Round The World

New Delhi, 3 March 2010

PM’s Saudi Visit

EXPANDING HORIZONS, OILING TIES

By Monish Tourangbam,

Research Scholar, School of International Studies, JNU

The recent three-day visit by Prime Minister Manmohan Singh to the oil-rich kingdom of Saudi Arabia can be assessed as a pragmatic step towards cementing international partnerships. The visit assumes importance in view of the developing situation in Afghanistan and the emerging dynamics in the trajectory of India-Pakistan relations. Singh’s visit is geared towards putting an end to speculation that the relations with the West Asian kingdom have been kept in the cold-storage. Singh resumed the State visit by becoming the third Prime Minister to visit Saudi Arabia since Jawaharlal Nehru in 1955 and India Gandhi in 1982. A rapidly growing economy like India accords much importance to this relationship in terms of the dividends that it will help bring to meet the country’s energy consumption.

The red-carpet that rolled out in honour of the Singh is symptomatic of the kind of relationship that the oil-rich kingdom wants to work on with India. The ties are mutual for if India needs Saudi Arabia to meets its energy consumption, the former too assumes importance in view of the its enviable market and the expertise that it can provide on various developmental fronts. One of the highpoints of the visit was the signing of the Riyadh Declaration between Singh and Saudi King Abdullah Bin Abdul Aziz. The declaration aims to cement ties and to raise bilateral cooperation to a strategic partnership covering security, economic, defence and political areas.

The occasion served the purpose of reviewing the status of implementation of the historic Delhi Declaration signed in 2006 during the significant visit of the Saudi king as the chief guest on the Republic Day celebrations. The one-day visit of Saudi foreign minister Prince Saud Al Faisal in December 2008 to convey his country’s  condemnation of the terror attack in Mumbai was a welcome gesture that should not be ignored.

In the post Cold-War scenario, power dynamics has been changing significantly in the international system and different regions around the world. As such, many countries including India and Saudi Arabia got engaged with coming to terms with the changed environment. But, the post-Cold War period also ushered in the liberalization of the Indian economy, leading to a changed perspective as far as investment opportunities in the country were concerned. Its rapid growth as one of the most important economies and markets in the world has inevitably brought in new needs and emerging opportunities.

A pragmatic and well-oiled relationship with Saudi Arabia assumes importance from the strategic, economic as well as the cultural point of view. Despite being a Hindu-majority state, India is home to a sizeable Muslim minority. The Saudi king being the custodian of the two Holy Mosques (Al-Masjid al-Ḥarām of Mecca and Al-Masjid al-Nabawi of Medina) attains a revered position in the Islamic world. Moreover, India in the present international system while diversifying its energy sources needs to cement its linkages with its traditional suppliers. In this context, ties with Saudi Arabia, the biggest oil exporter of the world cannot be jeopardized.

Thus, the recent visit by the Prime Minister has successfully managed to emphasize the importance to keep the channels of communication active with frequent visits of dignitaries. The camaraderie shared between the leaders from both the sides provides a perfect springboard for taking the relations to the next strategic level. The kingdom of Saudi Arabia is the biggest crude oil supplier to India and efforts are targeted to taking the ties beyond the buyer-seller relationship to what is being termed as comprehensive energy partnership.

According to sources, Saudi Arabia agreed to raise the crude supply to India from 25.5 million tonnes a year to 40 million tones. Addressing the Council of Saudi Chambers of Commerce and Industry, Singh had commented that Indian companies were well-equipped to participate in the upstream and downstream oil and gas sector projects in Saudi Arabia and focused on the need for new partnerships in the area of new and renewable energy, sharing clean technologies and joint collaboration.

India-Saudi Arabia bilateral trade reached almost $25 billion in 2008-09 and Indian investments there now stand at more than $2 billion covering over 500 joint ventures. RITES, a Government of India Enterprise, has also won a contract to participate in the North-South Railway project, an ambitious plan to connect some of the most inhospitable terrain in Saudi Arabia. Moreover, Saudi Aramco (Saudi Arabia’s national oil company) is reportedly setting up a procurement office in India worth an estimated $400 million. India reportedly is seeking to increase supply for three refinery projects at Paradip, Bhatinda and Bina.

The three new plants -- Indian Oil Corp.’s Paradip refinery in the eastern State of Orissa, Hindustan Petroleum Corp.’s unit at Bhatinda in northern Punjab and Bharat Petroleum Corp.’s Bina plant in central Madhya Pradesh -- will increase India’s refining capacity of 178 million tonnes a year by almost 20 per cent by the end of 2012. Saudi Arabia, also home to around 1.8 million Indian workforce provides huge foreign remittances.

New Delhi has also spoken of its willingness to share its expertise in the area of knowledge-based industries and human resource development. Indicative of the emphasis put on diversifying bilateral ties beyond the oil-sector, various agreements were signed in the areas of extradition, transfer of sentenced prisoners, scientific and technological cooperation, peaceful use of outer space, information sharing and Press exchanges, information technology, cultural exchange and advanced computing services.

Apart from the economics of the visit, the importance accorded to each other by the two countries should assume significance in view of the strategic and security challenges faced by India in the region. The close connection between Saudi Arabia and Pakistan is unquestionable and the kingdom also has stake in the developing scenario in Pakistan and Afghanistan. Evolving situations in the region demands efforts from New Delhi to extend its linkages and cement existing ties with friendly countries such as  Saudi Arabia. The recent attacks in Afghanistan have raised serious questions over the safety of Indians engaged in reconstruction and relief efforts in the war-country. A pattern is developing where India is increasingly being targeted for the contribution to the Afghan reconstruction, while talks of reconciling the illusionary “Good Taliban” are being flouted.

Further, India-Pakistan talks are at a crucial stage after a lull post the 26/11 Mumbai attacks. The talks might have not have achieved much in concrete terms but the fact that the two sides could sit and negotiate over the table after more than a year is an initiation to be built upon. In the context of these engagements and developments in the region, India-Saudi Arabia relations need to be given importance and the recent visit, even if late, has come at an opportune time. India, in its present position, needs to expand its horizon of engagements and work on the shared interest with different countries to develop long-term mutuality of purpose and avoid ad-hoc policies.—INFA

(Copyright, India News and Feature Alliance)

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