Enhanced Saudi stakes in India will work better for Indian diplomacy

By Dr. Cauvery Ganapathy

March 19, 2019
New Delhi: India’s relations with Saudi Arabia since 2006 is an example of a dynamic that has enmeshed diversified strategic orientations successfully. While strengthening historical sinews, New Delhis ties with Riyadh over the years, has been unaffected by Indias strident forays into new partnerships in West Asia.

Simultaneously, the relation has also evolved over time into a diversified portfolio that subsumes a far wider range of issues than energy and diaspora issues alone. Home to a 2.7 million strong Indian diaspora, as India’s fourth largest trading partner and consistent as one among its three largest suppliers of oil , Saudi Arabia’s relevance to the Indian economy is indisputable.

This is, however, an old tale. What Crown Prince Mohammed bin Salman’s visit, it was hoped, would consolidate was a more recent role as a strategic partner. Much in the visit touched upon that hope. In addition to the creation of a Strategic Partnership Council, Memorandums to facilitate cooperation between the two sides were signed on a diverse range of concerns such as-

– The National Investment and Infrastructure Fund
– Tourism
– Housing
– Closer coordination through bilateral investment forums, and
– Broadcasting

Proclamations from MBS – as the Crown Prince is popularly known – alluding to an investment of nearly $200 billion in India over the next two years was also seen as a significant indication of Riyadh’s keenness in cultivating ties with New Delhi. Coupled with the general bonhomie and optimism that persisted, MBS’ visit does qualify as a successful bilateral meet.

However, it may be worthwhile to consider if the intrinsic value of the partnership could not, in fact, have been leveraged a bit more through themes such as:

Price Stabilisation -This would insulate India from the obvious and expected volatility of the energy markets. India offers an assured market for the mainstay of Saudi Arabia’s export basket and an agreement that would ensure price stabilisation for the commodity could, therefore, prove profitable to both the parties.

Abolition of the Asian Premium – The substantial volume of crude oil purchased by India translates into an import bill that is inflated. Removal of such a ‘premium’ would aid in reducing India’s import bill.

Allowing India a buy-in as a ‘cornerstone investor’ into ARAMCO, if and when it is launched, would signal a long-term commitment on part of both the States to strengthening of ties.

Enhanced defence cooperation between the two countries would not only prove beneficial but given regional realities, it would perhaps, prove more effective and binding to forge an institutional mechanism that could propel such a partnership forward.

Finally, there are two factors that New Delhi would perhaps do well to consider in cultivating the relations with the Saudis further-

– To express chagrin and seek to publicly push others to choose India over another country, however justified our own outrage, is not perhaps a very fruitful expression of diplomacy or international politics. It would bode us better to strengthen the invested stake of a country like Saudi Arabia in our own welfare by making the economic and strategic ties too robust to override in times of localized or international conflict; and an integration of economic and security interests does this better than well-meaning but hyperbolic expressions of expectations in the media.

– Indian energy diplomacy has long been plagued by a belated undertaking of due diligence back home before the concluding of agreements with foreign countries. The fact that the massive Saudi investment in Ratnagiri, Maharashtra is now caught in the crosshairs of local politics and land acquisition issues, is just one more example of this tendency. It is true that countries are always appreciative of and seek out lucrative and large markets such as India. That does not, however, imply that sovereign wealth-fund owners such as Saudi Arabia would carry an unending reservoir of patience regarding commitments coming to fruition.

(Dr. Cauvery Ganapathy is a Research Analyst with subject expertise in energy security. She is a recipient of the Fulbright-Nehru Doctoral Fellowship to the University of California, Berkeley. The views expressed are personal.)

NIFTY scales new heights, expect Sensex to follow this time around

Mumbai: Markets were on a roll last week and even though there was extreme volatility, they continued their upward march. NIFTY has made a new high this week effectively on...

Decline in FPI equity outflows despite rising bond yields in US

New Delhi: An interesting feature of the FPI trend recently is the decline in FPI equity outflows despite the rising bond yields in the US, says V K Vijayakumar, Chief...

Quickly addressed the issue: Google on ‘illegal’ AI responses to questions on PM Modi

New Delhi: Google on Saturday said that it has worked “quickly to address” the responses generated by its Artificial Intelligence (AI) platform Gemini regarding Prime Minister Narendra Modi. The IT...

Absolutely captivating chat: Gautam Adani, Uber CEO discuss future collaborations

New Delhi: Adani Group Founder and Chairman Gautam Adani on Saturday met Uber's global CEO Dara Khosrowshahi and discussed future collaborations in India, as the country doubles down on green...

Nifty touches fresh record high on strong global cues

Mumbai: In a volatile session, Nifty ended in the green on Thursday, touching a fresh record high helped by positive global cues, said Deepak Jasani, Head Retail Research at HDFC...

Gurugram: RERA imposes Rs 25L penalty on promoter for misleading DDJAY ad

Gurugram: The Haryana Real Estate Regulatory Authority (RERA), Gurugram, has imposed a penalty of Rs 25 lakh on the promoter of Yashvi Homes Private Limited for publishing a "misleading advertisement"...

Amazon plans to launch low-priced fashion vertical ‘Bazaar’ in India

New Delhi: E-commerce giant Amazon is set to launch a low-priced fashion and lifestyle vertical called 'Bazaar' in India. According to a communication the company has sent to its partners,...

India home to 247 mn entrepreneurial households driving $8.8 trillion transaction value

Mumbai: India is home to at least 247 million entrepreneurial households who will be the drivers of India's next economic wave, driving an $8.8 trillion transaction value in FY23, a...

Nifty hit six new record highs this year indicating India’s bull market

New Delhi: This year alone, Nifty has set six new record highs during intraday trade and this is indicative of the strong momentum in the market, says V K Vijayakumar,...

Govt brings small fishermen on board e-market, consumers to get direct access

New Delhi: The Department of Fisheries on Monday signed a Memorandum of Understanding (MoU) with Open Network for Digital Commerce (ONDC) to promote digital marketing of fish and other aquatic...

BSE market cap hits record high of $ 4.7 trillion

Mumbai: The BSE market cap touching a record high of around $4.7 trillion reflects the strength of the ongoing bull run and the momentum in the market, said V.K. Vijayakumar,...

Financial savings by Indian households shift away from bank deposits to capital markets

New Delhi: Financial savings by Indian households have shifted away from the conventional bank (including non-bank) deposits to capital markets, BofA Securities said in a report. The former accounted for...

Read Previous

Putin signs laws on curbing fake, offensive news

Read Next

Government capable of retaliation: NSA Doval

Leave a Reply

Your email address will not be published.

WP2Social Auto Publish Powered By : XYZScripts.com