UPSC MAINS 2019: India–Saudi Arabia relations

India–Saudi Arabia relations

 

Topic: India–Saudi Arabia relations

Topic in Syllabus: General Studies Paper 2: International Affairs

 

India–Saudi Arabia relations

Context:

The Saudi Crown Prince, Muhammad bin Salman, made a visit to India during his journey to many Asian countries in February, 2019. The crown prince met the Indian prime minister as well as a number of high officials in India.

 

More about on news:

  • The main aim of the visit is to improve the historical ties between the two countries.
  • The two sides agreed on increasing trade relations between them.
  • Moreover, the number of Indian pilgrims performing Hajj in Saudi Arabia has been increased to 200,000 every year.
  • The Saudi prince expected that the Saudi investment in India may reach $100 billion in the next two years.

 

Key highlights about visit:

  • India and Saudi Arabia held a bilateral meeting on the sidelines of the visit of Saudi Arabia’s Crown Prince Mohammed bin Salman to India
  • Farming that extremism and terrorism threaten all nations, India and Saudi Arabia rejected any attempt to link this universal phenomenon to a particular race, religion or culture.
  • Without naming Pakistan the joint statement said that nations should renounce the use of terrorism as an instrument of state policy.
  • Constitution of a ‘comprehensive security dialogue’ at the level of national security advisor and setting up of a joint working group on counter-terrorism.
  • Saudi Arabia reiterated its commitment to meeting India’s growing needs for crude oil and petroleum products and substitute for any shortages that may arise as a result of disruptions from other sources without naming Iran.
  • Saudi Arabia also increased India’s Haj quota by about 25,000. India’s Haj quota now stands at 2 lakh. Saudi Arabia’s Crown Prince Mohammed bin Salman stated that Saudi Arabia has already invested $44 billion in India since the PM’s visit in 2016 and they see an investment opportunity of worth $100 billion in sectors like energy, petrochemicals and manufacturing.

 

Introduction about relations:

  • India and Saudi Arabia enjoy cordial and friendly relations reflecting the centuries old economic and socio-cultural ties. The establishment of diplomatic relations in 1947 was followed by high-level visits from both sides.
  • King Saud visited India in 1955 and the Prime Minister Jawaharlal Nehru visited the Kingdom in 1956.
  • The visit of the Prime Minister Indira Gandhi to Saudi Arabia in 1982 further boosted the bilateral relations.
  • In the recent times, the historic visit of King Abdullah to India in 2006 resulted in signing of ‘Delhi Declaration’ imparting a fresh momentum to the bilateral relationship.
  • The visit provided the framework for cooperation in all fields of mutual interest.
  • The reciprocal visit by Prime Minister Dr. Manmohan Singh to Saudi Arabia in 2010 raised the level of bilateral engagement to ‘Strategic Partnership’ and the ‘Riyadh Declaration’ signed during the visit captured the spirit of enhanced cooperation in political, economic, security and defence realms.
  • The visit of the then Crown Prince, His Royal Highness Prince Salman Bin Abdulaziz Al-Saud, Deputy Prime Minister and Minister of Defence of the Kingdom of Saudi Arabia (now King) to India in 2014 has further deepened the relations between our two countries.

 

History:

  • Trade and cultural links between ancient India and Arabia date back to the third millennium BC.
  • By 1000 AD, the trade relations between southern India and Arabia flourished and became the backbone of the Arabian economy.
  • Arab traders held a monopoly over the spice trade between India and Europe until the rise of European imperialist empires.
  • India was one of the first nations to establish ties with the Third Saudi State.
  • During the 1930s, India heavily funded Nejd through financial subsidies.

 

Recent developments:

  • Crown Prince of Abu Dhabi Sheikh Mohamed bin Zayed Al Nahyan was the Chief Guest of 2017 Republic Day of India.
  • India was designated as the Guest of Honour country at Abu Dhabi Music and Art festival 2018.
  • India and UAE signed an MOU for cooperation in Africa.
  • India UAE had their first bilateral Naval exercise in March 2018 named ‘Gulf Star 1’, which took place off the coast of Abu Dhabi.
  • India UAE signed a currency swap agreement in December last year which will boast trade and economic relationship between two countries and reduce India’s dependence on US Dollar.
  • Abu Dhabi National Oil Company (ADNOC) has signed agreement to explore storing Crude oil in Indian Strategic Reserve in Padur.
  • ADNOC also filled up 1.5 million tonnes of crude oil in Mangalore strategic reserve, the only foreign and private player so far to have invested in storing in Indian strategic reserve.
  • Abu Dhabi government allotted land for construction of first Hindu Temple in Abu Dhabi. There are two Hindu temples in UAE, both in Dubai.
  • UAE and India signed an MOU in field of manpower exploring the possibility of linking their respective e-platforms for the benefit and welfare of Indian workers going to UAE.
  • India and UAE is fast-tracking food corridor. This will entail investment by UAE in Indian agriculture sector benefitting farmers and creating additional jobs in food processing logistics etc. It will also help in food security for UAE.
  • The UAE is one of the biggest overseas markets for Indian cinema apart from the UK and USA.

 

Pakistan-Saudi Relations:

  • Both Saudi Arabia and the UAE will not go too far with India against Pakistan. It is not just religion alone. Elite families in both countries share familial and other social connections in Pakistan.
  • There have been reports that MBS is interested in Saudi Arabia getting its own nuclear deterrent. If that is the case, then Pakistan is the most logical source for technical expertise.
  • Saudi Arabia always played an important role to strengthen the economy of Pakistan. The Saudi royal said his country would collaborate with Pakistan economically, politically and in terms of security.
  • Pakistan and Saudi Arabia enjoy historic relations and these ties are very strong on the diplomatic level.
  • Saudi Arabia has strategic interests in Pakistan given its proximity to Iran, Riyadh’s archrival in the region. The Saudis are using aid packages and investment promises to buy the economically embattled Pakistani government’s loyalty and convince it to turn a blind eye to their destructive actions within Pakistan’s borders.
  • Not only has Saudi Arabia helped Pakistan avoid major economic crises, but it has also supported Pakistan’s defense by providing logistic support and financial assistance.

 

Significance of UAE for India:

  • UAE is geographically located at Strait of Hormuz. This is world’s most important oil artery and strategically important for India’s energy security.
  • Over 3 million Indians live in UAE. This is the biggest Indian Diaspora anywhere in the world. They contribute to Indian economy through large remittances.
  • Safety of Indians is priority of Indian government for which it needs support of UAE government.
  • UAE has one of the largest Sovereign Fund in the World. UAE wish to invest fund in India particularly in National Infrastructure and Investment fund (NIIF). India needs fund for its infrastructure sector.
  • India needs UAE to contain Terrorism and Radicalization. UAE is influential nation in Middle East and Muslim World. Of the 24 extraditions from Middle East in last few years, 18 had been from UAE and Saudi Arabia.
  • With US sanctions on Iran, India needs to import crude oil from other sources to meet its energy need. UAE and Saudi Arabia have offered India with additional crude oil supplies to meet India’s growing needs.
  • UAE has a substantial influence over Pakistan. It deposited 3 billion USD in account of Pakistan’s central bank. India can use this influence to bring Pakistan to negotiating table for talks on terrorism and bilateral relations.

 

Importance of India to Saudi Arabia:

  • Enhanced ties with India is important for Saudi Arabia as well. The kingdom is facing economic strain in the wake of persistently weak oil prices.
  • The U.S. is no longer as dependent on the region for energy as it used to be, thanks to the shale boom.
  • Demand from China is also receding in the wake of a slowdown. Besides, competition in the oil market is expected to tighten with a sanctions-free Iran entering the global economic mainstream without any bars.
  • In this context, India is a vital market for Saudi Arabia. There is believed to be friction between Islamabad and Riyadh over the former warming up to Tehran and their growing energy cooperation.
  • Pakistan also refused to join Saudi Arabia’s war coalition that has been bombing Yemen for the past one year in the name of fighting the Iran-backed Shia rebels.

 

Way forward:

  • With India’s growing economic, political and strategic interests, it cannot stay aloof for long with current geopolitical environment in Middle East, whether it is war in Yemen to strained ties of UAE and others with Qatar and Iran. India will have to engage more vigorously with developments in the region.
  • Any kind of extended crisis in region will not just affect India’s energy security but also create insecurity among large Indian Diasporas. This has to be a priority for India’s foreign policy makers.
  • Indian Diasporas has been an important driver of UAE’s economy, from labour force to investments. India should use them as soft power for furthering Indian interests.
  • India UAE relationships are indeed going through golden phase but the former needs to maintain an incremental approach in furthering the interest of both. Short-term and long-term interest should form a proper mix in this approach.

 

Sample Question:

Examine Why the Saudi Crown Prince’s Visit to India Was a Diplomatic Success? Discuss the Saudi Arabia’s Balancing Act in South Asia Continues.


India–Saudi Arabia relations Info graphics