India-Saudi Arabia Relations Strengthening Introduction 

• Prime Minister Narendra Modi’s recent state visit to Saudi Arabia in April 2025 marked a significant milestone in the diplomatic and strategic relations between the two countries. 
• The visit, which focused on expanding bilateral cooperation in areas such as energy, digital infrastructure, pharmaceuticals, and labour welfare, was cut short following the Pahalgam terror attack. 
• Nevertheless, the visit underscored the importance of India-Saudi Arabia relations and their shared commitment to regional peace, security, and economic growth. With strong ties built over decades, India and Saudi Arabia continue to deepen their collaboration, offering new avenues for mutual benefit.

A Brief History of India-Saudi Arabia Relations

• Diplomatic Ties Established in 1947: The relationship between India and Saudi Arabia dates back to 1947, when diplomatic relations were formally established. The warmth between the two nations was evident in early high-level exchanges, such as King Saud of Saudi Arabia’s visit to India in 1955 and Prime Minister Jawaharlal Nehru’s visit to the Kingdom in 1956. These visits marked the beginning of a cordial relationship based on mutual respect and cooperation.

• Tensions During the Cold War: During the Cold War, the relationship between India and Saudi Arabia cooled as Saudi Arabia aligned itself with the United States, while India followed a policy of non-alignment. Additionally, geopolitical events like the 1971 defeat of Pakistan, the oil crisis of 1973, and the Soviet intervention in Afghanistan contributed to a decline in diplomatic exchanges. These factors resulted in a period of strained relations and reduced engagement between the two countries.

•  The 2006 Visit of King Abdullah: A significant turning point came in January 2006 when King Abdullah bin Abdul-Aziz of Saudi Arabia visited India. This was the first visit by a Saudi monarch in 51 years, highlighting a renewed commitment to strengthening bilateral ties. The Delhi Declaration 2006 was signed during this visit, focusing on the following key areas:

• • • Energy cooperation
    • Trade and commerce
    • Science and technology
    • Education
    • Health

• The Riyadh Declaration 2010: In 2010, the Riyadh Declaration built upon the Delhi Declaration of 2006, further strengthening bilateral cooperation in areas such as counter-terrorism, money laundering, narcotics, arms trafficking, and defence. This was a pivotal step in deepening the security and strategic relationship between the two countries. As the security landscape in the Middle East continued to evolve, India and Saudi Arabia recognized the importance of cooperating on these critical issues.

• Recent Engagements and High-Level Visits: India-Saudi Arabia relations saw further deepening with several high-level visits and engagements. Prime Minister Narendra Modi’s visit to Riyadh in 2016 and his meeting with Saudi Crown Prince Mohammed bin Salman at the 2018 G-20 summit in Argentina highlighted the growing importance of this bilateral relationship. Following these visits, the Strategic Partnership Council (SPC) was established to formalize and institutionalize cooperation across multiple sectors.

Key Areas of Cooperation Between India and Saudi Arabia

• Energy Cooperation: Energy remains the cornerstone of India-Saudi Arabia relations. Saudi Arabia is one of India’s largest suppliers of crude oil, which plays a crucial role in meeting India’s energy needs. In addition to oil, both countries are exploring ways to enhance collaboration in renewable energy and clean energy technologies, addressing global climate change challenges while also securing energy supply chains.

• • • Recent Developments: The signing of MoUs during PM Modi’s 2025 visit focused on expanding cooperation in the energy sector, particularly in renewable energy and energy storage solutions.

• Digital Infrastructure and Technology: India and Saudi Arabia are enhancing cooperation in the field of digital infrastructure, a key area of growth. Both countries are keen on leveraging their technological strengths, particularly in cybersecurity, artificial intelligence, smart cities, and innovation.

• • • Recent MoUs: The April 2025 visit saw agreements aimed at enhancing technology transfer and collaboration in cybersecurity, 5G technology, and digital innovation.

• Pharmaceuticals and Healthcare: India, as a global leader in the production of generic medicines, plays a key role in supplying affordable pharmaceuticals to Saudi Arabia. The two countries are also collaborating in healthcare infrastructure, medical research, and pharmaceutical production.

• Labour Welfare and Migration: Labour migration is a critical aspect of the India-Saudi Arabia relationship, with millions of Indian workers contributing to Saudi Arabia’s economy. In 2025, both nations focused on improving labour welfare by enhancing the protection of workers’ rights, ensuring better living conditions, and addressing labor mobility issues.

• • MoUs Signed: The 2025 visit saw agreements focused on improving the living conditions of Indian workers in Saudi Arabia, as well as enhancing cooperation in skilling and labour market regulation.

Significance of India-Saudi Arabia Relations

• Geo-Political Significance of India-Saudi Arabia Relations:

• Saudi Arabia’s Growing Geopolitical Importance Saudi Arabia has emerged as a key player in regional and global geopolitics. Its influence extends significantly within the Middle East, especially in the context of the Israeli-Palestinian peace process and its strong ties with major world powers such as the United States, Russia, China, and the European Union. This growing geopolitical profile has led to deepening India’s geopolitical engagement with Saudi Arabia.

• Countering China’s Influence: China has strengthened its geopolitical ties with Saudi Arabia, particularly through initiatives such as the reconciliation between Saudi Arabia and Iran. As China’s influence in the Middle East expands, it becomes increasingly important for India to engage strategically with Saudi Arabia to counterbalance China’s growing presence in the region.

• Geo-Strategic Significance:

• Counter-Terrorism Cooperation: Saudi Arabia has substantial influence over Pakistan, and this gives India an opportunity to engage Saudi Arabia in addressing terrorism and security concerns. Saudi Arabia has shown a strong understanding of India’s counter-terrorism efforts and has cooperated with India in tackling global threats, including the Pahalgam terror attack, which Saudi Arabia condemned.

• Defence Cooperation: While Saudi Arabia has limited experience in confronting threats like the Houthi militias in Yemen, India and Saudi Arabia have conducted joint military exercises focused on countering terrorism, particularly in mountainous areas near Yemen. Both countries are also exploring joint development and production of defence equipment.

• Combating Piracy and Protecting Oil Routes: Piracy in the Gulf of Aden and surrounding regions remains a significant threat to international maritime trade, especially in the Strait of Hormuz, a critical artery for the world’s oil supply. India and Saudi Arabia have strengthened naval cooperation with joint exercises like Al Mohed al Hindi to safeguard the region’s vital sea lanes.

• Geo-Economic Significance: 

• Energy Security: Saudi Arabia is one of India’s top sources of crude oil and natural gas, supplying more than 17% of India’s crude oil and 32% of its LPG requirements. As the global energy landscape shifts due to sanctions on Iran, Saudi Arabia has further strengthened its position as a reliable partner in India’s energy security. Additionally, both countries are expanding their cooperation in renewable energy, especially green hydrogen.

• Saudi Arabia’s Vision 2030: Saudi Arabia’s Vision 2030 is a comprehensive plan to diversify its oil-dependent economy by attracting tourism, foreign investment, and transforming the kingdom into a global hub for business and culture. India’s technological expertise and support in executing this vision open up significant opportunities for Indian businesses, especially in the IT sector and infrastructure development.

• Investment Opportunities: Saudi Arabia is home to one of the world’s largest sovereign wealth funds and is committed to investing in India, particularly in critical sectors such as energy, infrastructure, technology, and health. The Saudi oil giant Aramco has already invested in major Indian projects, such as the $44 billion Ratnagiri project in Maharashtra. With a commitment of up to USD 100 billion in investments, Saudi Arabia plays a crucial role in boosting India’s infrastructure development and economic growth.

• Bilateral Trade Growth: India is Saudi Arabia’s second-largest trade partner, while Saudi Arabia ranks as India’s fourth-largest trade partner. In FY 2022-23, bilateral trade between the countries was valued at $52.76 billion and is expected to grow further in the coming decades.

• Cultural Significance: 

• Cultural and Religious Connections: Saudi Arabia holds deep cultural and religious significance for India, particularly through its facilitation of the Hajj pilgrimage, which annually hosts more than 175,000 Indian pilgrims. This religious connection underscores the cultural ties between the two nations.

• The Indian Diaspora:  The Indian diaspora in Saudi Arabia, comprising 2.7 million people, is the largest expatriate community in the kingdom. Indian expatriates are highly regarded for their contributions to Saudi society, and they play a vital role in soft power diplomacy. The remittances sent by this community amount to over USD 11 billion annually, bolstering India’s economy.

• Growing Cultural and Tourism Exchanges: In line with Saudi Arabia’s Vision 2030, cultural and tourism exchanges between India and Saudi Arabia are expanding. These exchanges encompass various sectors, including film, education, and tourism, opening up new avenues for collaboration in the years to come.

Challenges in India Saudi Arabia Relations

• Complexity of Middle East Politics: The Middle East is known for its complex and multidimensional politics, which often creates challenges for countries like India that seek to maintain balanced relationships in the region. Saudi Arabia’s influence in the region is immense, but it is entangled in several rivalries and conflicts, such as the ongoing Saudi-Iran rivalry and Saudi-Israel animosity.

• • • India faces a delicate situation in managing relations with Saudi Arabia, while also maintaining its ties with countries like Iran. For instance, India’s involvement in the development of the Chabahar Port in Iran is an essential project for regional connectivity, but Saudi Arabia’s rivalry with Iran can sometimes complicate India’s diplomatic position.

• Saudi Arabia–Pakistan Relations: Saudi Arabia has long maintained a deep historical relationship with Pakistan, offering substantial military and financial support. While Saudi Arabia’s support for Pakistan has economic and strategic significance, it sometimes leads to friction with India, particularly in the context of counter-terrorism.

• Labour and Migration Issues: India’s large expatriate community in Saudi Arabia—numbering over 2.6 million—contributes significantly to both countries’ economies. However, this community faces challenges related to working conditions, wage disputes, and limited legal recourse, particularly under the former Kafala system. While Saudi Arabia has begun reforms, ensuring the welfare and protection of these workers remains a top priority for India.

• • • Nitaqat Program: In 2011, Saudi Arabia introduced the Nitaqat program, aimed at increasing employment for Saudi nationals in the private sector. However, this policy has created challenges for the large expatriate community, including many Indians, who feel sidelined by the changes.

• The “Asian Premium” on Oil: The Asian Premium is an additional charge levied by OPEC countries, including Saudi Arabia, on oil exports to Asian countries, including India. The premium, which often exceeds $10 per barrel, has been a point of contention between India and oil-exporting nations, particularly Saudi Arabia.

• • While Saudi Arabia has reduced the Asian premium charged to India from $10 per barrel to $3.5 per barrel, India continues to push for the complete elimination of the premium, particularly as it sources oil from countries like Russia, which does not apply such charges. Despite some reduction in the premium, this remains an ongoing issue in bilateral relations, as India seeks fairer pricing from its oil suppliers.

• Trade Deficit: India consistently experiences a significant trade deficit with Saudi Arabia, primarily due to its reliance on Saudi crude oil imports. The trade deficit in FY 2023-24 reached approximately USD 20 billion, and this imbalance presents a challenge in deepening economic ties. Saudi Arabia’s exports to India, primarily crude oil, far exceed India’s exports to Saudi Arabia, creating a persistent trade imbalance that both countries are working to address.

• The Kashmir Issue: Occasionally, Saudi Arabia, as a member of the Organization of Islamic Cooperation (OIC), has issued statements supporting Pakistan’s stance on the Kashmir issue. While these statements have been less frequent in recent years, they have historically been a source of tension between India and Saudi Arabia, particularly as India seeks international support for its position on Kashmir.

• China’s Growing Influence in Saudi Arabia: Saudi Arabia’s growing relationship with China in areas such as energy deals, investment, and security cooperation poses a potential challenge for India. As China deepens its presence in Saudi Arabia, it can dilute India’s influence in the region, particularly in matters related to regional security and economic cooperation.

• Maritime Security Challenges: Maritime security in the Gulf of Aden and Strait of Hormuz remains a critical challenge for both India and Saudi Arabia. Piracy, terrorism, and the threats posed by non-state actors in these crucial sea lanes pose risks to both nations’ economies and security. 

Key Government Initiatives to Strengthen India-Saudi Arabia Relations

• • India’s Look West Asia Policy (2005): India’s Look West Asia Policy was formulated to strengthen its relations with countries in the Middle East, including Saudi Arabia, Iran, and Israel. The policy aims to promote economic, political, and cultural ties while enhancing cooperation in areas such as trade, energy, security, and technology.
  • Strategic Partnership Council (SPC) – Established in 2019: The Strategic Partnership Council (SPC) was established as a high-level mechanism to guide bilateral cooperation in multiple sectors. Co-chaired by the Prime Ministers of both countries, the SPC includes four ministerial committees covering areas such as defence, tourism, and culture. This institutional framework ensures the continued growth of relations.
  • Joint Statements and Declarations: The Delhi Declaration (2006) and Riyadh Declaration (2010) have elevated the India-Saudi Arabia relationship to a strategic partnership. The recent Joint Statement during PM Modi’s April 2025 visit outlines a roadmap for the future direction of the partnership.
  • High-Level Visits: Frequent high-level visits between ministers and leaders of both countries help ensure the implementation of agreements and provide a platform for the discussion of new initiatives.
  • Multilateral Cooperation: India and Saudi Arabia continue to collaborate in multilateral forums such as the G20, BRICS+, and the UN, addressing a range of global issues and promoting mutual interests.

• Joint Refinery and Petrochemical Projects:
  India and Saudi Arabia are collaborating on two major refinery and petrochemical projects in India, aimed at enhancing energy cooperation and infrastructure integration between the two nations.

• • Electricity Grid Interconnectivity : Feasibility studies are underway to establish electricity grid interconnectivity between India, Saudi Arabia, and the broader Middle East region. This initiative reflects both countries’ commitment to strengthening energy cooperation and creating a more sustainable and integrated energy system.
  • Renewable Energy and Green Hydrogen: Both countries are collaborating on green hydrogen, solar energy, and wind energy projects, with Saudi Arabia committing $12 billion to India’s renewable energy initiatives. This partnership is also aligned with the goals of the International Solar Alliance.
  • High-Level Task Force on Investment (HLTF): The HLTF was created to facilitate Saudi Arabia’s planned investment of USD 100 billion in India, focusing on sectors like energy, infrastructure, technology, and health.
  • Fintech and Digital Infrastructure Cooperation: India and Saudi Arabia are working together in fintech and digital infrastructure, including the UPI integration and the development of digital public platforms to enhance cross-border payments and financial cooperation.
  • Skill Verification Program: A Skill Verification Program was signed between India’s Ministry of Skill Development and Saudi Arabia’s Ministry of Human Resources to streamline the employment process for Indian workers in Saudi Arabia and ensure their skillsets are recognized and verified.
  • Joint Military Exercises: India and Saudi Arabia have conducted several joint military exercises, including the EX-SADA TANSEEQ land exercise (2024) and the Al Mohed Al Hindi naval exercise, aimed at improving counter-terrorism capabilities and maritime security cooperation.
  • Counter-Terrorism Cooperation: Both countries have shared intelligence and cooperated on counter-terrorism issues. A key example is the joint condemnation of the Pahalgam terror attack in April 2025, highlighting their commitment to fighting terrorism globally.
  • Bilateral Haj Agreement: India and Saudi Arabia have an annual Haj agreement that allows over 1.75 lakh Indian Muslims to perform the pilgrimage each year. The agreement also includes provisions to assist women pilgrims without a Mehram (male guardian).
  • Yoga Diplomacy: In 2017, Saudi Arabia officially recognized Yoga as a sport. The growing popularity of Yoga in the Kingdom underscores the strengthening of cultural exchanges between India and Saudi Arabia.
  • Cultural Exchange Programs: Under Saudi Vision 2030, initiatives to promote literature, performing arts, tourism, and educational exchanges are expanding. This cultural engagement fosters better mutual understanding and ties between the people of both nations.
  • Space Cooperation: An MoU between the Saudi Space Agency and India’s Department of Space aims to promote cooperation in the peaceful uses of space, including satellite technology and space exploration.
  • Technology and Innovation: India and Saudi Arabia are collaborating in emerging technologies such as AI, blockchain, and other advanced fields, with a particular focus on developing a Digital Silk Road that enhances connectivity between the two nations.
  • Healthcare Cooperation: Both countries have signed MoUs on healthcare cooperation, focusing on issues like antimicrobial resistance and medical product regulation to strengthen healthcare systems and public health initiatives.

• India-Middle East-Europe Corridor Announced during the G20 summit, the India-Middle East-Europe Corridor is an ambitious project aimed at creating a rail and shipping corridor linking India with the Middle East and Europe. This initiative will not only enhance trade and logistics but also strengthen political cooperation between India and Saudi Arabia.

Way Forward 

• Enhancing Economic and Investment Ties: 

• • • Diversify Trade Basket: India should aim to diversify its trade with Saudi Arabia beyond crude oil to include sectors such as technology, pharmaceuticals, food processing, textiles, and engineering goods. Joint ventures and manufacturing partnerships should be explored.
    • Greater Economic Integration: Encouraging the shift of certain labor-intensive establishments to India could reduce Saudi Arabia’s expatriate population while mitigating the need for Nitaqat Policies.
    • Bilateral Investment Treaty and FTA: Negotiating a Bilateral Investment Treaty (BIT) and pushing for a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) could significantly enhance economic cooperation.
    • Explore Local Currency Trade: Exploring trade in local currencies (Rupee and Riyal) can reduce dependency on the US dollar and lower transaction costs, strengthening bilateral financial ties.

• Strengthening Energy Partnership:

• • • Comprehensive Energy Cooperation: India and Saudi Arabia should expand their energy cooperation beyond crude oil, exploring joint ventures in refineries, petrochemical complexes, and strategic petroleum reserves.
    • Green Hydrogen & Solar Energy: Leveraging Saudi Arabia’s desert landscapes and India’s expertise in solar energy, the two countries can create a global green energy hub, focusing on grid interconnectivity and joint R&D in renewable energy.

• Deepening Defence and Security Cooperation:

• • • Institutionalize Defence Collaboration: Formalizing defence collaboration through regular joint military exercises, personnel exchanges, and joint training programs will enhance the defence partnership between India and Saudi Arabia.
    • Promote Defence Industry Cooperation: Encouraging defence research, technology transfer, and joint manufacturing in line with India’s “Make in India” initiative will strengthen the defence ties.
    • Enhance Cybersecurity Cooperation:
      With increasing reliance on digital infrastructure, establishing mechanisms for information sharing, joint training, and cooperation in addressing cyber threats will be critical.
    • Strengthen Counter-Terrorism and Intelligence Sharing: Continued cooperation in combating terrorism, extremism, and terror financing will strengthen India-Saudi Arabia relations in the global security landscape.

• Enhancing Multilateral and Regional Cooperation: 

• • • Coordinate on Global Issues: Continue to work closely on global issues in multilateral forums like the G20, BRICS+, and the UN, with a focus on promoting a rules-based global order.
    • Promote Regional Stability: India and Saudi Arabia should work together to promote peace and stability in South Asia and the Middle East, using diplomatic initiatives and dialogue.

• Prioritize Diaspora Welfare: 

• • • Labour Reforms: India should advocate for further reforms in the Kafala system to protect the welfare of Indian workers in Saudi Arabia, ensuring wage protection and faster dispute resolution.
    • Hajj Facilitation: Negotiating an expanded Hajj quota and streamlining the pilgrimage process will strengthen the cultural ties between the two nations.

• IMEC Implementation and Space Cooperation:

• • Accelerate IMEC: The India-Middle East-Europe Corridor (IMEC) should be expedited to improve connectivity, trade routes, and logistical hubs.
  • Space Cooperation: With India’s growing space capabilities, space cooperation between the newly established Saudi Space Agency and ISRO holds great potential for scientific collaboration.