nine countries and 6000 representatives, Modi emphasised on India’s goal of becoming a $5 trillion economy by 2024. Promising a stable, predictable and transparent policy regime of his government, Modi sought investments in the energy sector that has immense potential for growth and reflected on India’s $100 billion investments in oil and gas infrastructure. Modi’s mentioned about India’s improved ease of doing business rankings. He called upon investors to support India’s startups which are now the third largest in the World and operating in hospitality, medical treatment, transportation, tourism and food delivery. He stressed on the need for easing mobility of talent and manpower. He spoke about India’s plans of investing $1.5 trillion investment to offer a range of amenities to people through an integrated grid comprising of power grid, water grid, mobility card and optical fibre network.

In his short visit of 24-hours, Modi met King of Jordan who was invited for the FII meeting and reviewed bilateral ties. He appreciated his role in promoting harmony and speaking against terrorism. He met three ministers of Saudi Arabia-Minister of Energy, minister of Labour and social development and minister of environment, water and agriculture Saudi Arabia. Modi attended lunch hosted by King Salman, reviewed bilateral ties and various international issues.

After India rescinded special status to Kashmir, Khan travelled to Riyadh twice to obtain Riyadh’s endorsement for its anti-India propaganda. Saudi has a dominant sway over Muslim World and its tacit approval could tilt countries in Pakistan’s favour. But Saudi stayed away from the Kashmir issue. An irked Pakistani Foreign Minister Shah Mehmood Qureshi even lamented “guardians of Ummah (Islamic community) not supporting Pakistan” and Pakistan has to “wage a new struggle”.

Preparing ground for Modi’s scheduled visit to Saudi, NSA, Ajit Doval travelled to Riyadh and the UAE in the first week of October and discussed wide range of issues including the Kashmir issue. The official note released by NSA stated, “The Crown Prince expressed understanding about India’s approach and actions in J&K”. Saudi’s endorsement not only blunted Pakistan’s global propaganda but also established India as a valued customer of oil, strategic and economic partner of Saudi. Needless to say, Modi’s relentless outreach with the Gulf through bilateral visits and extensive engagement has made a world of difference.

Known to be global messiah for the radical Islam, Saudi’s disapproval of terrorism is viewed with scepticism. But India and Saudi signed an agreement on extradition and counter terrorism and intelligence sharing. Saudi’s silent extradition of wanted fugitives added an element of trust into the bilateral ties.

During Modi’s visit, transforming decades of buyer-seller relationship, countries launched Strategic Partnership Council, integrated India’s e-Migrate with e-Thawtheeq, Saudi’s portal to streamline the mobility of workers, launched Ru Pay card adding a fresh chapter in people to people ties. After the UAE, Singapore, Bahrain, Bhutan Saudi became fifth country to accept Ru Pay card. Clearly, India’s partnership with Saudi now encompasses a gamut of avenues.

Giving a major fillip defence cooperation for enhancing maritime security, countries will be holding joint naval exercises in December. Furthering the cooperation India and Saudi signed 12 MoUs in the areas of renewable energy, security cooperation, combatting illicit trafficking, defence production and military acquisition, civil aviation, medical regulations, Small and Medium Enterprises, Diplomatic studies, Indian strategic petroleum reserves, Stock exchanges and e-payments. Economic engagement is becoming the corner stone of contemporary strategic partnership.  Aramco’s decision of acquiring $15 billion worth 20% stakes in RIL and partnering in the West Coast Refinery to be set up at Raigadh in Maharashtra will open a new era in economic cooperation. Saudi pledged to contribute towards the strategic reserves at two places with capacity of 6.5 million tons each.

A significant achievement of Modi’s current visit besides ensuring stable energy supplies is a tacit affirmation from Saudi of “categorical rejection of all forms of interference in the internal affairs of countries”.  Accordingly, Saudi must now stay clear of Kashmir issue with India asserting that as its internal affair. Reiterating India’s position, Modi in an interview to Arab News stated that India will stay away from the region’s conflicts and will respect principles of sovereignty and non-interference.

IMF slashed growth predictions for Saudi from 1.9% to 0.2% due to cuts in oil productions. After the attacks on oil infrastructure, agencies down graded Saudi’s rating. Economy is in dire straits. Unending conflicts, sectarian violence and strife for domination in the region isn’t really presenting a vibrant picture of the desert kingdom. Saudi’s attempts to woo investors haven’t met with significant success thus far. At this juncture, economic engagement with a growing economy like India with unquenchable appetite for energy resources and investments can be valuable for Saudi. American oil sanctions regime and the uncertainty pertaining to it threatened to impede India’s growth run. A robust energy partnership and participation in India’s strategic reserves supplies by Saudi can buffer India’s energy interests from the vagaries of uncertain oil supplies. On his short visit to Riyadh, Modi successfully synergised the bilateral ties by forging a new tactical relationship.

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