Historical Trade Relations
The history of trade and cultural interactions between India and Arabia can be traced back to the third millennium BC, marking a long-standing relationship that has influenced both regions significantly. By around 1000 AD, trade relations between southern India and Arabia had blossomed into a vital economic lifeline for the Arabian Peninsula, with Indian merchants supplying a variety of goods, particularly spices. These trades not only facilitated economic growth but also laid the groundwork for cultural exchanges, whereby ideas, religions, and traditions were shared across the Arabian Sea.
The Arab traders dominated the spice trade that linked India to Europe for centuries, fostering a deep-rooted connection that persisted until the advent of European imperialism. India's early ties with the Third Saudi State further exemplified this historical relationship. Notably, during the 1930s, British India provided substantial financial aid to Nejd, indicating the strategic importance of the region to Indian interests even before independence.
Diplomatic Relations Post-Independence
After India achieved independence in 1947, formal diplomatic relations with Saudi Arabia were established, marking a new chapter in their interactions. These relations have since strengthened, particularly through collaboration in regional political matters and economic trade. Saudi Arabia has become one of India's foremost oil suppliers, playing a crucial role in energy security, while India has emerged as one of Saudi Arabia's top trading partners and the fifth largest investor in the Kingdom. This interdependence underscores the importance of their bilateral relations in the contemporary geopolitical landscape.
Visits by Indian Prime Ministers
The relationship has been further enhanced through high-level visits by Indian Prime Ministers. Notably, Jawaharlal Nehru visited Saudi Arabia in 1955, followed by Indira Gandhi in 1982, Manmohan Singh in 2010, and Narendra Modi in 2016. These visits have often focused on reinforcing economic ties, counter-terrorism cooperation, and cultural diplomacy. Collectively, they reflect the commitment of both nations to deepen their partnership across various sectors, particularly in the face of global challenges.
Cultural and Religious Connections
A significant aspect of India-Saudi Arabia relations is the deep cultural and religious ties rooted in the shared faith of Islam. Islam stands as the second largest religion in India, contributing to a substantial Muslim population that ranks among the largest in the world. This demographic connection manifests in the annual pilgrimage of thousands of Indian Muslims traveling to Saudi Arabia for Hajj and Umrah, reinforcing the cultural links. In this context, the two nations also cooperate on matters concerning the welfare of the Muslim community, further solidifying their interrelations on both social and religious fronts.
In summary, the relationship between India and Saudi Arabia has evolved over millennia, characterized by trade, cultural exchanges, and a shared commitment to regional stability. The continuing collaboration across various domains underscores the importance of this bilateral relationship in fostering mutual growth and understanding in a rapidly changing global landscape.
Historical Context
Since gaining independence in 1947, India has consistently endeavored to foster strong diplomatic and economic relations with Saudi Arabia, recognizing it as a pivotal regional power and a vital trading hub in West Asia. The foundation for this partnership was laid during the historic visit of King Saud of Saudi Arabia to India in November 1955. During this visit, the two nations reached a mutual understanding to frame their bilateral relationship around the Five Principles of Peaceful Co-existence, which emphasize respect for sovereignty, mutual non-aggression, and non-interference in each other's internal affairs. This principled approach laid a robust groundwork for enduring collaboration between the two countries, focusing on trade, culture, and strategic interests.
Significant Workforce Presence
A crucial aspect of India-Saudi Arabia relations is the substantial Indian expatriate community in the kingdom, which exceeds 1.4 million workers. These individuals play a vital role in various sectors, notably in construction, healthcare, and services, contributing significantly to the Saudi economy. The Indian diaspora not only fosters strong people-to-people connections but also acts as a bridge in enhancing diplomatic ties. The Indian government has continuously worked towards the welfare and protection of its citizens abroad, ensuring that the rights and interests of Indian workers in Saudi Arabia are safeguarded.
Diverging Political Stances
Despite their close ties, India and Saudi Arabia have experienced divergent political stances on specific issues, particularly in relation to Afghanistan. India was the only South Asian country to recognize the Soviet-backed Democratic Republic of Afghanistan during the Cold War era. In contrast, Saudi Arabia emerged as a primary backer of the Afghan mujahideen, opposing Soviet influence and supporting the insurgency with financial and military assistance from its territory in Pakistan. This historical backdrop of varying allegiances during the Cold War highlighted the complexity of international alliances and how they have shaped the geopolitical landscape in South Asia and the Middle East.
Evolving Bilateral Relations
In the contemporary era, India and Saudi Arabia have recognized the importance of collaboration in countering terrorism, addressing regional security concerns, and enhancing economic cooperation. Both nations have engaged in strategic dialogues and established multiple mechanisms for cooperation in various sectors, including energy, trade, and security. Efforts have also been made to strengthen cultural ties through exchanges in education, science, and technology, promoting mutual understanding and respect between their populations. As they continue to navigate their partnership, issues such as energy security and labor rights remain pivotal in shaping the future trajectory of India-Saudi Arabia relations. The evolving landscape of global politics and economics further underscores the importance of maintaining a robust and mutually beneficial relationship between these two significant nations.
Bilateral Relations Development
India's strategic relationship with Saudi Arabia has been historically complex, primarily influenced by Saudi Arabia's ties with Pakistan. Over the years, Saudi Arabia has often sided with Pakistan, particularly during pivotal moments like the Kashmir conflict and the Indo-Pakistani War of 1971. This backing came at a cost, effectively overshadowing and straining its relations with India. Furthermore, the close relationship between Saudi Arabia and Pakistan has often created a perception of Saudi complicity in anti-Indian sentiments, especially amidst the geopolitical dynamics of the Cold War, during which India found itself aligned with the Soviet Union. These factors contributed to a long period of tension between the two nations, particularly noticeable during events such as the Persian Gulf War in 1990-91, where India maintained an official stance of neutrality while Saudi Arabia reinforced its military ties with Pakistan.
Since the 1990s, both India and Saudi Arabia have recognized the importance of strengthening their ties, leading to a gradual thawing of relations. One significant step was Saudi Arabia's support for India's bid to obtain observer status in the Organisation of Islamic Cooperation (OIC), which exemplified a shift in Riyadh's perception of New Delhi. Notable strides occurred with the state visit of King Abdullah of Saudi Arabia to India in January 2006, marking the first visit by a Saudi monarch to India in over half a century. During this momentous visit, King Abdullah and Indian Prime Minister Manmohan Singh signed the "Delhi Declaration," establishing a strategic energy partnership. This agreement aimed to ensure a "reliable, stable, and increased volume of crude oil supplies to India" through long-term contracts, thus laying a solid foundation for future cooperation in the energy sector.
Over the following years, the relationship has further strengthened, particularly in the religious domain. In 2019, Saudi Arabia increased India's Hajj quota, making it the second-highest among all countries. This decision allowed approximately 200,000 Indian pilgrims to perform the Hajj, highlighting the significance of religious diplomacy in fostering goodwill between the two nations. Such moves underline the growing acknowledgment of India's considerable Muslim population and its cultural and religious ties to the Kingdom.
The bilateral ties faced challenges, exemplified by India's vote against a Dutch resolution in the UN Human Rights Council in October 2021. This particular resolution sought to extend the mandate of the Group of Eminent Experts (GEE) human rights investigators in Yemen, a move which was met with pushback from Saudi Arabia. India's decision to vote against the resolution illustrated the delicate balancing act it must maintain, navigating its relationships with Saudi Arabia while also addressing international human rights dynamics. As both countries continue to work towards enhancing their strategic partnership, the complexities of past grievances and current geopolitical ambitions will likely remain forefront in the dialogue between India and Saudi Arabia.
Commerce
Since the onset of the 1990s, India has witnessed significant economic liberalization, which has greatly enhanced its trading relationship with Saudi Arabia. The Kingdom is a crucial supplier of crude oil to India, providing approximately 175 million barrels, or around 25 million metric tonnes, each year. This accounts for nearly a quarter of India’s total oil requirements. During the fiscal year 2006–07, bilateral trade between the two nations reached approximately US$16 billion, excluding oil components, with forecasts suggesting this figure could double by 2010. As of now, India’s exports to Saudi Arabia stand at about US$2.6 billion, while imports from Saudi Arabia are considerably higher, reaching US$13.4 billion. Indian exports primarily comprise commodities such as basmati rice, textiles, garments, and machinery. Conversely, India imports a diverse range of products from Saudi Arabia, including organic and inorganic chemicals, metal scrap, leather goods, gold, and, significantly, oil.
The potential for trade expansion remains strong, with both nations looking to enhance bilateral cooperation across various sectors. Key areas identified for joint ventures include telecommunications, pharmaceuticals, health services, information technology, biotechnology, agriculture, construction projects, energy, and financial services. Recently, both countries have agreed to collaborate on the development of gas-based fertilizer plants in Saudi Arabia, reflecting a mutual interest in bolstering agricultural productivity. Moreover, India has committed to establishing institutes of higher education and research in Saudi Arabia, creating educational opportunities for Saudi students in India, and enhancing cooperation between India’s Council of Scientific and Industrial Research and the Saudi Arabian Standards Organisation (SASO).
In the fiscal year preceding 2015, India-Saudi trade neared US$25 billion, fueled by the presence of approximately two million Indian workers in Saudi Arabia. The trade dynamics saw India exporting goods worth $7 billion to Saudi Arabia, which constituted about 2.7% of India’s total exports. The ten major commodities exported included cereals valued at $1.8 billion, spices at $1.1 billion, and machinery at $459 million. In terms of imports, Saudi Arabia sent goods worth $21.4 billion to India, representing 5.5% of India's overall imports. Key exports from Saudi Arabia included oil, which was valued at $16.4 billion, organic chemicals costing $1.2 billion, and fertilizers at $729.9 million.
As trade relations matured, by 2018, bilateral trade peaked at $27.5 billion, further solidifying the economic ties between the two countries. The year 2023 marked a significant geopolitical shift when both the UAE and Saudi Arabia joined the BRICS coalition, emphasizing their growing stature in the global economic landscape and their commitment to enhancing multilateral cooperation. This partnership further underlines the importance of India-Saudi relations, with both nations poised to leverage their strategic positions in global trade and investment.
Bilateral investment between India and Saudi Arabia plays a pivotal role in the economic development of both nations. As developing economies, both countries stand to benefit from the two-sided stream of investment, particularly in infrastructure and other critical sectors. Since India's economic liberalization in 1991, there has been a notable increase in bilateral investment, with a more pronounced acceleration observed in the new millennium. This investment landscape has allowed Saudi Arabia to establish itself as one of the prominent contributors to India's foreign direct investment (FDI), ranking 15th overall and second among Arab nations, trailing only the United Arab Emirates.
The extent of Saudi investment in India is substantiated by figures indicating a total of US$21.55 million in FDI joint ventures from 2004 to 2008. From the onset of economic reforms in 1991 until the end of 1999, Saudi investments reached ₹422 million (approximately US$5.1 million), which further increased to ₹691 million (about US$8.3 million) in the period from January 2000 to August 2008. These investments have been channelled into a diverse array of industries, spanning sectors such as paper production, chemicals, computer software, granite processing, industrial machinery, cement, and metallurgical industries, showcasing the multifaceted nature of economic ties between the two nations.
Conversely, Indian enterprises have also begun to explore opportunities within the Saudi market following the implementation of new investment laws that promote foreign investment. A survey conducted by the Saudi investment authority revealed that India was involved in 56 FDI projects worth approximately 304 million SAR in 2005. These projects cover a wide range of sectors, including management and consultancy services, construction, telecommunications, information technology, and pharmaceuticals. Additionally, numerous Indian companies have successfully established collaborations with local Saudi firms, contributing their expertise in areas such as design, consultancy, financial services, and software development.
The growing bilateral investment relationship between India and Saudi Arabia reflects a strategic alignment of interests that can potentially catalyze further economic growth and development. As both countries continue to evolve within the global economic landscape, fostering robust partnerships in diverse industries will undeniably enhance the potential for mutual prosperity. Furthermore, these collaborative efforts not only strengthen economic ties but also cultivate a deeper understanding and cooperation between the two nations, setting a promising foundation for future endeavors.
Manmohan Singh's Historic Visit to Saudi Arabia
In a significant diplomatic engagement, Indian Prime Minister Manmohan Singh embarked on a three-day visit to Saudi Arabia starting from February 27, 2010. This visit marked a notable milestone as it was the first by an Indian Prime Minister to the Kingdom since 1982, highlighting the evolving relations between India and Saudi Arabia. Accompanying the Prime Minister were key officials, including his wife Gursharan Kaur and various ministers from health, commerce, and external affairs sectors. This delegation underscored the importance of the trip, which aimed to strengthen the bilateral ties encompassing trade, security, and cultural exchanges.
The reception that Singh received upon arrival was emblematic of the deep-rooted ties shared by the two nations. Crown Prince Sultan bin Abdul Aziz personally welcomed him at the royal terminal of King Khalid International Airport, a rare courtesy that showcased the high esteem in which India is held within Saudi Arabia. The gesture was enhanced by the exception of using a red carpet instead of the customary green one, symbolizing significant diplomatic respect. The route to the city center, adorned with flags from both nations, further illustrated the warmth of the welcome and the significance of this visit.
Throughout the trip, Singh actively participated in various ceremonies, one of the highlights being his address to the Majlis-e-Shura, which was considered a rare privilege for a visiting dignitary. It was noteworthy that Latha Reddy, a senior female diplomat, was exceptionally permitted to forego wearing the abaya or hijab during this visit — an act interpreted as a gesture reflective of progressive changes within Saudi societal norms. Such moments during the visit not only fostered goodwill but also showcased the evolving dynamics in gender and cultural perceptions within the kingdom.
In terms of substantive outcomes, Singh was conferred with an honorary doctorate by King Saud University, emphasizing academic and educational cooperation between the countries. Another landmark achievement was the signing of a Memorandum of Understanding (MoU) between the Indian Institute of Science in Bangalore and King Saud University. This document set the foundation for future collaborative research initiatives. Singh's acknowledgment of the Indian diaspora, comprising over 1.8 million individuals in Saudi Arabia, at a community event underscored the essential contribution of the Indian community to the Saudi economy. His remarks that "India is proud of you" resonate with the deep connection between the two nations.
The visit led to significant agreements including an extradition treaty and various bilateral pacts that ranged from cultural exchanges to advancements in technology and space cooperation. Specifically, agreements were finalized for the transfer of sentenced persons, as well as a memorandum for peaceful cooperation in outer space between the Indian Space Research Organisation and Saudi organizations. Furthermore, key industries were represented, exemplified by Tata Motors securing a contract to supply school buses worth USD 80 million, underlining the potential for enhanced economic cooperation.
Concluding his visit on March 1, 2010, Prime Minister Singh's trip laid a robust framework for future engagement between India and Saudi Arabia. By articulating the shared interests and cultural connections, the visit aimed to deepen diplomatic ties and pave the way for increased investment and collaboration, an endeavor that remains vital in the ever-shifting geopolitical landscape of the region.
Narendra Modi's Visit to Saudi Arabia in 2016
In April 2016, Indian Prime Minister Narendra Modi undertook a significant visit to Saudi Arabia, marking a pivotal moment in the bilateral relations between the two nations. The primary agenda of this visit encompassed several key sectors, including energy cooperation, security collaboration, trade enhancement, and the welfare of the Indian diaspora residing in Saudi Arabia. Given the rapid industrial growth and developmental ambitions of both countries, the visit was poised to strengthen ties and lay the groundwork for future partnerships.
During this visit, Modi was honored with the Order of King Abdulaziz, which stands as the highest civilian accolade conferred by the Kingdom of Saudi Arabia. This prestigious award not only symbolized the recognition of Modi’s efforts in fostering stronger India-Saudi relations but also highlighted the importance Saudi Arabia places on its strategic partnership with India. The honor served to further consolidate the goodwill between the two nations and illustrated a mutual respect for each other's roles on the global stage.
The discussions during Modi's visit touched upon crucial energy partnerships, with India being one of the largest consumers of oil and Saudi Arabia being a leading oil producer. Both nations explored avenues for long-term energy security, including investments in oil refining and renewable energy projects, reflecting a shared commitment to sustainable energy initiatives. In addition to energy, security collaboration was underscored as a crucial element, particularly concerning the challenges posed by terrorism and regional instability. The leaders emphasized the necessity of a coordinated approach to counter these threats effectively.
Trade relations also took center stage during the discussions, as both leaders sought to bolster economic ties. Trade between India and Saudi Arabia has historically been robust, but the meeting aimed to further expand commerce in various sectors, including technology, pharmaceuticals, and agriculture. The leaders expressed optimism about enhancing bilateral trade volumes and fostering investments that could catalyze economic growth in both nations.
Another significant aspect of Modi's visit was the well-being of the Indian diaspora in Saudi Arabia, which is one of the largest expatriate communities in the Gulf region. Modi's commitment to ensuring their safety, social welfare, and economic opportunities resonated strongly throughout his discussions, as he acknowledged the immense contributions the Indian community has made to Saudi Arabia's development. The visit not only reinforced diplomatic relations but also served to honor the ties that bind the people of both nations, paving the way for a more integrated future.
2019 Visit to India
In February 2019, the Saudi Crown Prince, Muhammad bin Salman, embarked on a significant visit to India as part of his broader tour of Asia. This visit marked an important moment in India-Saudi Arabia relations, which have been historically robust due to shared interests and mutual cooperation in various sectors. During his visit, the Crown Prince held discussions with Indian Prime Minister Narendra Modi, as well as other high-ranking officials, reflecting the depth of diplomatic engagement between the two nations.
One of the primary objectives of the visit was to strengthen the historical ties that have existed for decades. The discussions centered on enhancing bilateral trade relations, with both countries recognizing the potential for increased economic cooperation. In fact, during this visit, both countries acknowledged the impressive bilateral trade, which stood at $42.81 billion at that time. The leaders expressed a desire not only to maintain but also to deepen this economic partnership, with aspirations for Saudi investments in India to surge to an impressive $100 billion within the following two years. This ambitious goal highlights the potential for collaboration across multiple sectors, including technology, healthcare, and renewable energy.
Additionally, the visit underscored the cultural and religious ties that bind the two nations. The number of Indian pilgrims traveling to Saudi Arabia for Hajj was a significant topic of discussion, with the number increasing to 200,000 per year. This move is indicative of Saudi Arabia's commitment to facilitating the pilgrimage, which holds immense religious significance for millions of Muslims worldwide. Beyond trade and investment, the visit promoted a sense of camaraderie that extends to cultural exchanges, where both nations can learn from each other's rich histories and traditions.
Overall, the visit made by Crown Prince Muhammad bin Salman exemplified the strengthening of India-Saudi Arabia relations and set a framework for future cooperation. As both nations look to build on their historical ties, the shared vision for economic growth, cultural exchange, and enhanced diplomatic engagement stands as a testament to the evolving partnership between India and Saudi Arabia.