- What does the joint statement indicate?
- Acknowledging each other’s core interests
- India-Saudi Arabia Trade and Investments
- What are the future planning of Saudi Arabia?
- Riyadh Summit, 2019 highlights (Future Investment Initiative forum)
- Potential areas of next stage of bilateral cooperation
Substance across the Arabian Sea
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After Saudi Arabia’s third summit with India, the leaders of both the nations should be appreciated and lauded for focusing on leveraging the opportunities and build the positive momentum towards a healthier relationship.
What does the joint statement indicate?
- The post-summit joint statement not only covers the areas of agreement but also overrides the well-known differences between the two nations.
- Both sides believe that what joins them bilaterally is far more significant.
- Both the nations also realize that the informal alliance does not only help them attain their bilateral potential but it also widens their respective geostrategic options.
- India and Saudi Arabia have already commenced leveraging opportunities across a vast eco-space, from energy to agriculture and from fintech to skilling.
Acknowledging each other’s core interests
- India and Saudi Arabia acknowledged each other’s core interests and accommodated them. This can be understood from the fact that Saudi Arabia showed an ‘understanding’ of India’s actions in Jammu and Kashmir and at the same time India too ‘strongly condemned’ the various attacks on Saudi civilian facilities.
- The bilateral defence, security and anti-terror cooperation has intensified and the first naval exercise is to be held soon.
India-Saudi Arabia current Trade and Investments
- Despite vigorous efforts, the bilateral commercial and economic ties have still remained range-bound.
- Trade has drifted downwards largely due to lower crude prices. According to the latest Indian data, the bilateral trade in the first nine months of 2019 stood at $22,416 million, having fallen by 9.2% over the corresponding figure in 2018.
- It was 5:1 in kingdom’s favour and was dominated by the traditional commodities, revealing the need for greater Indian export promotion efforts.
- The Saudi investment in India, too, remains far below potential. The kingdom’s cumulative investments in India are only $229 million, or 0.05% of the total inbound FDI.
- Though the kingdom’s Indian community has come down marginally to 2.6 million, they are still the largest foreign community and their annual homeward remittances remain steady at $11 billion.
What are the future planning of Saudi Arabia?
- The Saudi Arabia’s Vision 2030 which is a strategic document lists eight major partner countries including India which has become the world’s third largest oil importer.
- Saudi Aramco is to be one of the two strategic partners in the proposed $44 billion, 1.2 mbpd PSU refinery at Raigarh on India’s west coast. It is also to acquire a fifth of the Reliance refinery at Jamnagar and to participate in India’s Strategic Petroleum Reserves.
- If realized and completed, these investments could total nearly $30 billion bringing the Saudi Arabia fourth position (fourth largest) among countries investing in India.
- Earlier, Saudi Crown Prince Mohammed bin Salman had committed to investing $100 billion in India.
Riyadh Summit, 2019 highlights (Future Investment Initiative forum)
- Prime Minister Narendra Modi listed five “trends” in India with global investors’ remit: technology and innovation, infrastructure development, human resource development, environment and business-friendly governance.
- Setting up of a bilateral Strategic Partnership Council (SPC) to be co-chaired by the Indian Prime Minister and the Saudi Crown Prince. It SPC would be a permanent bilateral platform with two verticals jointly serviced by the two Foreign and Trade and Industry Ministries.
Potential areas of next stage of bilateral cooperation
- The greater bilateral synergy in Indian infrastructure, agriculture, start-ups, skilling and IT.
- Shifting some labor-intensive establishments from Saudi Arabia to India can reduce the kingdom’s expatriate population and will boost ‘Make in India’.
The World Bank’s recently published rankings included both India and Saudi Arabia in its ten “most improved economies”. India achieved 63rd rank while Saudi got the 62nd rank. When the sub-region’s two largest, top-performing and complementary economies join hands, definitely, the sum would be greater than the total. The hopes have risen for an emphatic affirmative answer after the Riyadh Summit.