A New Era of Strategic Partnership

For a long time, the Kingdom of Saudi Arabia has been a strategic partner for India in the Middle East. The recent visit of the Indian prime minister further strengthened ties between the two at many levels, one of the most important being to improve the economic relationship between the two nations. According to recent Saudi Arabian Monetary Agency (SA MA) reports, Saudi imports of Indian goods stood at SR 18 billion (US $4.86 billion), making India the sixth-largest source of Saudi imports, accounting for 12.4 percent of the Kingdom’s total imports from Asia in 2008. Saudi Arabia comes fourth after China, the United States and the United Arab Emirates as India’s most important trading partner globally.

The presence of three senior ministers, top officials and several CEO s made the visit a very prestigious one indeed, coming four years after the historic visit of King Abdullah bin Abdulaziz of Saudi Arabia to India in 2006. The King’s visit resulted in Saudi Arabia replacing the UAE as India’s number one crude oil resource, with exports jumping from $500 million to $23bn in 2008. As India’s largest supplier of crude oil, Saudi Arabia is sure to benefit from increasing energy demand for one of the world’s largest economies.

The balance of trade between the two states has consistently swung in favor of the Kingdom, its trade surplus standing at SR 67.3 billion ($18.2 billion) in 2008. Indian Prime Minister Manmohan Singh was confident that India’s GDP will grow at 9 to 10 percent annually over the next 25 years and has sought Saudi investment in sectors ranging from infrastructure to hospitality. The two leaders emphasized “the importance of strengthening the strategic energy partnership based on complementarity and interdependence, as outlined in the Delhi Declaration (of 2006), including meeting India’s increasing requirement of crude oil supplies, and identifying and implementing specific projects for cooperation including in the areas of new and renewable energy.”

Both leaders also directed the Joint Working Group on Energy to continue adopting all appropriate means to achieve the same, the Riyadh Declaration said. King Abdullah later said that, “Prime Minister Manmohan Singh’s visit and the signing of a number of agreements and memorandums of understanding reflect a new era of strategic partnership between the two countries.” The prime minister was also conferred an honorary doctoral degree from King Saud University presented by the University Rector Abdullah Al-Othman. Later, the Indian External Affairs Minister, S.M. Krishna, called the visit “highly successful.”