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Picture Courtesy: pmIndia

Context:

The visit of Indian Prime Minister Narendra Modi to Saudi Arabia, marked a significant milestone in the deepening of the India-Saudi Arabia Strategic Partnership.

Key Highlights of the Visit

Strategic Partnership Council (SPC)

The second SPC meeting reviewed progress since 2023 and expanded the council to include four ministerial committees:

Political, Security, Social, and Cultural Cooperation
Economy and Investments
Defence Cooperation (newly added)
Tourism and Cultural Cooperation (newly added)

Economic and Investment Ties

Significant progress was made under the High-Level Task Force (HLTF) to promote investments in energy, petrochemicals, infrastructure, and technology. Agreements were reached for two refineries, and the India Desk at Saudi Arabia’s Public Investment Fund (PIF) was launched.

Defense and Security

The creation of a Ministerial Committee on Defence Cooperation and joint military exercises like SADA TANSEEQ and AL MOHED AL HINDI highlight deepening defense ties.

Energy Cooperation

Both nations committed to stabilizing global oil markets, enhancing renewable energy projects, and collaborating on green hydrogen and energy storage technologies.

Counter-Terrorism

Both leaders condemned the terror attack in Pahalgam, Jammu and Kashmir, and reaffirmed their commitment to combating terrorism and terror financing.

Cultural and People-to-People Ties

The visit highlighted the welfare of 2.7 million Indian nationals in Saudi Arabia and enhanced cultural cooperation through a new Ministerial Committee on Tourism and Cultural Cooperation.

MoUs Signed

Four MoUs were signed, covering space activities, health, postal services, and anti-doping cooperation.

Space Cooperation: Between Department of Space (India) and Saudi Space Agency
Health Cooperation: Between Health Ministries of both countries
Postal Cooperation: Bilateral agreement on foreign surface parcels
Anti-Doping: Between National Anti-Doping Agency of India and Saudi Anti-Doping Committee

Energy and Economic Cooperation

India ranks as Saudi Arabia’s second-largest trading partner, while Saudi Arabia is India’s fifth-largest. In 2023–24, their two-way trade reached USD 42.98 billion, with India exporting USD 11.56 billion (think pharmaceuticals, textiles, and machinery) and importing USD 31.42 billion (mostly oil and petroleum). Indian companies have invested USD 3 billion in Saudi Arabia, focusing on IT, telecom, and construction.

Saudi Arabia ranks 20th in foreign direct investment (FDI) in India, contributing USD 3.22 billion from 2000 to 2024. The proposed Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) could further boost economic ties.

Saudi Arabia supplies 14.3% of India’s crude oil (third-largest source) and 18.2% of India’s LPG (third-largest supplier) in 2023–24. Beyond oil, both nations explore renewable energy partnerships, aligning with Saudi Arabia’s Vision 2030 diversification goals.

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Source:

MEA

PRACTICE QUESTION

Q. With the launch of initiatives like the India-Middle East-Europe Corridor (IMEC), how can India leverage its economic ties with Saudi Arabia to enhance regional connectivity? 150 words