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Even as External Affairs Minister S Jaishankar asserted that India-Saudi Arabia “collaboration holds promise of shared growth, prosperity, stability, security and development”, his first visit to the kingdom as foreign minister comes in the wake of former BJP spokesperson Nupur Sharma‘s remarks about Prophet Mohammad which were termed “insulting” by Riyadh.
Why Saudi Arabia
- Even after India gorging on cheap Russian crude oil in the recent months, Saudi Arabia is not a featherweight when it comes to fulfilling India’s oil energy needs. The country with the largest proven crude oil reserves calls the shots when
OPEChas to decide on production cuts and still accounts for 15% of India’s crude oil imports — third highest after Russia (24%) and Iraq (21%), as of June.
- Thanks to the crude oil imports, India’s balance of trade with the Islamic kingdom is heavily loaded in the latter’s favour, with India importing nearly $23 billion worth of goods from Saudi Arabia, which imported just under $7 billion worth of good and services from India, as of 2021-22 (April-December).
- Even though crude oil prices have cooled somewhat from the highs of $100 plus to less than $90 now, on fears of a recession in the US and Europe, that could soon change as OPEC and its allies have announced a cut, albeit small, in production.
- Moreover, with Russia threatening to cut off gas supplies to Europe, the latter could be forced to seek refuge in oil from West Asia, which could again drive up prices, especially during the fast approaching winter season in the Northern hemisphere — which the Centre can ill-afford as crucial assembly elections in Gujarat, Himachal Pradesh, Madhya Pradesh and Karnataka are due this year and early next year.
Religion and economy
- The country, which is home to two of the holiest shrines for Muslims at Mecca and Medina, is also home to 2.2 million expat Indians who constitute the largest expat community in the kingdom.
- There are also around 745 Indian companies registered either as joint ventures or as 100% owned subsidiaries in Saudi Arabia, with investments of around $2 billion.