India-Saudi Arabia Relations

January 6, 2012
Event: 
Fellows' Seminar

Chair: Ambassador (Retd) Ishrat Aziz
External Discussants: Professor Gulshan Dietl, Professor Qamar Agha
Internal Discussants: Dr Shebonti Ray Dadwal, Dr Meena Singh Roy

Dr Pradhan’s paper addresses India’s relations with Saudi Arabia, arguing that India must look beyond oil and trade in order to engage Saudi Arabia in a strategic partnership. This study also explores Indian interests in cultivating strategic ties with Saudi Arabia and explores the obstacles to building a partnership of this nature. In the past, India’s relations with Saudi Arabia have been impacted by the Cold War, regional political dynamics and divergent interests of both countries. India’s relations with Israel, the Kashmir issue and Indian support for Arab nationalist regimes in Egypt, Iraq and Syria are other aspects that have created misunderstandings between the two countries. The author sees a shift in Saudi Arabia’s foreign policy following the September 11, 2011 attacks as since then, it has been marked by an attempt to look beyond its traditional allies and to build closer relations with other countries, especially with major Asian powers such as India.

An important characteristic of the India-Saudi Arabia relationship is the dominance of trade and business. Saudi Arabia ranks as India’s fourth largest trading partner with a bilateral trade amounting to US$ 25.6 billion in 2010-11, dominated by crude oil imports. Joint ventures and investments form an important part of commercial relations. The Indian labour force in the Kingdom and Saudi Arabia’s petroleum reserves have constituted the most important part of the bilateral relationship.

Official visits by leaders of both countries have built on the existing partnership. The Delhi Declaration signed in 2006 aimed to strengthen ties in areas of energy, trade, science and technology, education, health, and political cooperation on regional and international issues. The 2010 Riyadh Declaration furthered on this agreement and focuses on enhancing cooperation on counterterrorism, money laundering, narcotics, arms and human trafficking, and defence and economic cooperation.

In forging strategic ties with Saudi Arabia, the author points out several advantages:

  1. Saudi Arabia’s growing regional profile: Saudi Arabia has been an important regional player in the Gulf and West Asia region owing to its huge petroleum reserves, the presence of the two holy mosques, and its growing military power among other factors. It has substantial influence on the regional politics, especially on the Israeli-Palestinian peace process, and has cultivated ties with major powers such as the US, Russia, China and the EU. Saudi Arabia has also emerged as an influential player in the ongoing Arab Spring. This increasing profile of the country is a call for India to engage further with Saudi Arabia in areas beyond bilateral trade an energy supply.
  2. Saudi Arabia as a gateway to the Arab and Islamic world: Saudi Arabia enjoys considerable clout in the Arab and Islamic worlds owing to the presence of the two holy mosques in Mecca and Medina. It also enjoys influence in organisations such as the Gulf Cooperation Council (GCC), the Arab League and the Organisation of Islamic Cooperation (OIC). The author notes that strengthening ties with Saudi Arabia will provide a unique platform for India to promote its interest and to enable greater access to other countries in the region.
  3. Defence cooperation: Although India and Saudi Arabia have not signed a defence cooperation agreement, both countries have conducted joint military exercises and are exploring enhanced military cooperation that includes training to Saudi Arabian forces on tackling terrorism in the mountainous areas bordering Yemen.
  4. India’s stakes in the security of the Gulf region: India sees the Gulf region as falling within its security parameter and has shown readiness to contribute to the security and stability of the region through sharing its own experiences in the areas of counter-terrorism, maritime security and military training.
  5. Cooperation against terrorism: Although both countries have been victims of terrorism in the past, Saudi Arabia has faced questions over its alleged funding of religious extremists and the spread of the Sunni Wahhabi brand of Islam. India has indicated its concern on this issue. Following the 9/11 attacks, Saudi Arabia has taken steps to check the flow of money and disrupting terrorist networks. It has condemned extremism and has been preaching moderation including through religious leaders. Strengthening India’s relations with Saudi Arabia will allow new avenues for India to manage relations within its own neighbourhood and also contribute to the security of the Gulf region.
  6. Fighting piracy: Piracy in the Gulf of Aden and surrounding regions remains a threat to Sea Lines of Communication and thus to the security of the transshipment of goods. Deepening the Indian Navy’s cooperation with its Saudi counterpart will contribute significantly to the fight against piracy.
  7. Energy security: India ranks as the fourth largest oil consuming country in the world after the US, China and Japan. Securing long term energy supplies has been a dominant objective for India in the Gulf region. Saudi Arabia is currently the largest supplier of crude oil to India. With particular reference to the ‘Strategic Petroleum Reserve’, India needs to move beyond mere commodity trade and engage with Saudi Arabia through energy interdependence.
  8. Soft power diplomacy: The author notes that the approximately two million strong Indian diaspora in Saudi Arabia have acted as a medium through which the Saudis have shaped their perception of India and its people. The Delhi Declaration of 2006 has aimed to promote exchange of faculty, students and delegations, and encourage direct scientific and educational communications between institutions. India has also recently pledged to assist Saudi Arabia in setting up an ICT Centre of Excellence, as well as institutions of higher learning. India needs to build on portraying itself as a major education hub in Asia that can provide quality education.

In building his study, the author looks at both sides of the coin. Saudi Arabia’s perceptions of India have undergone changes following the end of the Cold War and the emergence of India as a stable democracy. Its shift in focus to major Asian countries following 9/11 has aimed at broadening its engagement particularly with India, China and Japan. The author notes that Saudi Arabia’s ‘Look East’ policy would give it the two distinct advantages of exploring new markets for oil and trade, and diversifying its diplomatic engagement with the world. However, Saudi Arabia does harbor certain concerns with respect to India’s engagements in the West Asian region, particularly with reference to India’s defence cooperation with Iran, and the supply of arms to India from Israel. These two concerns also pose challenges to furthering India’s interests in the region.

The Pakistan factor has also been an important element of the India-Saudi Arabia relationship. The author observes that India’s undue emphasis on the religious factor (that it attributed to close Saudi-Pakistani ties) made it view Saudi Arabia as a ‘lost cause’ for a long period of time. In spite of this, India’s deepening engagements with Saudi Arabia over the recent past has resulted in building a stronger bilateral relationship. The author also points out that Pakistan’s influence over Saudi Arabia in hindering a stronger Indo-Saudi relationship will have more diminished impact than in the past.

The study concludes by saying that it is imperative for both countries to move beyond ‘buyer-seller relations’. The recent high level visits and agreements are an indication of deepened trust building that will be essential for a long term strategic partnership. The author emphasises the need for both countries to engage with mutual cooperation in multiple fronts of engagement, with India taking the lead in engaging with Saudi Arabia, especially in this opportune time when India is looking west and Saudi Arabia is looking east. This will help translate the existing economic ties into a strong strategic partnership.

Major Points of Discussion and Suggestions to the author:

  • There is a need to explore the use of the term ‘strategic partnership’ to define India-Saudi Arabia relations as they currently exist. A number of panelists disagreed on the assumption that such a partnership already exists between the two countries. Also, it was observed that this may not be the right time to deepen ties with countries in the region, taking into account the unforeseen consequences of the ongoing Arab Spring.
  • A discussant suggested deeper exploration of the benefits of a strengthened strategic partnership for both India and Saudi Arabia and the impacts of this on regional actors in India’s neighbourhood, such as China and Pakistan; the balancing acts that both countries have to manage (for the Saudis, between India and Pakistan, and for the Indians, between Saudi Arabia and Iran).
  • It was suggested that the study also explore the problems relating to succession in the Kingdom. King Abdullah has played a fine balancing act between the Islamists and the liberals in the country and it is uncertain if another future ruler will be able to do the same.
  • It was noted that India must strive to engage with countries in the region in such a manner that developments such as the Arab Spring do not impact the fundamental basis of its relations with those countries. People-to-people relations need to be consolidated so that bilateral relations are not overly influenced by regime changes.
  • The discussion also focused on Saudi Arabia’s strong military and religious ties with Pakistan, and its varied and continuing engagement with the Taliban in Afghanistan. One of the panelists stressed the significance of self-interests in the forging of bilateral relations. In the context of India-Saudi Arabia relations, both sides have much to gain from economic and defence cooperation.
  • Panelists affirmed that despite recent shifts, the bilateral relationship would remain dominated by economic factors, with energy trade being the most important element of this.

Report prepared by Princy Marin George, Research Assistant, West Asia and Africa Cluster, IDSA