Why is India important to Saudi Arabia? Will they reach strategic deals that could reshape South Asian politics?

Narendra Modi and Muhammad bin Salman (file image)

Prime Minister Narendra Modi is visiting Saudi Arabia when the Kingdom of the Middle East is undergoing a transition from economic and geostrategic policies. While Saudi Arabia plans on a large scale economic diversification, a secure energy market and strengthens defense capabilities, India also wants investment, fuel diversification and independent regional politics, and the leverage that occupies the Indian diaspora. Although the process has been going on for quite some time and Narendra Modi visited the Kingdom three times, there has been a new dimension due to the trade war initiated by U.S. President Donald Trump.

Under its 2030 Vision Initiative, Riyadh hopes to diversify its oil-dependent economy by investing in infrastructure, sports, tourism, health and technology. With its large market, skilled and cheap labor and dynamic middle-class India, New Delhi has made a unique opportunity to become one of the fastest growing economies in the world.

India and Saudi Arabia signed a Strategic Partnership Committee (SPC) agreement when PM Modi visited Riyadh in 2019. The fact that the two countries signed 12 Moores in the fields of energy, defense production and civil aviation understands this importance. Aramco, owned by the Saudi government, announced a $50 billion investment in the West Coast refinery project in India. The refinery will be established by Saudi Aramco, Abu Dhabi National Oil Corporation (ADNOC) and Indian companies.

The two countries are also formulating a free trade agreement (FTA) between India and the Gulf Cooperation Commission (GCC). Bilateral trade between India and Saudi Arabia reached US$42.98 billion in 2023-24. India’s exports are worth US$11.56 billion, imports of crude oil and other goods worth US$31.42 billion.

Earlier, Saudi Crown Prince Muhammad-Bin-Salman announced a $100 billion investment in India. PM Modi may try to get as much investment as possible when currently visiting the Kingdom.

In addition to economic diversification and energy security, the two countries are most likely to discuss cooperation in defense and security. India can help Saudi Arabia in counter-terrorism and maritime security.

Defense cooperation is an important issue in the SPC agreement signed by the two countries in 2019, with the two countries holding naval exercises Al Mohed Al Hindi. In addition, a US$225 million artillery ammunition agreement was signed between the two countries in 2024. In 2024, Sada Tanseeq-I, a joint land exercise in India, was held in 2024, followed by a defense industry seminar in Riyadh in November 2024.

All of these issues can be discussed and explored further when Modi meets Muhammad-bin-Salman or MBS. However, there are also some irritation. Riyadh’s leaning towards Pakistan is India’s frowning. Similarly, Saudi Arabia appears closer to Pakistan’s position on Jamu and Kashmir, although it continues its policy of calling for bilateral issues between India and Pakistan.

Analysts also pointed out that India’s treatment of Muslims is a problem that disturbs Riyadh. Saudi Arabia is a powerful Islamic state and the guardian of Mecca and Medina, and cannot ignore the treatment of India’s second largest Muslim population. Furthermore, it must take care of the politics of the Umat or the Muslim world as well as the politics of the Organization of Islamic Cooperation.