Realism and rapport: Strengthening India-Saudi Arabia ties
Two decades ago, King Abdullah bin Abdulaziz al-Saud’s visit to New Delhi marked a pivotal moment in the evolution of India-Saudi Arabia relations. Since then, the relationship has developed into a comprehensive and multifaceted bilateral relationship, strengthened by economic cooperation and strategic collaboration across various sectors.
This bilateral partnership has been largely driven by the exceptional rapport and mutual trust between Prime Minister Narendra Modi and Saudi Arabia’s Crown Prince Mohammed bin Salman al-Saud. Their shared political will, rooted in a pragmatic and realistic approach, has played a pivotal role in fostering cooperation across diverse sectors.
This dynamic relationship reflects a commitment to addressing shared challenges and capitalising on opportunities for mutual growth and prosperity, strengthening their position as key players on the global stage.
PM Modi's latest visit to Saudi Arabia from April 22-23—his first in more than five years—will include a meeting of the Strategic Partnership Council in Jeddah, the kingdom's commercial hub. During his 2016 visit, he was awarded the Kingdom's highest civilian honor, the Order of Abdulaziz al-Saud. In 2019, Crown Prince Salman visited India in February, followed by Modi's reciprocal visit in October. That year, both nations established the Strategic Partnership Council, a facilitating mechanism to steer bilaterals.
The two leaders have met seven times before 2025, most recently at the G20 Summit in New Delhi in September 2023. During the summit, the Saudi leader participated in launching the India-Middle East-Europe Economic Corridor, an initiative that promises tremendous prospects for trade, infrastructure, and energy cooperation across Asia and Europe.
Amid declining oil prices and recession in the Chinese market, coupled with the focus on Evs, Saudi Arabia —accounting for 18% of India's LPG imports—is eyeing to increase its supplies of crude to India. The Kingdom has indicated interest in investing in oil refineries in eastern and western India, according to energy experts.
India's refinery expansion plans have revived Saudi Aramco's interest in investing in BPCL and ONGC projects. The Saudi Crown Prince unveiled plans for $100 billion of investments during a visit to India in 2019, though this is yet to materialise.
One of the issues flagged by the Saudi side is the taxation of investments. Saudi's total investments in India, including those of sovereign wealth funds, are worth about $10 billion.
Defence ties, technology transfers, joint ventures, and expertise sharing, with a strong focus on localising defense production, will likely remain high on the agenda during PM Modi’s visit. Saudi Arabia's Vision 2030 targets 50% localisation of defence spending, while India, having localised many defence technologies, is eager to share its expertise. Advocating an ‘invest, trade, localise’ approach, India has opened its defence sector to Saudi investment.
Saudi Arabia has procured the 155mm Advanced Towed Artillery Gun System (ATAGS) from Bharat Forge and is evaluating additional artillery systems from Indian manufacturers. Last year, Saudi Arabia signed a $250 million ammunition contract with Munitions India Limited. Saudi companies have also expressed interest in partnerships for shipbuilding, electronics, artificial intelligence (AI), and cybersecurity.
Joint military exercises further highlight growing cooperation between the two countries. The inaugural joint military exercise, Sada Tanseeq, took place in Rajasthan in 2024. The bilateral naval exercise, ‘Al Mohed Al Hindi', began in 2022, while Saudi Arabia participated as an observer in India's largest air exercise, ‘Tarang Shakti.’
With India having the world’s third-largest Muslim population, Saudi Arabia holds strategic importance due to the presence of Islam’s holiest sites, Mecca and Medina, further deepening the cultural and religious ties between the two nations. The kingdom is a significant source of foreign remittances, contributing up to $11 billion annually to India's economy.
Over the years, economic ties between India and Saudi Arabia have strengthened, driven primarily by increased oil imports. According to sources, Saudi Arabia seeks a Bilateral Investment Treaty (BIT) with India, as a prerequisite to advancing a Free Trade Agreement (FTA).
However, India prefers to negotiate the BIT independently, separate from discussions on an FTA. This differing approach has led India to conclude that signing an FTA with the Gulf Cooperation Council (GCC) may not be feasible in the near future, prolonging the negotiations.
In 2023, India proposed an alternative approach, offering GCC member countries the option to negotiate individual FTAs instead of a collective agreement.
Notably, India has already established an FTA with the GCC member nation UAE. Indian companies like L&T, Tata Group, and Shapoorji Pallonji are actively participating in Saudi Arabia’s NEOM giga-project. The visit is anticipated to include talks aimed at broadening and deepening this collaboration.
Modi's visit amid significant geopolitical shifts has considerable contextual significance, particularly in economic and security domains. The world, particularly West Asia, faces conflicts exacerbated by economic tensions. The talks are anticipated to center around expanding areas of mutual cooperation, including enhancing joint training programs, facilitating technology transfer, and deepening the exchange of expertise.
Vaishali Basu Sharma is a strategic and economic affairs analyst.
India