{"id":17609,"date":"2023-09-25T17:55:30","date_gmt":"2023-09-25T12:25:30","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/?p=17609"},"modified":"2025-07-18T12:39:30","modified_gmt":"2025-07-18T07:09:30","slug":"not-just-oil","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/25-09-2023\/not-just-oil","title":{"rendered":"Not Just Oil"},"content":{"rendered":"\n<p><strong>Syllabus: GS2\/ India &amp; Foreign Relations<\/strong><\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">In Context<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recently the state visit to India by the Crown Prince of Saudi Arabia, Muhammad bin Salman was concluded in conjunction with the G20 Summit in New Delhi.<\/li>\n<\/ul>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Recent MoUs &amp; Agreements<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>About:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The India-Saudi bilateral meet immediately after the G20 summit saw the <strong>conclusion of eight major MoUs <\/strong>involving vigilance, financial regulation and exim banks, desalination technology.<\/li>\n\n\n\n<li><strong>Several other minor understandings <\/strong>ranging from IT, petrochemicals, pharmaceuticals, new \u201cclean\u201d energy technology, manufacturing and defence were also concluded.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>India-Middle East-European Corridor:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Both the countries proposed a grand <strong>IMEC (India-Middle East-European Corridor)<\/strong>, creating a <strong>port-railroad connectivity<\/strong> to link <strong>India, the Gulf countries, and the European Union<\/strong> (in which India and Saudi Arabia are to be two nodal countries).<\/li>\n\n\n\n<li>The corridor is said to <strong>rival China\u2019s Belt-Road-Initiative<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>India-Saudi Arabia Strategic Partnership Council:&nbsp;<\/strong>\n<ul class=\"wp-block-list\">\n<li>Saudi\u2019s Crown Prince co-chaired with the Indian PM the first meeting of the India-Saudi Arabia Strategic Partnership Council.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Potential investments:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Both the countries reconfirmed Saudi intention of investing another $50 billion and setting up an office for the <strong>Saudi Sovereign Wealth Fund<\/strong> in <strong>Gujarat International Fin Tech-City<\/strong>.<\/li>\n\n\n\n<li>They also discussed the <strong>possibility of trading in local currencies<\/strong>, and expediting <strong>negotiations for a free trade agreement<\/strong> between India and the Gulf Cooperation Council of which Saudi Arabia is a member.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">India Saudi Arabia Relations<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Establishment:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The two countries established diplomatic relations in 1947.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Delhi Declaration &amp; Riyadh Declaration:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The royal visit of 2006 resulted in the signing of the Delhi Declaration, which was followed in 2010 by the Riyadh Declaration that elevated bilateral ties to a strategic partnership.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Highest civilian honour:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Prime Minister Modi\u2019s visit to Riyadh in April 2016 captured the spirit of enhanced cooperation in the political, economic, security, and defence realms.&nbsp;<\/li>\n\n\n\n<li>King Salman conferred on the Prime Minister the kingdom\u2019s highest civilian honour, the King Abdulaziz Sash, indicating the importance Saudi Arabia attached to its relationship with India.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The Strategic Partnership Council (SPC) Agreement:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>The Strategic Partnership Council (SPC) Agreement <\/strong>was signed during the 2019 visit of the Indian PM to Riyadh, which established a <strong>high-level council<\/strong> to steer the Indo-Saudi relationship.&nbsp;<\/li>\n\n\n\n<li>The SPC now has separate subcommittees on Political, Security, Social and Cultural Cooperation, and on Economy and Investments. Twelve pacts were signed during the PM\u2019s visit.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Economic Ties:<\/strong>\n<ul class=\"wp-block-list\">\n<li>India is Saudi Arabia\u2019s second-largest trade partner; Saudi Arabia is India\u2019s fourth-largest trade partner.\n<ul class=\"wp-block-list\">\n<li>Bilateral trade in FY 2022-23 was valued at $52.76 billion.&nbsp;<\/li>\n\n\n\n<li>Trade with Saudi Arabia accounted for 4.53% of India\u2019s total trade in FY23.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The bilateral trade has increased to more than US$52 billion in 2022-23, marking a growth of more than 23%.<\/li>\n\n\n\n<li>As of January 2022, there were <strong>2,783 Indian companies registered as joint ventures<\/strong>\/ 100% owned entities with investments worth approximately $2 billion in the kingdom.&nbsp;<\/li>\n\n\n\n<li><strong>Saudi\u2019s direct investments in India<\/strong> amounted to $3.15 billion (as of March 2022).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Energy Cooperation:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Saudi Arabia is a<strong> key partner for ensuring India\u2019s energy security<\/strong>, and was its third largest crude and petroleum products source for FY23.&nbsp;<\/li>\n\n\n\n<li>India imported 39.5 million metric tonnes (MMT) of <strong>crude <\/strong>from the country in FY23, amounting to 16.7% of India\u2019s total crude imports.<\/li>\n\n\n\n<li>India\u2019s <strong>LPG imports<\/strong> from Saudi Arabia stood at 7.85 MMT, and 11.2% of its <strong>total petroleum product imports<\/strong>, in FY 23.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Defence Partnership:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The defence partnership has witnessed tremendous growth in recent years.<\/li>\n\n\n\n<li>There is <strong>extensive naval cooperation<\/strong> between India and Saudi Arabia, and two editions of the bilateral naval exercise, <strong>Al Mohed al Hindi, <\/strong>have been concluded so far.&nbsp;<\/li>\n\n\n\n<li>Both sides also cooperate closely in the domain of <strong>defence industries <\/strong>and <strong>capacity-building<\/strong>.<\/li>\n\n\n\n<li>The Saudi navy was recently found taking exemplary measures for the <strong>safe extraction of Indian expatriates<\/strong> caught up in <strong>Port Sudan<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Indian diaspora in Saudi Arabia:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The Indian community in the kingdom is more than 2.4 million strong, widely respected for its contribution to the development of Saudi Arabia, and seen as a living bridge between the two countries.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Significance<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India-Middle East-Europe Economic Corridor:<\/strong>\n<ul class=\"wp-block-list\">\n<li>The prospective collaboration of both the countries on the new proposed port and railroad corridor of IMEC is <strong>likely to integrate<\/strong> the two countries in a way to the global supply chain that has not happened<strong> since the Portuguese discovery of the sea route to India <\/strong>in the 15th century.&nbsp;<\/li>\n\n\n\n<li>The India-Middle East-Europe Economic Corridor will <strong>deepen India\u2019s strategic engagement <\/strong>with the Arabian peninsula.&nbsp;<\/li>\n\n\n\n<li>It breaks Pakistan\u2019s veto over India\u2019s overland connectivity to the West.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Saudi Arabia\u2019s permanent membership of BRICS:<\/strong>\n<ul class=\"wp-block-list\">\n<li>India\u2019s support for the induction of Saudi Arabia as a permanent member of BRICS seems just the kind of game changer Saudi Arabia needs to materialise Muhammad bin Salman\u2019s vision of Saudi Arabia 2030, a post-oil economy.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Addressing India\u2019s energy security:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Saudi investment would provide India with a kind of foreign capital that may not be as susceptible to knee-jerk reactions as Western capital often has been. The issue of India\u2019s energy security will also be addressed in a big way.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Challenges<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Relations surrounding energy: <\/strong>The core element in Indo-Saudi relations continues to revolve around<strong> energy<\/strong>, especially Saudi export of crude oil.&nbsp;<\/li>\n\n\n\n<li><strong>Aid to Pakistan: <\/strong>India and Saudi Arabia have stressed the importance of strengthening security cooperation in the field of combating terrorism and its financing.\n<ul class=\"wp-block-list\">\n<li>Contrary to which, Riyadh still helps Pakistan with economic aid, even while strategically engaging with New Delhi.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Role of China: <\/strong>The country is also engaged with China, moving towards rapprochement with Iran and Israel, and is also now consolidating the Saudi partnership with the US, India, and Europe.\n<ul class=\"wp-block-list\">\n<li>Many have thus already described this engagement as a power shift, with China emerging as a significant player in the Middle East.<\/li>\n\n\n\n<li>Increasing Chinese influence in the Middle East may indirectly help Pakistan, both economically and strategically.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\">Way Ahead<\/span><\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If India\u2019s relations with any country have gained exponentially in momentum, it is the Kingdom of Saudi Arabia.&nbsp;<\/li>\n\n\n\n<li>The recent developments also provide a window of opportunity for India to embed itself as a significant player in the Middle East.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><span style=\"text-decoration: underline;\"><strong>Daily Mains Question<\/strong><br><\/span><strong>[Q]<\/strong> If India\u2019s relations with any country have gained exponentially in momentum, it is the Kingdom of Saudi Arabia. Enumerate outlining the significant elements in Indo-Saudi relations.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Syllabus: GS2\/ India &amp; Foreign Relations In Context Recent MoUs &amp; Agreements India Saudi Arabia Relations Significance Challenges Way Ahead Daily Mains Question[Q] If India\u2019s relations with any country have gained exponentially in momentum, it is the Kingdom of Saudi Arabia. Enumerate outlining the significant elements in Indo-Saudi relations.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-17609","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/17609","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=17609"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/17609\/revisions"}],"predecessor-version":[{"id":17610,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/17609\/revisions\/17610"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=17609"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=17609"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=17609"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}