India and Saudi Arabia: Strategic Partnership Council
- India and Saudi Arabia Strategic Partnership Council was set up in October, 2019 during the visit of the Prime Minister of India to the Kingdom of Saudi Arabia.
- India and Saudi Arabia council is headed by the Prime Minister of India and Crown Prince Mohammed and meets every two years.
- Two main pillars of the council:
- Political, Security, Social and Cultural Committee
- Committee on Economy and Investments
- Significance: Saudi Arabia is now only the fourth country after Germany, Russia and Japan with whom India has an intergovernmental mechanism headed by the Prime Minister of India
India and Saudi Arabia: Functions of the Council
- India and Saudi Arabia council aims to boost ties in strategic areas such as defence, counter-terrorism, energy security as well as renewable energy.
- India and Saudi Arabia council aims to enable leadership at the highest level in both countries to meet regularly as well as monitor progress in ongoing initiatives under a strategic partnership.
- The council wants to help identify new areas for forging strategic engagement and will define goals to be achieved and benefits to be derived.
India and Saudi Arabia Area of Discussion
- India’s Commerce and Industry Minister attended the ministerial meeting of the India and Saudi Arabia Strategic Partnership Council.
- Priority areas of cooperation include collaboration in the digital fintech sector through operationalization of UPI and Rupay Card in Saudi Arabia.
India and Saudi Arabia Trade
- The Kingdom of Saudi Arabia is India’s fourth largest trade partner (after USA, China and UAE). The bilateral trade in FY22 (Apr-Dec) was valued at US$29.28 billion.
- Imports: India’s imports from Saudi Arabia were valued at US$22.65 billion. India imports around 18% of its crude oil requirement and ~22 % of its LPG requirement from Saudi Arabia.
- Other products include fertilizers, chemicals, plastic and its products.
- Exports: Exports to the Kingdom were worth US$6.63 billion. Major commodities exported are engineering goods, rice, petroleum products, automobiles, chemicals, textiles, food products, ceramic tiles etc.
Saudi Arabia Investment in India
- Nanar refinery project: Saudi Arabia has proposed to invest US$44 billion in ‘West Coast Refinery & Petrochemicals Project’ in Maharashtra.
- The refinery will be a joint collaboration between Indian consortium (Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation), Saudi Aramco and Abu Dhabi National Oil Company.
- Reliance Industries: Aramco, the world’s top oil exporter, has signed a non-binding agreement to buy a 20% stake in Reliance’s O2C business for $15 billion in 2019.
- Funding: Saudi Arabia’s Public Investment Fund (PIF) has invested US$1.49 billion (2.32% stake) in Reliance Industries’ Jio Platforms.
- Saudi Agricultural and Livestock Investment Company (SALIC) made an investment of $17.23 million to acquire a 29.91% stake in Daawat Foods Ltd.
India and Saudi Arabia Relations: Challenge
- Saudi Arabia-Iran rivalry: Saudi Arabia’s regional rivalry with Iran can be an impediment for India to pursue joint-collaboration with both the countries.
- Internal politics: Internal politics in India, especially related to religious minorities, can influence future relations.
- Pakistan factor: India’s strained relationship with Pakistan could play a spoilsport in realizing true potential of India-Saudi ties.