Why is the Saudi Crown Prince Mohammed bin Salman visiting India

Apart from courting diplomatic support by raising the issue of Pakistan-sponsored terrorism in India, PM Narendra Modi and MBS will explore ties in trade, defence, investment, and security.

By BusinessToday.In  
Tuesday, February 19, 2019

Saudi Crown Prince Mohammed bin Salman, also known as MBS, will arrive on a two-day visit to India on Tuesday night. The Saudi Crown Prince rescheduled his India visit after he landed in Pakistan on Sunday in wake of the Pulwama terror attack in which a suicide bomber killed over 40 Central Reserve Police Force jawans. His decision to head back to Saudi Arabia for a day before restarting his India visit again is believed to be a mark of respect for the Indians' sentiments after a cowardly attack on the Indian CRPF convoy by an operative of the Pak-based terror group Jaish-e-Mohammad.

So why is Saudi Crown Prince Mohammed bin Salman visiting India? And what importance does it hold for the nation?

Oil, other energy needs

Around 20 per cent of India's oil is imported from Saudi Arabia. Saudi Arabia, being one of the largest producers of oil in the world, definitely sees this as an opportunity with India being a massive consumer of oil. Taking the ties forward from the traditional buyer-seller pacts, Saudi Arabia is planning to invest heavily in India. The Kingdom's global oil giant Aramco, along with United Arab Emirates' Abu Dhabi National Oil Company, last year announced plans to set up one of the world's largest refining and petrochemicals plant worth over $44 billion in Ratnagiri, Maharashtra.

As per the country's Oil Minister Khalid Al Falih, Saudi Arabia will provide half of the crude oil supply to the Ratnagiri plant, which will give it a major boost in raising the oil import to India.

Right now Saudi Arabia is the third biggest oil supplier to India after Iraq and Iran. It hopes to  increase its refining and petrochemical business in India while also helping the country meet its oil demand. India also imports around 32 per cent of LPG requirements from Riyadh. Both the nations are also expected to ink ties in the field of natural gas and solar energy.

Foreign Direct Investment

Bilateral ties between India and Saudi Arabia have evolved significantly over the past few years. In 2017-18 alone, India's bilateral trade with Saudi Arabia stood at $27.48 billion, making the Saudi Kingdom its fourth largest trading partner. Saudi Arabia is one of India's major trade partner. It is ranked 15th in the country-wise foreign direct investment in India globally, second after United Arab Emirate among Arab countries. Riyadh invested $21.55 million worth in joint FDI ventures in paper manufacture, industrial products, cement, metallurgical industries, computer software, etc, in India between 2004 and 2008, and the investment is increasing every year. Saudi Arabia also plans to invest heavily in India through the National Investment and Infrastructure Fund. This will help in building highways, ports and other big infrastructure projects in India.

Expatriate remittance

Saudi Arabia is home to more than 30 lakh Indians, who send back more than $10 billion to India every year. The Kingdom provides huge employment and business opportunities for Indians living in the country. Several Indian businesses, skilled workers and top managers are helping Saudi Arabia in its growth story. The enhancement of business ties with Saudi Arabia will give a big boost to the Indian community living in the Kingdom.

Also read: Pakistan awaits the fate of North Korea if India successfully lobbies at FATF

Counter-terrorism, maritime security

Ahead of the visit by the Crown Prince, Saudi Arabia's Minister of State for Foreign Affairs Adel al-Jubeir said in Islamabad on Monday that Riyadh will try to "de-escalate" tensions between India and Pakistan in the wake of the deadly terror attack in Pulwama by Pakistan-based Jaish-e-Mohammad. News agency PTI also quoted an official saying that Saudi Arabia was no longer accepting Pakistan's narrative on Kashmir and cross-border terrorism and that India will forcefully raise the issue of Pakistan's support to terror groups during delegation-level talks between Prime Minister Narendra Modi and the Crown Prince. The two countries will also issue a joint statement on terrorism and ways to deal with it. To increase defence cooperation, the two sides will also conduct joint naval exercises.

Edited by Manoj Sharma

Also read: RBI announces Rs 28,000 crore interim dividend to govt

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