While energy security is a crucial aspect of India's relationship with Saudi Arabia, the cooperation between the two nations has now progressed to strategic cooperation and defence ties

India, along with China, is among those nations that have good relations with both Saudi Arabia and Iran. This helps them to diversify their oil imports, especially after the US withdrew sanctions waivers for oil imports from Iran. Energy security is a crucial aspect of Prime Minister Narendra Modi’s visit to Saudi Arabia. India gets 18 per cent of its crude oil and 22 per cent of its Liquefied Petroleum Gas (LPG) requirements from the kingdom.

A memorandum of understanding (MoU) was signed between Aramco and Indian Strategic Petroleum Reserves Limited (ISPRL). Aramco can sell Indian refiners a portion of the 4.6 million barrels of oil stored at the ISPRL facility in Padur, Karnataka. These investments are a way to rope in big Indian refiners as customers. India has huge energy needs and Gulf producers like Saudi Arabia are keen to help satisfy this demand.

Ellen R Wald, president of Transversal Consulting, says, “Saudi Aramco is a major supplier of oil to India. The sanctions on Iranians have only increased Saudi Arabia’s importance as a reliable source of oil to the growing Indian market. At the same time, Aramco sees India as an important growth area and is looking to grow its investment in the country in the refining sector.”

Hasan Alhassan, associate fellow on Gulf-South Asia relations at the International Institute for Strategic Studies, says, “By inviting Prime Minister Modi to deliver the keynote address at its apex economic summit, Saudi Arabia wants to showcase to the world the strength of its growing relations with India, a key emerging power. In return, the visit will enable  Modi to claim that his Government’s controversial decision on Jammu & Kashmir has done nothing to harm India’s relations with Muslim countries.

“On the economic front, Modi is probably hoping to inject momentum into planned Saudi investments in India’s refining and petrochemicals sector, reportedly worth tens of billions of dollars. Saudi Aramco is negotiating the purchase of a sizeable portion of Reliance Industries’ refining and petrochemical business, while teaming up with Abu Dhabi’s Adnoc to set up a massive refinery in Maharashtra.

“Moreover, Modi’s visit — preceded a few weeks earlier by National Security Advisor (NSA) Ajit Doval’s appearance in Riyadh — also appears to carry a security component in the form of joint naval exercises and cooperation agreements in the area of defence procurement.” Against the backdrop of the drone-and-missile attacks on Saudi Aramco in September, New Delhi is anxious to avoid military escalation in the Gulf, a region that supplies India with almost two thirds of its oil imports and is home to millions of NRIs.

Saudi Arabia as a leading Islamic nation and the custodian of the two holy mosques, Harmain Shareefain and Al-Masjid an-Nabawi, can offer India its support on the Kashmir issue.

Ashok K Behuria, senior fellow and coordinator of the South Asia Centre at New Delhi-based think tank  Institute for Defence Studies and Analyses (IDSA) says this point of view is flawed. He says that “we should stop looking at India-Saudi relations from the narrow prism of Kashmir or Indo-Pak relations. India and Saudi Arabia are enhancing strategic dialogue. The India-Saudi relationship is a multi-layered strategic relationship with energy, investment and  defence cooperation in its purview.” 

Qamar Agha, retired professor of West Asia Studies at Jamia Millia Islamia University, says that “until now, Saudi Arabia looked at India through the Pakistan prism but that’s in the past now. Globalisation is forcing India and Saudi Arabia to come closer. Ideology and politics are in the back seat and economics is the driver of the relationship.”

Bilateral trade is $27.5 billion, mostly in petroleum products, in favour of Saudi Arabia and $5 billion in favour of India. Saudi Arabia is now looking to invest $100 billion in India, a country with a huge middle-class of 250-300 million people.

Though at present the Gross Domestic Product (GDP) growth rate of the India has slipped to five per cent in the first quarter of the financial year, the lowest in over six years, there are hectic efforts being made by the Government to ensure economic recovery through concerted fiscal reforms.

The Indian economy is at the $2.7 trillion mark and Finance Minister Nirmala Sitharaman expects it to grow to $5 trillion by 2024-25. Also, over 2.6 million Indians work in Saudi Arabia and send home remittances to the tune of $10 billion or more annually.

The main driver in India-Saudi Arabia relations might not be energy ties or search for legitimacy from the country that is custodian of the two holy mosques. It is strategic cooperation and defence ties.

The Strategic Partnership Council chaired by Modi and Saudi crown prince Mohammad bin Salman was established during this visit. India and Saudi Arabia will have their first-ever joint naval exercise in December. An MoU on cooperation in defence production was also signed.

Talmiz Ahmad, former Indian ambassador to Saudi Arabia, Oman and the UAE, says, “The strategic dimension of the ties is important. India-Saudi ties have been institutionalised. A strategic platform for dialogue between the NSAs has been created. The relationship has moved from one dependent on energy sales.”

An MoU has even been signed concerning collaboration in military acquisition, industries, research, development and technology between Saudi General Authority of Military Industries (GAMI) and Department of Defence Production, Ministry of Defence.

Cooperation in civil aviation was also discussed and Saudi Arabia looks to increase business to its flag carrier Saudia.

Colby Connelly, research associate at the Arab Gulf States Institute in Washington, who works on the political economy of the GCC States, says, “The Indian civil aviation market is huge for Saudi Arabia’s efforts to make Saudia, its national carrier, profitable by 2020. Saudia’s acquisition of more than 60 new fuel-efficient Airbus A320 family aircraft will surely bolster its capability to compete in this market. Aside from the enormous amount of direct air traffic between the kingdom and India on a daily basis, Saudia may also seek to compete with Qatar Airways and UAE-based airlines as a transit point for journeys between India and North America.”

(The writer is a journalist who specialises in geopolitics of India’s neighbourhood and cyber security)