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India-Saudi Arabia Relations: Challenges

The arrival of Crown Prince Mohammed bin Salman in India from September 9th to 11th, 2023 was a significant event, highlighting his important role in shaping the partnership between India and Saudi Arabia. During his visit to New Delhi, the announcement of the India-Middle East-Europe Economic Corridor not only showcased a major infrastructure project but also presented a formidable challenge to China's Belt and Road Initiative.

The extensive state visit and the inaugural meeting of the India-Saudi Arabia Strategic Partnership Council further strengthened the importance of this relationship, reinforcing cooperation in economic, energy, and defence sectors through vital agreements.

The deep roots of diplomatic relations, which can be traced back to 1947, were emphasized by important events like the Delhi Declaration in 2006 and the elevation to a strategic partnership through the Riyadh Declaration in 2010. Prime Minister Modi's visit in 2016, characterized by the bestowal of Saudi Arabia's most prestigious civilian award, further enriched the long-lasting social, cultural, and economic ties between these two countries.

Economic Relations:
Saudi Arabia holds the position of being India's fourth largest trading partner, falling behind the United States, China, and the United Arab Emirates. With a mutual ambition to evolve their conventional buyer-seller dynamic into a more profound strategic alliance, both India and Saudi Arabia aspire to achieve this transformation. Given that India relies on imports for approximately 80 percent of its energy requirements, it is worth noting that nearly a fifth of this energy comes specifically from Saudi Arabia. Noteworthy is also the fact that Saudi Arabia maintains its status as India's primary supplier of crude oil.

During the fiscal year 2022�23, there was a noteworthy economic collaboration between India and Saudi Arabia. Their bilateral trade value amounted to a staggering $52.76 billion, accounting for around 4.53% of India's overall trade during that period. This remarkable figure served as a testament to the significance of Saudi Arabia as a key trade partner, emphasizing the extensive nature of their economic involvement.

Moreover, Indian companies have actively invested in Saudi Arabia, establishing a total of 2,783 joint ventures or wholly-owned entities with an estimated value of approximately $2 billion. This robust presence includes prominent corporations such as L&T, Tata, Wipro, TCS, TCIL, and Shapoorji Pallonji, thus contributing significantly to the intricate economic fabric of the Saudi market.

In return, Saudi Arabia has made significant contributions in different areas in India. Prominent Saudi investors like Aramco, SABIC, Zamil, e-holidays, and the Al Batterjee Group have collectively poured a substantial amount of $3.15 billion into various ventures as of March 2022.

The Saudi Public Investment Fund (PIF) has played a crucial role in solidifying economic bonds by strategically investing in Indian startups and major businesses. It is worth mentioning that the PIF holds a noteworthy stake in Reliance Industries' Jio Platforms and Reliance Retail Ventures Ltd., further cementing their involvement in India's economic landscape.

Moreover, the recently suggested West Coast Refinery and Petrochemicals Project in Maharashtra, which entails a partnership between Saudi Aramco, Abu Dhabi National Oil Company, and an Indian consortium, serves as a prime example of the significant financial commitments made by both countries.

The energy industry continues to be an essential connection, given that Saudi Arabia ranks as India's third-most important supplier of crude oil and petroleum goods. This further emphasizes the crucial nature of their collaborative efforts in the energy sector.

Defence Partnership:
In December 2020, an important step forward in strengthening the defence ties between India and Saudi Arabia took place. This momentous occasion was marked by the visit of General Manoj Mukund Naravane, who at that time served as the Chief of the Indian Army, to Saudi Arabia. The purpose of this visit was to showcase the dedication of both nations to enhancing their cooperation in defence matters, reflecting a shared concern for regional security.

The naval sector witnessed a significant milestone during this visit with the introduction of the bilateral naval exercise named Al Mohed al Hindi. This exercise was conducted successfully in two editions, serving to solidify the partnership between these countries in maritime affairs.

Furthermore, a joint statement was issued during Crown Prince Mohammed bin Salman's visit, which emphasized a deepening of defence cooperation. This statement expressed a mutual interest in exploring opportunities for collaborative development and production of defence equipment, highlighting a commitment to each other's strategic interests.

Indians in Saudi Arabia:
The Indian diaspora in Saudi Arabia is made up of over 2.4 million people and serves as an important connection between the two countries. Not only are they a significant part of Saudi society, but they also actively contribute to the nation's growth and development. They work in different fields like construction, healthcare, education, and services, bringing their skills and hard work to help the kingdom progress.

The close relationship between India and Saudi Arabia is brought to attention through official statements and diplomatic exchanges, recognizing Saudi Arabia's dedication to the well-being of the Indian community abroad. This dedication was demonstrated in crucial times, like when they offered assistance in evacuating stranded Indian citizens from Sudan via Jeddah as part of Operation Kaveri. This act showcased the harmonious cooperation and compassionate approach shared by both nations.

Facilitating Religious Pilgrimage:
Saudi Arabia holds a significant position in helping Indian citizens embark on religious pilgrimages, specifically for Hajj and Umrah. The kingdom's assistance emphasizes its dedication to guaranteeing a seamless and deeply meaningful voyage for Indian Muslims. This aspect of the two nations' relationship highlights the cultural and religious connections that unite India and Saudi Arabia, promoting shared comprehension and collaboration in matters concerning faith and pilgrimage.

Challenges in Relations:
Dependency on Energy:
India's energy security is closely connected to Saudi Arabia, relying heavily on the latter for its oil supply. If there are any disruptions or changes in Saudi Arabia's oil policies, it could seriously jeopardize India's energy stability, emphasizing the crucial nature of this dependence. India's substantial reliance on oil imports from Saudi Arabia can make it economically vulnerable to the fluctuations in oil prices.

Regional Dynamics:
India's diplomatic relations with countries like Iran, Yemen, and Pakistan in the Middle East add a level of intricacy to its interactions with Saudi Arabia. These relationships have the potential to influence India's position in the constantly changing geopolitical landscape of the region.

The politics of the Middle East are intricate and multi-faceted. One aspect of this complexity is the rivalry between Saudi Arabia and Turkey, while another dimension involves the rivalry between Saudi Arabia and Iran. India maintains strong diplomatic connections with both Saudi Arabia and Iran. Nevertheless, India is still in the process of strategizing how to effectively manage its relationships with Iran, on one side, while simultaneously maintaining its ties with Saudi Arabia and the United States on the other.

Economic Factors:
Over time, even though there has been a considerable amount of trade and a substantial Indian expatriate population residing in the Gulf region, the level of investments between India and the Gulf monarchies has remained quite low. However, both countries are putting in efforts to tackle this economic hurdle, as they acknowledge the unexplored possibilities for investments that can prove advantageous for both parties involved.

Diversification of Trade:
Both countries, beyond energy, such as in technology, defence and infrastructure, need to work on diversifying their trade.

Immigration & Labor:
The welfare and working conditions of Indian expatriates in Saudi Arabia could potentially have an impact on relations between the two nations.

Security Challenges:
When it comes to security partnerships, India is careful in its dealings with Gulf states that have longstanding connections with Pakistan's security establishments. This thoughtful approach demonstrates India's understanding of the potential difficulties and sensitivities involved in the security realm within the Gulf region.

Cooperation in Countering Terrorism:
Challenges can arise when aligning strategies and priorities to combat terrorism and extremist ideologies.

Strategic Competition:
The increasing presence and influence of China in the Gulf region directly challenge India. The Belt and Road Initiative, which emphasizes the construction of ports and infrastructure projects in the Gulf, emerges as a factor that could affect India's strategic interests in the region. The ongoing strategic competition highlights the importance for India to carefully navigate its diplomatic and economic approach in the Gulf.

Communal Strife:
The conflicts between different communities in India can have a variety of effects on its relations with Saudi Arabia. Being an important player in the Muslim world, Saudi Arabia pays close attention to any developments related to religious unity. If communal tensions in India worsen, it could lead to diplomatic issues and impact the economic connections between the two countries, especially in the energy industry. The political aspects of such conflicts may also come into play and potentially influence India's position in the Middle East.

Additionally, as a guardian of Islam's most sacred places, Saudi Arabia may express concerns regarding humanitarian matters. India holds a notable number of its citizens living in Saudi Arabia, which we refer to as the expatriate population. In the event of communal tensions arising within India, there is a possibility that these tensions might reverberate within the expatriate community. Such occurrences have the potential to impact social unity and how different communities engage with one another.

Consequently, this could create a ripple effect on interpersonal relationships and cultural exchanges. Therefore, it becomes crucial to effectively manage and address these communal tensions within India not only for maintaining internal stability but also for upholding the strength of its global connections, including those with Saudi Arabia.

On the 23 January 2024, the Organisation of Islamic Cooperation (OIC), which includes Saudi Arabia as a member, reportedly shared its grave concerns about the recent building and opening of the "Ram Temple" at the location where the Babri Mosque once stood in Ayodhya. The OIC's General Secretariat expressed their strong position on this matter, expressing great distress over the measures taken to establish the "Ram Temple" and condemning the destruction of the "significant Islamic symbol embodied by the historic Babri Mosque".

Cultural & Religious Differences:
Mutual understanding and cooperation can sometimes be impacted due to the diverse cultural and religious norms.

Nitaqat Programme:
The Nitaqat Programme was implemented by the Saudi Arabian government to promote job opportunities for Saudi citizens and reduce unemployment rates among them.

The presence of a large number of Indian individuals working in Saudi Arabia has sparked a misunderstanding between the two countries over the Nitaqat program. This program, which was introduced by Saudi Arabia in 2011, has become a major source of disagreement in the bilateral relationship with India, mainly because of the substantial number of Indian workers employed in the Kingdom.

The primary objective of this program is to enhance the employment prospects for Saudi citizens in the private sector by implementing quotas and providing incentives for businesses to hire local residents. On the other hand, the substantial community of Indian expatriates, who play a vital role in the Saudi workforce, has expressed worries regarding the possible consequences for the job opportunities and rights of Indian workers.

The introduction of Nitaqat has sparked conversations between the two nations to tackle these concerns and discover a fair solution that aligns with the goals of the Saudi government while also protecting the welfare and interests of the Indian workforce.

To navigate this particular aspect of the relationship between India and Saudi Arabia, it is essential to possess diplomatic finesse in order to strike a delicate balance between the policy objectives of the host nation and the rights and livelihoods of Indian expatriates.

Open dialogue must be initiated by both countries in order to gain a deeper understanding of each other's perspectives, explore potential areas for collaboration, and establish mechanisms that ensure fair treatment and protection for Indian workers in light of the Nitaqat program.

It is imperative to find common ground when addressing the socio-economic implications of such policies, as this will contribute to fostering a harmonious relationship that takes into account the interests of both nations and their respective populations.

To overcome these challenges, it is essential for both the countries to have honest and open conversations, show respect towards each other, and be willing to find common solutions that can benefit both nations along with keeping communal strife under check and control. The partnership between India and Saudi Arabia has the potential to grow even stronger, driven by economic, energy, defence, and cultural connections. As Crown Prince Mohammed bin Salman leads on the international platform, India is actively working towards strengthening this practical alliance in order to achieve mutual advantages and maintain stability in the region.

The potential for a bright future in the relations between Saudi Arabia and India is evident, as their diplomatic, economic, and strategic connections continue to grow stronger. Both countries have come to realize the advantages that come with collaboration, particularly in areas such as energy, trade, and defence. The Vision 2030 economic reform plan of Saudi Arabia is closely aligned with India's development goals, creating opportunities for investment and partnership.

Moreover, a shared concern for regional stability, counter-terrorism efforts, and cultural exchanges adds depth to this multifaceted relationship. The ongoing cooperation between these two nations is expected to have a positive impact on the geopolitical landscape, fostering stability and prosperity in both the Middle East and South Asia.

Written By: Md.Imran Wahab, IPS, IGP, Provisioning, West Bengal
Email: [email protected], Ph no: 9836576565

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