Indo-Saudi Arabian relations

Bilateral relations between the Republic of India and the Kingdom of Saudi Arabia have strengthened considerably owing to cooperation in regional affairs and trade. Saudi Arabia is the one of largest suppliers of oil to India, who is one of the top 7 trading partners and the 5th biggest investor in Saudi Arabia.cite web |url=http://www.business-standard.com/common/storypage_c_online.php?bKey
|title=India, Saudi Arabia to better understanding|accessdate=2008-06-04 |publisher=Business Standard]

Background

Since its independence in 1947, India has sought to maintain strong ties with Saudi Arabia, an important state and trading base in West Asia. In a major visit by King Saud of Saudi Arabia to India in 1953, both nations agreed to shape their relationship based on the Five Principles of Peaceful Co-existence.cite book |author=Prithvi Ram Mudiam |title=India and the Middle East |accessdate=2008-06-04 |pages=88-94|publisher=British Academic Press |year=1994 |isbn=1850437033] Saudi Arabia is also home to more than 1.4 million Indian workers.cite web|url=http://www.un.org/esa/population/meetings/EGM_Ittmig_Arab/P02_Kapiszewski.pdf |title=Arab versus Asian migrant workers in the GCC countries|format=pdf|accessdate=2008-06-05] India was amongst the few nations to recognise the Soviet-backed Democratic Republic of Afghanistan while Saudi Arabia was one of the key financers and supporters of the Afghan mujahideen who fought the Soviets and their Afghan allies from Pakistan.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4645836.stm |title=Saudi king on rare visit to India|accessdate=2008-06-04 |publisher=BBC News]

Development of bilateral relations

India's strategic relations with Saudi Arabia have been affected by the latter's close ties with Pakistan.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4645836.stm |title=Saudi king on rare visit to India|accessdate=2008-06-04 |publisher=BBC News] Saudi Arabia supported Pakistan's stance on the Kashmir conflict and during the Indo-Pakistani War of 1971 at the expense of its relations with India. The Soviet Union's close relations with India also served as a source of consternation.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4645836.stm |title=Saudi king on rare visit to India|accessdate=2008-06-04 |publisher=BBC News] During the Persian Gulf War (1991-92), India officially maintained neutrality. Saudi Arabia's close military and strategic ties with Pakistan have also been a source of continuing strain.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4645836.stm |title=Saudi king on rare visit to India|accessdate=2008-06-04 |publisher=BBC News]

Since the 1990s, both nations have taken steps to improve ties. Saudi Arabia has supported granting observer status to India in the Organisation of the Islamic Conference (OIC) and has expanded its cooperation with India to fight terrorism.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4655268.stm |title="New era" for Saudi-Indian ties|accessdate=2008-06-04 |publisher=BBC News] In January 2006, King Abdullah of Saudi Arabia made a special visit to India, becoming the first Saudi monarch in 51 years to do so.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4645836.stm |title=Saudi king on rare visit to India|accessdate=2008-06-04 |publisher=BBC News] The Saudi king and the Indian Prime Minister Manmohan Singh signed an agreement forging a strategic energy partnership that was termed the "Delhi Declaration."cite web |url=http://www.thehindubusinessline.com/2006/01/28/stories/2006012802970900.htm |title=India, Saudi Arabia sign strategic energy pact|accessdate=2008-06-04 |publisher=The Hindu Business Line] The pact provides for a "reliable, stable and increased volume of crude oil supplies to India through long-term contracts."cite web |url=http://money.cnn.com/2006/01/27/news/international/india_saudi.dj/ |title=India, Saudi Arabia in energy deal|accessdate=2008-06-04 |publisher=CNN] Both nations also agreed on joint ventures and the development of oil and natural gas in public and private sectors.cite web |url=http://money.cnn.com/2006/01/27/news/international/india_saudi.dj/ |title=India, Saudi Arabia in energy deal|accessdate=2008-06-04 |publisher=CNN] An Indo-Saudi joint declaration in the Indian capital New Delhi described the king's visit as "heralding a new era in India-Saudi Arabia relations."

Commerce

Since the 1990s, India's economic liberalisation has helped bolster trade with Saudi Arabia, which annually supplies to India nearly 175 million barrels (25 million metric tonnes) of crude oil, or a quarter of its needs.cite web |url=http://news.bbc.co.uk/2/hi/south_asia/4655268.stm |title="New era" for Saudi-Indian ties|accessdate=2008-06-04 |publisher=BBC News] In 2006-07 bilateral trade stood at USD 16 billion (USD 3 billion excluding oil) and is expected to double by 2010.cite web |url=http://www.arabnews.com/?page=15&section=0&article=104658&d=29&m=5&y=2008 |title=Saudi Arabia-India Investment Gets Immense Boost|accessdate=2008-06-04 |publisher=Arab News] cite web |url=http://in.rediff.com/money/2006/jan/23trade.htm |title=India-Saudi trade at $7 bn by 2010|accessdate=2008-06-04 |publisher=Rediff.com] India's current exports to Saudi Arabia stand at USD 2.6 billion, while Saudi Arabia's exports are in the range of USD 13.4 billion (USD 1.2 billion excluding oil).cite web |url=http://in.rediff.com/money/2006/jan/23trade.htm |title=India-Saudi trade at $7 bn by 2010|accessdate=2008-06-04 |publisher=Rediff.com] India's major exports include basmati rice, textiles and garments and machinery, while it imports organic and inorganic chemicals, metal scrap, leather, gold and oil from Saudi Arabia.cite web |url=http://in.rediff.com/money/2006/jan/23trade.htm |title=India-Saudi trade at $7 bn by 2010|accessdate=2008-06-04 |publisher=Rediff.com] 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.cite web |url=http://in.rediff.com/money/2006/jan/23trade.htm |title=India-Saudi trade at $7 bn by 2010|accessdate=2008-06-04 |publisher=Rediff.com] Both countries agreed to launch joint ventures for developing gas-based fertiliser plants in Saudi Arabia. India agreed to set up institutes of higher education and research, provide educational opportunities in India for Saudi Arabian students and expand cooperation between India's Council for Scientific and Industrial Research and the Saudi Arabian Standards Organisation (SASO).

References