Saudi Arabia and India signed a dozen agreements during Indian Prime Minister Narendra Modi’s visit to Riyadh at the end of October. But Saudi-Indian ties are not strictly bilateral; they involve the interplay of other countries – traditionally, Pakistan and Iran, and more recently, China and the United States.
The kingdom’s “Look East” policy began at the turn of the century due to a combination of factors, including the Asian economic boom and the events of 9/11. These partly conditioned King Abdullah bin Abdulaziz’s historic visit to New Delhi in 2006 – the first by a Saudi king to India since 1955 and the first high-level engagement since Prime Minister Indira Gandhi visited Saudi Arabia in 1982.
India also adopted a “proximate neighborhood” policy about the same time as Saudi Arabia looked east. Until 2001, Saudi-Indian ties were complicated by their respective relationships with Pakistan. While partition fostered Indian-Pakistani tension, religion encouraged Saudi-Pakistani affinity. These differences were partly bridged following Foreign Minister Jaswant Singh’s visit to the kingdom in 2001. Riyadh then deemed the Indian-Pakistani row over Kashmir as bilateral, thus aligning with New Delhi’s formulation that it did not require third-party mediation.
In a shift from Riyadh’s religious ideology-based approach toward India, two examples are noteworthy. First, Saudi Arabia led the Gulf Cooperation Council to sign the 2004 Framework Agreement on Economic Cooperation, which offered India the same status as its South Asian neighbor, effectively delinking ties to India from their relationship with Pakistan.
Second, ahead of the 2006 visit, India suggested that it would draw up a list of eminent Muslims who could meet King Abdullah in New Delhi. But Riyadh pointed out that the king would be interested in meeting a group of eminent Indians, not just Muslims, which resonated well in New Delhi. In fact, King Abdullah famously said then: “I consider myself to be in a second home.”
These changes contributed to the shaping of the first intergovernmental document, the Delhi Declaration, which was signed by King Abdullah himself. Both countries then agreed to go beyond the strengthening of economic and political ties envisaged in the 2006 agreement. A “new era of strategic partnership” was enshrined in the Riyadh Declaration signed during Prime Minister Manmohan Singh’s visit in 2010.
Since then Modi visited Riyadh in 2016 and 2019 and Saudi Crown Prince Mohammed bin Salman was in New Delhi earlier this year. These high-level visits have intensified bilateral relations, without other external factors playing spoilsport.
Recognizing India’s economic potential and the energy required to power this growth, Saudi Aramco and the Abu Dhabi National Oil Company committed to a 50% investment in a $44 billion refinery in western India. Indian public sector oil firms are pitching in with the remaining capital, making it the single largest overseas investment in India. Earlier this year Aramco agreed to acquire a 20% stake in the $75 billion oil-to-chemicals business of the Indian private company Reliance.
With bilateral trade at $27.5 billion in 2017-18, Saudi Arabia is among India’s top five trade partners and among the top two energy suppliers, alongside Iraq. In early 2019, Saudi Arabia expressed interest in investing $100 billion in India’s energy, refining, petrochemical, and infrastructure sectors. Some of the recent deals could fall in this basket of investments.
Discussions are currently under way to cooperate in other sectors, including agriculture, innovative technology, renewable energy, and defense equipment. In fact, India is one of eight countries designated as strategic partners for the kingdom’s Vision 2030, along with China, the United Kingdom, the United States, France, Germany, South Korea, and Japan.
The deals signed on the sidelines of the October Future Investment Initiative conference in Riyadh include the oil and gas, defense, and civil aviation sectors. Most important, a Strategic Partnership Council, supervised by Mohammed bin Salman and Modi, was established. The council is designed to have two parallel tracks – one on political issues, security, culture, and society led by the two countries’ foreign ministers and another on economy and investments supervised by the Indian commerce minister and Saudi energy minister. India is the fourth country after the United Kingdom, France, and China to sign such an agreement with Saudi Arabia.
Another agreement sets the stage for the first Saudi-Indian naval exercises to begin in March 2020. These exercises may take place near the Saudi coast to encourage the Indian navy to showcase its strength and test interoperability with the navies of many countries located from the Strait of Hormuz to the Strait of Malacca. This is in line with the October 29 joint statement following Modi’s visit that highlighted the “importance of bilateral engagement to promote ways to ensure the security and safety of waterways in the Indian Ocean region and the Gulf region from the threats and dangers that may affect the interests of the two countries.”
The Indian navy has been conducting anti-piracy operations in the Gulf of Aden since 2008 and briefly deployed warships in the Gulf to escort Indian vessels when U.S.-Iranian tensions soared this summer.
On the counterterrorism front, the kingdom has extradited and helped India arrest several key suspects, including one involved in the 2008 Mumbai attacks.
While energy, trade, and expatriates provide the basis for Saudi-Indian bilateral ties, they also offer a framework for the two countries to pursue “strategic” engagement in their respective conflict-prone regions – South Asia and the Middle East. It is here that the interplay of other countries – primarily Pakistan and Iran – assumes importance. Without naming the countries, Modi said: “India and Saudi Arabia share similar security concerns in their neighborhood.”
Islamabad’s stance against joining the Saudi-led war in Yemen in 2015 and reluctantly joining the 34-country Islamic coalition against terrorism created a wedge in Saudi-Pakistani ties. But their relationship continues. While then-Saudi Foreign Minister Adel al-Jubeir said in 2016 that the kingdom’s “relations with Pakistan do not come at the expense of [its] relations with India” he also stated that strengthening of Saudi ties with India will not result in compromising its relations with Pakistan, “a historic ally.”
This nuanced approach is evident with Saudi Arabia, unlike Malaysia and Turkey, remaining neutral following India’s revocation of Article 370 of its constitution, thus integrating Kashmir with the rest of the country.
Next is Iran. Despite U.S.-Iranian and Saudi-Iranian tension, New Delhi continues to engage with Tehran. India considers Iran as a part of its “proximate neighborhood.” India’s large Muslim population of about 180 million also means that its Shia population is among the largest in world. Yet, Tehran has not played a destabilizing role in India similar to what it is accused of in the Middle East.
Strategically, with Pakistan denying India access to Afghanistan, Iran is the window not only to Afghanistan, but to Central Asia too. Further, India received about 15% of its oil supply from Iran prior to the reimposition of U.S. sanctions. Realizing that Iran’s nuclear program could destabilize the Middle East, India has even endorsed the Arab call for a nuclear weapons-free Middle East.
Two other countries may influence Saudi-Indian strategic cooperation in the future. One is the United States, which signed a Strategic Energy Partnership with India in 2018, thus becoming a potential competitor with the kingdom. Another cause for concern is growing Chinese engagement on either side of the Gulf. Given the complex relationship that India and China share in an environment where these two countries, the United States, and the Gulf countries are not always on the same page, there is always the danger of the Gulf region being drawn into geostrategic competition in the future.
But as Gulf-India ties move from transaction based to strategic engagement, Saudi Arabia and India will have to find ways in their foreign policies to protect their interests by balancing cooperation and competition with all the countries concerned.