Saudi FM Visits India, Signaling a New Chapter in Bilateral Relations

Global and regional turmoil have led India and Saudi Arabia to reconsider their foreign policy priorities. In recent years, Saudi Arabia has expanded its ties with India; it has described New Delhi as one of the eight “great powers,” and has pushed for a strategic partnership between the two nations through its Vision 2030 initiative. From India’s perspective, Saudi Arabia and the GCC states are emerging as important actors in the Middle East and thus present an enticing prospect for cooperation. On September 18, Saudi Foreign Minister Faisal bin Farhan Al Saud arrived in New Delhi to begin a three-day visit to India, his first as FM. This visit signals a shift in Saudi-Indian relations, the effects of which could improve economic integration and enhance regional security.

Promising Economic Trends

In 2020, Saudi Arabia and India’s volume of bilateral trade increased to $33 billion. The vast majority of this trade (81%, or about $27 billion) took the form of Indian imports to Saudi Arabia; Saudi exports to India were only $6.24 billion.

India and Saudi Arabia already have a deeply cooperative relationship, particularly in regard to the provision of food, medicine, and energy. To illustrate, during the COVID-19 pandemic, Saudi Arabia provided free healthcare to its large expatriate population, including millions of Indians, while more than 1,500 Indian healthcare workers have traveled to Saudi Arabia to provide assistance during the pandemic. India’s concerns about future energy security have also driven friendly relations between New Delhi and Riyadh, judged to be a reliable provider of oil and gas.

While there exist areas of potential benefit for both countries—particularly in foreign direct investment flows—obstacles to increased economic engagement between Saudi Arabia and India remain. The Modi government is counting on Saudi Arabia to invest heavily in India. During a visit to India in February, Saudi Crown Prince Mohammed bin Salman estimated the volume of investments in the country at about $100 billion. On the other hand, it is clear that economic pressures caused by the Covid-19 pandemic have pushed Saudi Arabia to gain access to foreign investment of its own. The initial public offering of Aramco shares was primarily made to fund Vision 2030, but disappointing results from the IPO, combined with a steep fall in the price of oil, have forced Saudi leaders to look elsewhere to fund Saudi economic diversification. Despite the potential for cooperation, India’s desire for good relations with Saudi Arabia’s regional rival, Iran, further complicates the Saudi-Indian partnership. Indeed, Indian analysts tend to interpret the departure of the Modi government from Saudi Arabia and the strengthening of Indo-Iranian relations as related developments.

Mutual Concerns in Afghanistan

As the Taliban continues to consolidate power in Afghanistan, neighboring and regional countries have sought to assess the new government in Kabul and calibrate their responses accordingly. The evolving situation in Afghanistan has forced states like India and Saudi Arabia to determine their national security interests in Kabul within the context of a new regional balance of power. During his visit to New Delhi, FM al-Farhan said transnational terrorism was a “concern” for Saudi Arabia, and that he had spoken in detail with Indian Foreign Minister Subrahmanyam Jaishankar about the matter. In the end, demographic concerns, anxieties surrounding the spread of Islamic fundamentalism, and the growing threat of terrorist groups in the region have prompted Saudi Arabia and India to pursue similar objectives in their foreign policies.

The collapse of the Afghan government following the U.S. withdrawal has affected both nations; it has caused a refugee crisis in India and threatens Saudi security interests. Thus far, the Indian government has said it will facilitate the return process for Afghan applicants, as well as Afghans who are India’s “partners”. A stable and secure Afghanistan is a prerequisite for continued Indian investment in the country, and can simultaneously reduce Riyadh’s security concerns.

To achieve stability in Afghanistan and prevent the rise of a Pakistan-dominated government in Kabul, New Delhi invested $3 billion in Afghanistan’s development projects under the Ghani government and provided scholarships to Afghan students. India also won favor with the Afghan leadership by helping to build the Afghan parliament building, to the tune of roughly $90 million. In 2020, Indian Foreign Minister Jaishankar claimed that there was no part of the country that remained “untouched” by Indian development initiatives. There is little doubt India’s efforts are aimed at preventing encroaching Pakistani influence in Afghanistan. Based on the doctrine of “strategic depth“, the Pakistani military wants to establish an obedient government in Afghanistan – or, failing that, to preserve chaos in the country, to prevent it from becoming a threat. The Pakistani military sees the border dispute in Kashmir with India and Afghanistan as part of a broader regional competition. Therefore, for the Pakistani military, resolving both the Kashmir issue and the Afghan conflict are interrelated.

These interests hold important implications for Saudi Arabia, which has historically enjoyed close security and economic ties with Pakistan, India’s major rival. In recent years, the security relationship between Saudi Arabia and India has deepened. Plans are in motion for joint military exercises between Indian and Saudi Arabian forces. As the regional influence of both India and Saudi Arabia grows, a natural partnership may form where shared interests are concerned. At the same time, Pakistan will remain an important security ally of Saudi Arabia, and their economic relations will continue; however, strong structural incentives for closer ties between Riyadh and New Delhi will push the two together in the long run. As overarching security concerns and greater opportunities for economic engagement entice both sides, one could imagine a future in which  New Delhi will overtake Islamabad and become the primary regional ally of Saudi Arabia.

A New Role for India: Active Engagement and Regional Foreign Policy

India has also sought to position itself as a hub for regional diplomacy. One week after hosting the U.S. and Russian intelligence chiefs, New Delhi is preparing for a visit by the Iranian and Saudi foreign ministers, to hold wide-ranging talks on Afghanistan and regional developments. Evidence of diplomatic outreach from rival countries in West Asia indicates that all of India’s partners seek to negotiate through Indian leadership.

Any profound change in government—such as the rise of the Taliban in Afghanistan—will inevitably cause neighboring states to monitor regional developments. Shared national interests like regional security, counterterrorism, and energy security have played an important role in facilitating cooperation between Saudi Arabia and India in recent years. The possibility of affecting Afghan developments in Indian Kashmir, the future of the Tajikistan-Afghanistan-Pakistan-India (TAPI) pipeline project and insecurity in some Indian border areas have prompted New Delhi to engage in active diplomacy and seek new partnerships. India can also play a role in reducing tensions between Iran and Saudi Arabia, thereby promoting security in the Gulf. For that reason, Saudi Arabia and India will likely continue to deepen their diplomatic, economic, and security ties and form a lasting and productive partnership.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.