Context:
Prime Minister Narendra Modi’s recent visit to Jeddah, Saudi Arabia, marked a significant moment in India-Saudi Arabia bilateral relations, despite being shortened due to a terrorist attack in Jammu and Kashmir. The visit witnessed the co-chairing of the second meeting of the India-Saudi Arabia Strategic Partnership Council (SPC) by PM Modi and Crown Prince Mohammed bin Salman, alongside the signing of several Memoranda of Understanding (MoUs) in strategic and emerging sectors.
Key Outcomes of the 2025 Bilateral Engagement
1. Political, Consular & Security Cooperation
2. Defence Cooperation
3. Economy, Energy, Investment & Technology
4. Tourism & Cultural Cooperation
Saudi Arabia reaffirmed its commitment to invest USD 100 billion in India, spanning sectors such as energy, infrastructure, health, and technology. The High-Level Task Force on Investment (HLTF) has facilitated cooperation in taxation reforms and projects like the establishment of two major refineries in India.
Key MoUs and agreements signed:
● Space Cooperation: Between the Saudi Space Agency and India’s Department of Space, focusing on peaceful space activities.
● Health Cooperation: Between the two health ministries to strengthen healthcare systems.
● Anti-Doping: Between the SAADC and NADA for education and prevention.
● Postal Cooperation: Between Saudi Post and India’s Department of Posts for inward surface parcel services.
Historical Context and Evolving Partnership of India and Saudi-Arabia:
India-Saudi ties have grown across diplomacy, economy, defence, and culture. India is Saudi Arabia’s second-largest trade partner, while Saudi Arabia ranks fifth for India.
Economy: FY 2023–24, bilateral trade reached USD 42.98 billion, with Indian exports at USD 11.56 billion and imports at USD 31.42 billion. Indian investments in Saudi Arabia amount to USD 3 billion, while Saudi investments in India, led by the Public Investment Fund (PIF), total USD 10 billion.
Saudi Arabia is the 20th largest FDI contributor to India with cumulative FDI of USD 3.22 billion (2000–2024).
- Energy: Saudi Arabia was India’s third-largest crude oil supplier (14.3%) and LPG supplier (18.2%) in 2023–24.
- Defence: Defence cooperation also advanced through joint exercises like EX-SADA TANSEEQ (land) and Al Mohed Al Hindi (naval).
Major Challenges:
Labour welfare remains a concern, with many Indian workers facing exploitation under restrictive systems like Kafala. The growing trade deficit, nearly USD 20 billion, stems from India’s reliance on Saudi oil and fluctuating global prices. Additionally, Saudi Arabia’s regional actions—such as in Yemen, the Qatar blockade, and its rivalry with Iran—pose diplomatic challenges for India, especially as Saudi ties with China and Pakistan deepen.
