India – Saudi Arabia Relations | International Relations notes for UPSC, IAS

World map indicating India and Saudi Arabia
World map indicating India and Saudi Arabia

The relations between India and Saudi Arabia is generally strong and close, especially in commercial interests. Saudi Arabia is India’s fourth largest trade partner after China, US and UAE. It is a major source of India’s energy security requirement that counts for almost 1/5th of India’s crude oil requirement. Saudi Arabia is India’s top supplier of crude oil.

As of now the relations between India and Saudi Arabia revolves around two important areas –
1) trade and investment
2) defense and security cooperation

The volume of bilateral trade between both countries during 2016-17 recorded at $25.079 billion. Saudi Arabia is home to more than 3 million Indian people.

India heavily rely on the gulf countries for foreign Investments to expand the Indian market. The Indian government is focused on improving the infrastructure sector in taking efforts like – to improve the ease of doing business in the country and to simplify and rationalize existing rules and relax the foreign direct investment norms in key areas, including railways, defense and insurance has made Saudi Arabia to invest in Indian market.

The other sector where India-Saudi relations have been strengthened significantly is in the defense and security sector. India and Saudi Arabia share common grounds when it comes to maritime security and defense cooperation, fight against extremism and terrorism. However, India maintenance neutrality because Saudi Arabia has close military and strategic ties with Pakistan which is often it source of continuing strain for India.

India’s major exports to Saudi Arabia include basmati rice, textiles and garments and machinery, while it imports organic and inorganic chemicals, metal scrap, leather, gold and oil from Saudi Arabia.

Both nations are expected to expand trade and cooperation and joint ventures in telecommunications, pharmaceuticals, health services, information technology, biotechnology, agriculture, construction projects, energy and financial services. Both countries agreed to launch joint ventures for developing gas-based fertilizer plants in Saudi Arabia.

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