India-Saudi Arabia Relations: A New Era of Strategic Partnership and Growth

Prime Minister Narendra Modi recently concluded a high-level state visit to Saudi Arabia, during which he co-chaired the 2nd meeting of the India-Saudi Arabia Strategic Partnership Council (SPC).

This significant diplomatic engagement marks a new phase in the India-Saudi Arabia bilateral relationship, highlighting deepening ties across strategic, economic, cultural, and defence domains.

Key Outcomes of the India-Saudi Arabia Strategic Partnership Council Meeting

1. Strengthened Institutional Framework

Two new Ministerial Committees were established to enhance cooperation in Defense and Tourism & Culture, expanding the SPC’s structure to four key verticals:

• Political, Consular & Security Cooperation
• Defence Cooperation
• Economy, Energy, Investment & Technology
• Tourism & Cultural Cooperation

2. High-Level Task Force on Investment (HLTF)

Saudi Arabia reaffirmed its intent to invest $100 billion in India, targeting sectors such as:

• Renewable and traditional energy
• Infrastructure
• Technology
• Healthcare

The HLTF has already facilitated collaboration on two refineries in India and addressed taxation concerns to pave the way for smoother investment flows.

3. Major MoUs and Agreements Signed

• Space Cooperation: Between Saudi Space Agency and India’s Department of Space.
• Healthcare: Aimed at medical exchange, research, and services.
• Anti-Doping Collaboration: With India’s NADA to promote clean sports.
• Postal Services: Enhancing inward surface parcel delivery systems between the two countries.

 

Evolution of India-Saudi Arabia Relations

Diplomatic Milestones

• Established diplomatic ties in 1947.
• Key agreements: Delhi Declaration (2006) and Riyadh Declaration (2010).
• Formation of the Strategic Partnership Council in 2019 elevated ties to a comprehensive strategic level.

Expanding Economic Ties

• Bilateral trade reached $42.98 billion in FY 2023–24.
• India exports: $11.56 billion | Imports from Saudi Arabia: $31.42 billion.
• Saudi Arabia is India’s third-largest oil supplier and fifth-largest trading partner.

Investment Snapshot

• Indian FDI in Saudi Arabia: $3 billion
• Saudi FDI in India: $10 billion (PIF-led)
• Cumulative Saudi FDI (2000–2024): $3.22 billion

Growing Energy and Defense Partnerships

• Crude Oil: 14.3% of India’s total imports
• LPG: 18.2% of India’s total imports
• First joint military exercise “EX-SADA TANSEEQ” held in 2024.
• Ongoing naval cooperation under “Al Mohed Al Hindi”.

Cultural and People-to-People Ties

• Over 2.6 million Indians live in Saudi Arabia, forming the largest expatriate group.
• Bilateral Haj Agreement 2024 includes special provisions for women without Mehram.
• Rising popularity of Yoga, promoted by Padma Shri recipient Ms. Nouf Al-Marwaai.

 

Key Challenges in India-Saudi Arabia Relations

1. Labour Rights and Welfare

• Worker exploitation, wage delays, and poor conditions are major issues.
• The Kafala system restricts worker rights and mobility.

2. Trade Imbalance

• Trade deficit reached nearly $20 billion in FY 2023–24.
• India’s energy dependence on Saudi Arabia makes it vulnerable to global oil price fluctuations.

3. Geopolitical Tensions and Strategic Dilemmas

• Saudi Arabia’s regional policies in Yemen and Syria affect Gulf stability.
• Saudi-Iran rivalry challenges India’s balancing act between the two.
• Closer Saudi ties with China and Pakistan may strain India’s strategic calculus.

Conclusion

The India-Saudi Arabia partnership is evolving into a robust and multifaceted strategic alliance. With shared interests in energy security, economic diversification, and technological innovation, the two nations are poised to co-create a future marked by mutual prosperity and geopolitical influence.

Indian Prime Minister Narendra Modi cut short his diplomatic tour to Saudi Arabia amid Terror attack in Pahalgam, Jammu and Kashmir on 22 April, 2025. He returned to India late night Tuesday while his original return was destined on Wednesday 23 April. Saudi Arabia and Other several Countries came into support of India after Pahalgam terror Attack.

PC : Ministry of External Affairs, Government of India (mea.gov.in)