India-Saudi Arabia Relations: Convergences & Divergences

Table of contents

At the invitation of Crown Prince Mohammed bin Salman, PM Modi’s recent visit to Saudi Arabia marked a turning point in bilateral ties, reflecting the momentum built since the establishment of the Strategic Partnership Council (SPC) in 2019. This visit reinforced India’s West Asia outreach under the “Think West” policy and aligned with Saudi Arabia’s Vision 2030 for economic diversification.

PM’s Saudi Arabia Visit: Key Outcomes

MOUs Signed Between India and Saudi Arabia

Sector	Details
Energy Cooperation	Strengthened ties in oil exploration, green hydrogen production, and renewable energy R&D, aligning with India’s energy transition goals.
Digital Infrastructure	Joint development of digital public platforms (E.g., UPI, Aadhaar-like IDs); co-innovation in AI, blockchain, and emerging technologies.
Strategic Investments	Saudi Arabia’s Public Investment Fund (PIF) to finance key Indian sectors, including logistics, infrastructure, and the IMEC trade corridor.
Pharmaceutical Trade	Faster regulatory approvals for Indian medicines; collaboration on resilient pharma supply chains and biotech innovation.
Fintech and Banking	Cross-border fintech collaborations, seamless digital payments, and improved banking services for NRIs in the Gulf.
Cultural Exchange	Boost to tourism, Bollywood-Saudi collaborations in film production, and education ties under Saudi Vision 2030.

Strategic Talks on Hajj and Labour Welfare

Hajj Quota Enhancement: PM Modi advocated increasing India’s Hajj quota to match demographic realities, focusing on easing the pilgrimage for women and elderly pilgrims.
Labour Welfare Measures: India and Saudi Arabia signed MoUs to strengthen migrant worker protections, streamline dispute resolution, and reform the Kafala system for better labour rights.

Expansion of Strategic Partnership Council

New working groups were introduced in defence technology and joint manufacturing, space cooperation (including satellite data sharing and lunar missions), and semiconductor collaboration for resilient chip supply chains and innovation.

Significance of Saudi Arabia for India

Diplomatic and Strategic Relations

Historical Ties: Diplomatic relations were established in 1947; major milestones include the Delhi Declaration (2006) and Riyadh Declaration (2010), which elevated ties to a Strategic Partnership.
Institutional Mechanism: The Strategic Partnership Council (SPC) will be formed in 2019 during PM Modi’s second visit to enhance bilateral cooperation.

Economic Cooperation

Trade Relations: In FY 2023–24, bilateral trade reached USD 42.98 billion (India’s exports: USD 11.56 billion; imports: USD 31.42 billion), positioning India as Saudi Arabia’s 2^nd largest trade partner.
Investment Flows: Indian investments in Saudi Arabia total USD 3 billion, while Saudi investments in India are USD 10 billion. FDI from 2000 to 2024 is USD 3.22 billion.

Energy Partnership

Oil Supply: Saudi Arabia was India’s 3^rd largest crude oil supplier in FY 2023–24, accounting for 14.3% of its imports.
LPG Imports: It was also the 3^rd largest LPG supplier, contributing 18.2% of India’s LPG imports.

Defence and Security Cooperation

Military Exercises: First-ever joint land exercise, EX-SADA TANSEEQ, was conducted in India in 2024.
Naval Engagements: Regularly conducting the bilateral naval exercise ‘Al Mohed Al Hindi’ enhances collaboration on maritime security.

Cultural and Religious Engagement

Haj Cooperation: The Bilateral Haj Agreement 2024 allocates a quota of 175,000 pilgrims, including provisions for women without a Mehram.
Yoga Diplomacy: In 2017, yoga was recognised as a sport in Saudi Arabia. Ms. Nouf Al-Marwaai received the Padma Shri in 2018 for her role in popularising yoga.

Indian Diaspora in Saudi Arabia

Community Presence: With more than 2.6 million members, the Indian community is Saudi Arabia’s largest expatriate group.
Positive Perception: Indians are seen as the ‘most preferred community’ in the Kingdom and play a key role in bilateral ties.

India-Saudi Arabia Relations: Challenges

Geopolitical Divergences: Saudi Arabia’s ties with Pakistan contrast India’s regional interests. India’s non-intervention in Middle Eastern conflicts, such as the Yemen war, may lead to diplomatic discomfort.
Energy Interdependence Mismatch: India relies on Saudi Arabia for 18% of its crude oil imports, exposing it to price volatility.
- Additionally, India’s green energy initiatives may clash with Riyadh’s oil-centric economy.
Trade and Investment Asymmetry: Trade reached USD 42.98 billion in 2023–24, but the relationship remains unbalanced. Saudi Arabia’s billion-dollar investment is not fully realised, and project delays hinder stronger ties.
Labour and Diaspora Issues: Indian diaspora of 2.6 million faces challenges under Kafala system, including limited labour rights, wage disputes, & inadequate legal recourse, straining bilateral engagement.
Religious and Cultural Sensitivities: Delays in Hajj negotiations, concerns about women pilgrims, and conservative norms in Saudi Arabia restrict soft power diplomacy.
Strategic Alignment Gaps: India’s ties with Iran and Israel differ from Saudi Arabia’s regional alliances, creating friction in broader West Asian security and political matters.

Way Forward for India–Saudi Arabia Relations

Broaden the Economic Horizon: Move beyond hydrocarbon-centric ties by enhancing cooperation in fintech, renewable energy, food security, healthcare, & digital economy (E.g., UPI-Aadhaar diplomacy).
Advance Defence and Strategic Security Ties: Institutionalise collaboration in defence R&D, joint manufacturing, cyber, and counterterrorism, leveraging the Strategic Partnership Council’s framework.
People-Centric Diplomacy: Promote cultural diplomacy through academic exchanges, language learning programs, bilateral tourism, and collaborations in film and art, enhancing trust and social integration.
Leverage Vision 2030 Synergies: Align with Saudi Arabia’s Vision 2030 by facilitating Indian participation in mega-projects like NEOM, Qiddiya, and Red Sea tourism, especially in construction, IT, & media.
Strengthen Multilateral and Regional Cooperation: Collaborate in global forums like G20, BRICS+, International Solar Alliance (ISA) and GCC+ to reinforce a rules-based, multipolar world order.
Ensure the Welfare of the Indian Diaspora: Proactively engage in labour reforms, faster dispute redressal, skill recognition, and safe and dignified migration, especially in post-Kafala labour frameworks.

India–Saudi Arabia relations have matured into a multifaceted strategic partnership rooted in energy, economy, and cultural bonds. By aligning India’s “Think West” policy with Saudi Arabia’s Vision 2030 and addressing mutual concerns, both nations can build a strong partnership based on trust and shared success.

Reference: Financial Express

PMF IAS Pathfinder for Mains – Question 168

Q. With India-Saudi Arabia ties evolving into a strategic partnership, assess their relevance in advancing India’s outreach to West Asia. Propose measures to strengthen collaboration across vital sectors. (250 Words) (15 Marks)

Approach

Introduction: Write the current status of India-Saudi Arabia ties and mention the 2019 Strategic Partnership Council.
Body: Write about the relevance of advancing India’s outreach to West Asia and measures to strengthen collaboration across vital sectors.
Conclusion: Conclude by highlighting the mutual benefits in economic growth, security, and global cooperation.