- Historic Economic Corridor Between India and Saudi Arabia
- Broad Discussions and Agreements Between Leaders
- Geopolitical Implications of the India-Middle East-Europe Economic Corridor
On Monday, India lauded its “strategic” partnership with oil-rich Saudi Arabia, days after unveiling a significant trade and transport route connecting Europe, the Middle East, and India as part of a broad alliance.
In New Delhi, Indian Prime Minister Narendra Modi informed Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman, “Together, we established a historic economic corridor.”
Saturday, they participated alongside other G20 leaders in the unveiling of ambitious plans to establish a modern Spice Route, bolstering trade ties that could have far-reaching geopolitical implications.
This corridor will not only connect the two countries, but will also facilitate economic cooperation and digital connectivity between Asia, West Asia, and Europe,” Modi said in discussions following the conclusion of the two-day Group of 20 summit he hosted.
During their discussions, the Indian leader and the Saudi crown prince also discussed collaboration in the areas of space, semiconductors, and defense manufacturing.
Arindam Bagchi, a spokesman for the Indian foreign ministry, stated that the leaders discussed energy security, trade, investment, and defense without providing further details.
India and Saudi Arabia also discussed commerce in local currencies and accelerating negotiations for a free trade agreement between India and the Gulf Cooperation Council, of which Saudi Arabia is a member.
The secretary of the Indian foreign ministry, Ausaf Sayeed, stated that the two countries signed eight agreements, including a pact to elevate their hydrocarbon energy partnership to a comprehensive energy partnership for renewable, petroleum, and strategic reserves.
Sayeed stated that they also agreed to establish a joint task force for a $100 billion Saudi investment, of which $50 billion is designated for a delayed refinery project along India’s western coast.
Sayeed stated that the connectivity between India and the Gulf countries would include ports, railways, improved roads, as well as power, gas infrastructure, and an optical fiber network.
He specified that the corridor would include trains to India in addition to port connections.
“India would be connected by railroads is the right interpretation, rather than India building the railroads,” he said in response to a question at a media briefing.
The corridor would be “the equivalent of the Silk Route and the Spice Road,” Saudi Investment Minister Khalid Al Falih said at an event in New Delhi later that day, adding that it would provide “greater energy connectivity, green materials, and processed and finished goods that will rebalance global trade.”
India and Saudi Arabia, along with the United States, the European Union, and the United Arab Emirates, launched the initiative to connect railways, ports, electricity and data networks, and hydrogen conduits.
The plan may have far-reaching ramifications, despite its heavy emphasis on trade.
During the launch event, Vice President Joe Biden referred to the commerce and transport scheme as “historic.”
Ursula von der Leyen, president of the European Commission, stated that the so-called India-Middle East-Europe economic corridor was “much more than ‘just’ a railway or cable.”
Signatories hope that it will help integrate India’s vast market of 1.4 billion people with Western nations, provide a counterbalance to China’s lavish infrastructure spending, bolster Middle Eastern economies, and help normalize relations between Israel and Gulf Arab states.
For New Delhi, the world’s most populous country, and Riyadh, the world’s largest crude exporter, it was another step in bringing the nations closer, with bilateral trade already reaching $42.8bn last year, according to Saudi’s investment ministry. Saudi Arabia is one of India’s leading suppliers of petroleum.
“As two of the world’s fastest-growing economies, our cooperation is important for the peace and stability of the entire region,” Modi said in footage shown on state broadcasts.
“For India, Saudi Arabia is one of the most important strategic partners,” he said.
