India Saudi Arabia Relations | 21 Sep 2022

For Prelims: Countries neighbouring Saudi Arabia, Trade with Saudi Arabia

For Mains: India- Saudi Arabia Relations

Why in News?

Recently, the Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles visited Saudi Arabia to attend the Ministerial meeting of the India-Saudi Arabia Strategic Partnership Council.

What are the Key Outcomes of the Meeting?

  • Streamlining efforts to carry out the declaration of investments of USD $100 billion in India made by Saudi Arabia in February 2019.
  • Endorsement of the 41 areas of cooperation identified by the technical teams under the 4 broad domains of:
  • A commitment to carrying out important projects in a timely way. The following are some of the priority areas for cooperation:
    • Digital fintech sector cooperation through the operationalization of Unified Payments Interface (UPI) and Rupay Card in the Kingdom of Saudi Arabia.
    • Reiteration of commitment to ongoing collaboration on joint projects, such as the construction of a refinery on the West Coast, an investment in Liquefied Natural Gas (LNG) infrastructure, and the creation of strategic petroleum storage facilities in India.
  • Discussions were also held on:
    • Institutional tie-up of the EXIM banks of the two countries,
    • Mutual recognition of standards,
    • Establishment of startup and innovation bridge,
    • Strengthening collaboration in infrastructure development, particularly in the domains of construction,
    • Railways etc.

What is the India-Saudi Arabia Strategic Partnership Council?

  • The Strategic Partnership Council was instituted in October, 2019 during the visit of the Prime Minister of India to the Kingdom of Saudi Arabia.
  • It has two main pillars:
    • Political, Security, Social and Cultural Committee
    • Committee on Economy and Investments
  • India is the fourth country with which Saudi Arabia has formed such a strategic partnership, after the UK, France and China.

How has India’s Relations with Saudi Arabia been?

  • Oil & Gas:
    • Saudi Arabia is currently India’s second-largest supplier of crude oil (Iraq has been India's top supplier).
      • India imports around 18% of its crude oil requirement and around 22% of its Liquified Petroleum Gas (LPG) requirement from Saudi Arabia.
    • Saudi Arabia will assist in setting up the world's largest greenfield refinery at Raigarh in Maharashtra by Saudi Aramco, Adnoc of the United Arab Emirates and Indian public sector oil companies.
  • Bilateral Trade:
    • Saudi Arabia is India’s fourth largest trade partner (after the USA, China and UAE).
    • In FY 2021-22, bilateral trade was valued at USD 42.8 billion.
      • India’s imports from Saudi Arabia reached USD 34.01 billion and exports to Saudi Arabia were worth USD 8.76 billion. An increase of 49.5% over 2021.
      • Total trade with Saudi Arabia accounted for 4.14% of India’s total trade in FY 2021-22.
  • Indian Diaspora:
    • The 2.6 million-strong Indian community in Saudi Arabia is the largest expatriate community in the Kingdom and is the ‘most preferred community’ due to their expertise, sense of discipline, law-abiding and peace-loving nature.
  • Cultural Linkages:
    • Haj pilgrimage is another important component of bilateral relations between India and Saudi Arabia.
  • Naval Exercise:

Way Forward

  • India can utilize the friendly relations with Saudi Arabia by convincing the kingdom to exercise its influence over Pakistan in controlling the Taliban in Afghanistan.
    • A joint collaborative effort of both economies will transform the Southwest Asia sub-region.
  • Currently, India has a trade deficit of USD 25.25 billion with Saudi Arabia. India should focus more upon promoting exports in various sectors. It would enable us to maintain the trade balance with the kingdom while building healthy trade relations.

UPSC Civil Services Examination Previous Year Question (PYQ)


Q. Which of the following is not a member of ‘Gulf Cooperation Council’? (2016)

(a) Iran
(b) Saudi Arabia
(c) Oman
(d) Kuwait

Ans: (a)


  • The Gulf Cooperation Council (GCC) is an alliance of 6 countries in the Arabian Peninsula – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Iran is not a member of the GCC.
  • It was established in 1981 to promote economic, security, cultural and social cooperation between the members and holds a summit every year to discuss cooperation and regional affairs.
  • Therefore, option (a) is the correct answer.


Q. The question of India’s Energy Security constitutes the most important part of India’s economic progress. Analyse India’s energy policy cooperation with West Asian countries. (2017)

Source: PIB