The latest edition of the Future Investment Initiative became a grand affair as business communities from around the world flocked to Riyadh, unlike last year when the Saudi flagship conference was largely boycotted in the wake of Jamal Khashoggi’s brutal killing.
Perhaps the most noticeable of them all was the Indian Prime Minister Narendra Modi, who landed in Riyadh on Oct 29 to a warm welcome and delivered a keynote address at “Davos of the Desert”. He shared his country’s contribution to the global good, its historic linkages with Saudi Arabia and its emergence as a breeding ground for startups amongst other things.
Along the sidelines of the event, bilateral meetings were held where the two sides discussed areas of cooperation and signed a total of 12 memorandums of understanding. These included the establishment of a Strategic Partnership Council, defence and security collaboration as well as on the digital payments front.
In the joint statement released on October 29, there was also some covert and overt support for each other’s policy stances. One snippet reads: “The two sides discussed regional and international issues of mutual interest, and reiterated their categorical rejection of all forms of interference in the internal affairs of countries, and the need for the international community to fulfil its responsibilities towards preventing any attacks on the sovereignty of States.”
This text, in the same breath, managed to hint at Riyadh’s tacit endorsement for Delhi’s controversial move of stripping Kashmir’s special constitutional status and India’s solidarity with the Kingdom regarding recent attacks on Aramco facility.
Furthermore, Delhi backed Riyadh’s stance concerning Syria with both parties stressing on the need to seek a solution in the light of Security Council Resolution 2254, which calls for formal negotiations between the government and opposition.
The statement also mentions Yemen where again the two countries have each other’s backs, advocating for the GCC initiative in the war-torn country. Given that the earlier paragraph had reiterated non-interference in matters of other nations, it was quite ironic considering how Riyadh is the primary aggressor in Yemen.
Other than that, the need to further increase bilateral trade was emphasised, urging respective business communities to explore opportunities in areas like mining, infrastructure, agriculture as well as skilled labour transfer in electronics and ICT. Finally, Delhi extended support to the Kingdom’s forthcoming presidency of the G20 in 2020, with Riyadh hosting the next summit.
Riyadh and Delhi have historically had cordial ties given the latter’s dependency on the former for energy needs and the huge number of Indian migrant workers living in Saudi Arabia.
Crude petroleum imports from the Kingdom were valued at $13.1 billion in 2017, making up around 17% of Delhi’s total oil import bill. As the Trump administration tries to isolate Tehran through sanctions, it has put pressure on Delhi to find other suppliers for its energy demands, creating an opportunity for MbS that he fully wants to take advantage of. With India’s annual imports of crude petroleum exceeding $74 billion a year ago and consumption the third-highest across the globe, it is an extremely lucrative market for anyone.
Furthermore, an estimated 4.1 million Indian citizens reside in Saudi Arabia for work and send back remittances – a key source of foreign exchange for Delhi – which roughly account upwards of 15% of the total inflows that last year stood at around $79 billion. Meanwhile, India would like to expand its exports to the Kingdom which were worth $5 billion in 2017, mainly consisting of vegetable and chemical products.
Saudi Arabia is also keen to learn from Delhi in areas of technology, particularly payments, where India’s proactive and liberal policies have made it one of the biggest disruptors in the world of fintech, boasting giants like Paytm. With the kingdom keen to establish itself as the regional startup hub, for which it has made massive investments including a whopping $45 billion in SoftBank’s Vision Fund, Indian experience naturally offers great value.
This was the second meeting of PM Modi with the Saudi Crown Prince Muhammad Bin Salman, who this February had touched upon Delhi for a two-day visit that resulted in five MoUs being signed in the fields of investment, housing and tourism among others.
The bilateral business relations were then given a huge boost when earlier this August, Aramco announced to buy a 20% stake in Reliance Industries oil-to-chemical business, owned by Modi’s close friend and the richest Indian Mukesh Ambani, for $15 billion.
With a proactive crown prince at the helm of Saudi Arabia, trying to diversify from an oil-based economy, India is a natural ally thanks to its massive consumer base and investment opportunities. Given the two leaders’ record of getting things done (by hook or by crook), a transformative partnership might just set sail.