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increase the flow of Saudi investments for its energy and infrastructure devel-
opment programmes.
Saudi Arabia, however, is a notable absentee in India’s aviation sector
which has attracted the attention and investments from other Gulf airlin-
ers. The Open Sky policy introduced by the government in June 2016 and
the exponential increase in the number of Indian travellers have resulted
in India becoming an attractive destination for airliners like Emirates,
Etihad and Qatar Airways. In recent years, they have increased the num-
ber of flights, destinations and seats available between India and their
home ports and this has resulted in investments in Indian airlines such as
Jet Airways. Given its conservative business practices, Saudia is unlikely to
benefit from the new situation.
energy SupplieS
Energy trade constitutes the essential component of the Indo- Saudi eco-
nomic relations. Since independence, India has been a net energy importer
and its demands could not be met only through domestic production.
Until the introduction of economic reforms and the consequent jump in
its energy consumption, it was able to manage with just about a third of
oil needs having to be imported. Even the oil crisis of 1973 was a financial
burden and not a security challenge as it had become in later decades. This
changed dramatically after 1991 and its energy consumption and hence
demand far outpaced domestic supplies.
According to BP Statistical Review of World Energy in 2015 India over-
took Japan and became the third largest oil consumer in the world after
the US and China (BP 2017 ; PTI 2016b). Its crude oil demands increased
by 8 per cent in 2015 to reach 4.1 million barrels per day (bpd), only lag-
ging behind the US (19.39 million bpd) and China (11.96 million bpd).
Domestic as well as international estimates suggest that India’s import
dependency upon oil and gas would continue to increase. According to
the Paris-based International Energy Agency, India’s dependence on oil
imports will continue to increase and can reach up to 88 per cent by 2047
(IEA 2015 ). Its overall energy imports, including oil, gas and coal, which
were 38 per cent in 2017, are also expected to increase up to 57 per cent
(India, NITI Aayog 2018 ).
Saudi Arabia, on the other hand, is the largest producer and exporter of
crude oil and accounts for about one-fifth of proven oil reserves. At the
current rate of production its reserves could last for 70 years (Kemp 2016 ).
P. R. KUMARASWAMY AND MD. M. QUAMAR