Why it is in News?

Saudi Arabia’s Crown Prince Mohammed bin Salman Al Saud and Prime Minister Narendra Modi held extensive talks on Monday, agreeing to expand trade and security ties. The leaders also co-chaired the first summit-level meeting of the India-Saudi Arabia Strategic Partnership Council (SPC).

What is India-Saudi Arabia Strategic Partnership Council (SPC)?

• The agreement to create the SPC was inked during Prime Minister Modi's official visit to Saudi Arabia in October 2019. This partnership was conceived to establish a top-tier council to guide and enhance the Indo-Saudi relationship.
• Key Pillars:
• The SPC operates through two primary pillars:
• Committee on Political, Security, Social, and Cultural Cooperation.
• Committee on Economy and Investments.
• These sub-committees engage at four distinct levels:
• Summit Level (Involving the Prime Minister and Crown Prince)
• Ministerial Level
• Senior Officials' Meetings
• Joint Working Groups (JWGs)

Key Highlights From the Recent Meeting Between Saudi's Crown Prince Mohammed bin Salman and PM Modi:

• Notable Developments:
• Advancing the $50-billion West Coast refinery project, a massive undertaking with a capacity of 60 million tonnes.
• It will be a refinery and petrochemical complex situated on the Maharashtra coast.
• Identifying energy, defense, semiconductors, and space as sectors where cooperation will be intensified.
• Recognizing various other areas of collaboration, including security, education, technology, transportation, healthcare, tourism, and culture.
• Expanding the Relationship:
• Both parties agreed to transform their existing hydrocarbon relationship into a more comprehensive energy partnership.
• Signed Agreements:
• Additionally, eight agreements were formally signed to enhance cooperation in various domains, encompassing digitization and investment.

India-Saudi Arabia Bilateral Relations:

• India and Saudi Arabia share warm and amicable bilateral relations that are a testament to their deep-rooted economic and socio-cultural connections spanning centuries.
• These relations were formalized with the establishment of diplomatic ties in 1947, and since then, both nations have engaged in high-level exchanges and visits.

The Economic Cooperation Between India and Saudi Arabia:

Trade:

• In the fiscal year 2022-23, the bilateral trade volume between India and Saudi Arabia surged to a historic high of $52.75 billion.
• India's exports to Saudi Arabia saw significant growth, reaching $10.7 billion, compared to $8.8 billion in 2021-22.
• India stands as the second-largest trading partner for Saudi Arabia, while Saudi Arabia ranks as the fourth-largest trading partner for India.

Investment:

• Indian investments in the Kingdom of Saudi Arabia have now reached approximately USD 2 billion.
• Saudi Arabia, on the other hand, is recognized as the 18th largest investor in India, with investments amounting to $3.14 billion as of March 2022.
• During the visit of the Saudi Crown Prince to India in February 2019, he made a significant announcement of the Kingdom's plans to invest a substantial sum of US $100 billion across various sectors in India.

Energy Partnership Between India and Saudi Arabia:

Vital Energy Collaboration:

• Energy collaboration stands as a foundational element of the bilateral relationship between India and Saudi Arabia, playing a crucial role in ensuring India's energy security.
• Saudi Arabia maintains its position as one of India's key partners in the sourcing of crude oil and petroleum products.

Crucial Import Destination:

• During the fiscal year 2022-23, Saudi Arabia retained its status as India's third-largest supplier of crude oil and petroleum products.
• India imported a substantial 39.5 million metric tonnes (MMT) of crude oil from Saudi Arabia in FY23, constituting 16.7% of its total crude oil imports.

LPG Contribution:

• India also benefitted from Saudi Arabia as a significant source of LPG (liquefied petroleum gas) imports, with 7.85 MMT of LPG imported from Saudi Arabia in FY23. This accounted for 11.2% of India's total petroleum product imports during that fiscal year.

Defense Partnership Between India and Saudi Arabia:

High-Level Engagement:

• In a significant diplomatic move, General Manoj Mukund Naravane, the Chief of Naval Staff of India, paid a landmark visit to Saudi Arabia in December 2020.

Naval Exercises:

• The two nations have successfully conducted two editions of their bilateral naval exercise titled 'Al Mohed al Hindi.'

Collaborative Defense Endeavors:

• India and Saudi Arabia are actively engaged in fostering collaboration within the realm of defense industries and capacity building, further strengthening their partnership in the defense domain.

Indian Community Living in Saudi Arabia:

• Prominent Expatriate Community:
• The Indian community in Saudi Arabia is a substantial one, numbering around 2.2 million people.
• This makes it the largest expatriate community within the Kingdom.
• Economic Contribution:
• Indians constitute approximately 7% of Saudi Arabia's total population, and they play a significant role in driving the country's economic growth.
• Migration Process Enhancement:
• During Prime Minister Modi's visit to Riyadh in October 2019, a noteworthy development was announced. India's e-Migrate system would be integrated with Saudi Arabia's e-Thawtheeq system, streamlining the migration process for workers.
• Hajj Pilgrimage:
• The annual Hajj pilgrimage holds immense importance in the Indo-Saudi bilateral relationship.
• During the visit of the Saudi Crown Prince to New Delhi in February 2019, it was revealed that India's Hajj quota would be expanded by 24,975 in 2019, allowing 200,000 Indians to partake in the Hajj pilgrimage in August 2019.

Recent Diplomatic Engagements:

• In 2019, the then Indian Prime Minister, Manmohan Singh, undertook a significant visit to Saudi Arabia, culminating in the signing of the 'Riyadh Declaration.'
• This landmark agreement elevated the bilateral relationship between the two nations to the status of a 'Strategic Partnership.'
• During Prime Minister Modi's visit to Saudi Arabia in 2016, King Salman bestowed upon him the Kingdom's highest civilian honor.
• In February 2019, Crown Prince Salman of Saudi Arabia visited India and announced the Kingdom's decision to invest approximately US$100 billion in India.

Later in the same year, during Prime Minister Modi's visit to Riyadh, the two nations signed the Strategic Partnership Council (SPC) Agreement, marking a pivotal moment in their diplomatic relations.