India-Saudi Arabia : Overview

Facts and context:

  • Principle supplier of Crude oil to India meeting nearly 20% of India’s need thus central to India’s energy security
  • India’s fourth largest trade partner
  • 2.9 million Indians in Saudi Arabia – engaged in entire spectrum of economy
  • Historical context: History of trade and rise of Arabs due to trade intermediaries between India and Europe.
  • Islamic connection and Haj subsidy.
  • Nitaqat issue: replacement of foreign workers with Saudi nationals in the┬áprivate sector
05/04/2016
PM visit to Saudi Arabia –
Outcomes:
  • increased cooperation in counter-terrorism, intelligence sharing and regional security will enhance our presence and credibility in the region.
  • connecting with the 7 million strong Indian diaspora in the region which provides for the largest remittances from abroad
  • Joint communique on state sponsored terrorism with an oblique reference to┬áPakistan in a time when Saudi-Pak ties are in strain. This increased co-op may help us better negotiate with Pakistan. A sense of opportunity built into our current engagement like Saudi is distancing away from Pakistan due to latter’s refusal in Yemen airstrike
Concerns:
  • We need to do a fine balancing act in our relationship of Saudi Arabia and Iran both of which are major oil and energy rich regions important for our energy security.
  • Also at a time when Saudi Arabia is itself funding Wahhabi groups, fuelling Shia-Sunni conflict, funding war on Yemen the claim against state sponsored terrorism seems hollow.
  • Greater alignment with US-SAUDI ARABIA-ISRAEL entente may antagonise RUSSIA-IRAN-PALESTINE who have been traditional supporters of our strong democratic, civilizational and moral values.
Opportunities:
  • Sovereign wealth can boost investment
  • PM Modi being awarded the highest civilian award of Saudi refers to renewed recognition of a resurgent and shifting India in Saudi’s eyes
  • India is pursuing Project Mausam for closer civilizational ties and India, with a strong navy, will be key regional security provider.
Indian immigrants issue
The Saudi government was forced to cut its spending last year on the back of plummeting oil prices. As a result, it created pressure on the financials of local construction companies. Such firms employ foreign workers and rely on state contracts. The resultant strain on the firms led to nearly 10,000 workers being laid off, and left them with no money to even eat food. More than 2,500 Indians are said to be living in labour camps with no food

 

 

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