India-Saudi ties have moved beyond energy to strategic waters. But challenges exist in the way of balancing relations with Iran and the bogey of Pakistan.
The Indian and Arabian peninsulas have traditionally been likened to camels of the desert, sitting close to each other but looking askance into the distance for a dream companion. However, India and Saudi Arabia have in recent decades started turning their heads towards each other and are recognising the growing alignment of their geostrategic and economic interests that could help chart their journeys together into the future.
The new caravans
This shift began in the aftermath of the traumatic 9/11 attacks, when Saudi businesses were boycotted by Western economies and were forced to ‘Look East’ to invest their petrodollars in the emerging markets of Asia.
It was a fortuitous move, as India and China were just getting ready to realise their rightful place on the world stage as emergent economic and political powers. In fact, the India-GCC trade bill started touching $200 billion annually as a consequence.
Clearly, the traditional ‘energy buyer-seller’ paradigm of relations between India and Saudi Arabia started taking on a more strategic dimension, in view of the long-term stakes that both sides deemed vital.
It is noteworthy that Saudi Arabia is currently India’s fourth largest trading partner, is estimated to host over 3.2 million Indian expatriates, supplies about 20 per cent of our annual oil imports, and as the custodian of Islam’s two holiest shrines, holds high esteem in the hearts of India’s large Muslim population.
Meanwhile, the two sides continue to explore strategic avenues for cooperation and have made significant headways in the fields of counterterrorism, maritime security, money-laundering, terror-financing and military training. The association has developed to the extent that the two now deliberate on matters concerning peace in various troubled theatres, including in Afghanistan.
Stronger relations with Saudi Arabia also help India offset Pakistan’s increasingly malefic designs in the subcontinent. The ties have also recently helped India mitigate the impending fall in oil imports from sanction-hit Iran.
India’s ascendance
For Saudi Arabia, India’s economic ascendance has made it a highly attractive diplomatic and investment proposition. Its newspapers like Arab News frequently flaunt India’s predicted rise as the world’s fifth largest economy and that it will “probably be the fastest-growth country in the world in 2019”. Last year, India was selected the ‘guest of honour’ at the 2018 Janadriyah Festival—a prestigious annual ‘National Heritage and Cultural Festival’ of Saudi Arabia—that was inaugurated by King Salman in the presence of Union external affairs minister Sushma Swaraj. Earlier in 2016, Prime Minister Narendra Modi became the only Indian leader to receive Saudi Arabia’s highest civilian honour, the King Abdulaziz Sash.
Such recognition comes in the wake of Saudi Arabia’s increasing appreciation of India’s growing geopolitical and economic ascendance. Again, Saudi Crown Prince Mohammed bin Salman’s major economic initiative—‘Vision 2030’—that aims to shift the oil-based economy into an industrial and service sector giant and thereby creating 1.6 million jobs is currently passing through a crisis. In the aftermath of the infamous Khashoggi assassination, international investments have fallen, and that has made the Saudi economy more accommodative towards Indian investors, companies and professionals, luring them to enter the growing sectors of hospitality, tourism, housing, IT etc.
In addition, the kingdom is also seeking to invest across a number of sectors in the Indian economy over the next two to three years, ranging from technology, agriculture and renewable energy. Prince Mohammed bin Salman (informally known as MBS) has said that his country will significantly scale up investment in India, and has promised an initial tranche in India’s National Investment and Infrastructure Fund--a quasi-sovereign wealth fund for building ports and other infrastructure projects, according to news reports. MBS is also supposedly eyeing investment in India’s tech, farm and energy sectors. According to Saudi Press Agency, he has also signalled readiness to “supply India with all of its needs of oil and petroleum products, as well as Saudi giant Aramco’s investment in refineries in India, especially the large refinery in the western coast of India and in the field of crude oil storage”. Thus, Saudi Arabia wants to be part of India’s own, newly announced ‘Vision 2030’.
These promises made by the Saudi Crown Prince to prime minister Modi on the sidelines of the G20 meeting in Buenos Aires late last year will make MBS’s upcoming visit to India, in the latter half of February, all the more interesting.
Spoiler alert
However, the course of dalliance never did run smooth. Several challenges and criticisms dog this promising association. Both countries are known for their prolix bureaucratic processes and red tape that could stymie the best plans. Modi has been criticised for not joining the international community over the Khashoggi issue and for showing no moral compunctions in basing India’s foreign policy squarely on realism.
The government has also been criticised for being friendly with Saudi Arabia, even as the latter continues to support Pakistan and recently rescued its failing economy with a whopping $3 billion bailout package. The kingdom also plans to establish a $10 billion oil refinery at Gwadar Port and has given assurances to invest in China’s CPEC project. These foreign grants have worsened corruption in Pakistan and help perpetuate its military-backed interventionist policies.
There is also apprehension that Pakistan-based terrorist groups would continue to receive funding from private Saudi donors, which in turn would exacerbate violence and unrest in various Indian states. The Indian government would have to raise its concerns over the funding of extremist madrasas by various Saudi-based foundations that run contrary to the moderate version of Islam that MBS avowedly promotes.
Art of de-hyphenation
New Delhi would also face a major challenge in rescuing its relations with Tehran, as MBS’s investment promises are seen as an incentive to India to stop importing oil from Saudi Arabia’s ‘arch-enemy’. Critics of India’s growing closeness towards the GCC countries claim that the move may even damage India’s ties with Iran irreversibly, and with it jeopardise its planned access to Central Asia and Afghanistan through the Chabahar Corridor.
However, it has to be understood that India has walked the tightrope in a fractious West Asia for several decades now and its policy of de-hyphenating relations in a ‘non-zero sum game’ is well known to all parties. India’s relations with Iran have weathered many a storm in the past and even survived India voting against its nuclear programme thrice.
When it comes to Saudi Arabia, India’s relations remain strong and independent of extraneous factors. The greater good and the larger interest of nations in the end gain precedence over petty politics and debates of self-righteous casuistry.
(Adil Rasheed is Research Fellow at the Institute of Defence Studies and Analyses, New Delhi)