JULY 08, 2019 News the Newsbehind 27
indiaintheinternationalkaleidoscopeaddition to the 5.6mt annual term
contract), likely to be the fi rst of
many arrangements made to fi ll in
for the 23.5mn tonnes of crude oil
presently made unavailable due to
the sanctions on trading with Iran.
Two broad categories could be
outlined in relation to the developing
dynamic:
Economically, there is an argument
to be made in favour of India and Saudi
Arabia exploring complementarities in
the diversifi cation of energy verticals.
Th is would build a more solid founda-
tion for an increasingly important bilat-
eral dynamic-a lucrative and stable part-
nership in refi ning as well as exports, in
addition to the oil trade alone.
For the Saudis, this would pre-empt
the vagaries of international oil mar-
kets and the challenges posed by new
entrants into the export side. India,
on the other hand, would be helped
tremendously by the assurance of an
energy partner with the kind of market
clout that the Saudis enjoy.
Accordingly, Saudi ARAMCO is
looking to invest in petrochemicals and
refi neries to gain a permanent foothold
that could transcend the buyer-seller
dynamic. Th is is expected to manifest
itself in the form of a growing Saudi
stake in integrated downstream models,
as well as capitalizing on the potential
that India’s growing need for consoli-
dating its strategic petroleum reserves
represent.
The diversification that Saudi
Crown Prince Mohammed Bin Salman
(MBS) seeks is not exclusive to the
domain of energy alone. In addition
to technology and infrastructure, it is
a possible Saudi investment in India’s
agrarian sector - ancillary fi elds of food
processing - working towards fashion-
ing a model of food security that could
qualify as another crucial cornerstone
in the bilateral tie.
If New Delhi can capitalize uponits present camaraderie and bring the
Saudis to the table favourably on the
question of price fi xing, it could usher
in a phase of precious economic guar-
antees that would benefi t India’s fi scal
health-given the massive sums of foreign
exchange spent on the import bill. India
could here use the inducement of the
fi rst mover advantage that it can cur-
rently off er the Saudis as a leverage.
Strategically, New Delhi has begun
exhibiting an appreciation of the fact
that the Saudis present a strategic
option in the region that has, for too
long, been cultivated unsatisfactorily by
India. Th is reorientation has also been
reciprocated by diplomatic gestures
on the part of MBS (like his eff orts to
present the visit to India in February
as a standalone one) which are widely
interpreted in New Delhi as indicat-
ing a sensitivity that underlies valued
strategic partnerships.
Signifi cantly, the enhanced scope
of counter-terrorism exercises and an
exploration of defence partnerships
suggests that New Delhi has - even
if belatedly - come to the realization
that it would do well to decouple its
strategic defence cooperation with the
Saudis from Riyadh’s other bilateral
propinquities or alienations, unless
there is a direct impingement on India’s
national security.
Despite appearing instinctively
uncomfortable to demonstrate the
choice, there is compelling evidence
to suggest that New Delhi may fi nally
have made a nuanced strategic shift,
which prioritizes the potential of Arab
wealth funds and defence cooperation
such as the one Riyadh represents over
and above a legacy of symbolism.
(Th e author is a Research Analyst
with subject expertise in energy security
and a former research associate with the
Offi ce of Net Assessment, US Depart-
ment of Defence)
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