India-Saudi Arabia to harness potential in energy sector

  With energy security being a crucial part of the strategic partnership, India and Saudi Arabia have agreed to work together to find ways and means to substantially increase the flow of bilateral investments and growth of trade ties in energy sector. India’s largest oil supplier Saudi Arabia is vital for India to meet its energy requirements. Agreeing to move on from the conventional buyer-seller relationship, India and Saudi Arabia have agreed to transform the relationship in the energy sector with investment and joint ventures in petrochemical complexes and cooperation in joint exploration. The decision to enhance the partnership in the energy sector was made during India’s Prime Minister Narendra Modi’s two-day visit to Saudi Arabia from April 2-3 where he held a bilateral meeting with King Salman. As the fastest growing economy in the world and a consumer driven economy India depends heavily on oil imports. Saudi Arabia is looking to diversify its economy especially after recent global crude oil prices meltdown. The bilateral trade between India and Saudi Arabia stood at $39 billion in 2014-15. India is one of the leading buyers of oil from Saudi Arabia. This makes India an important market for Saudi Arabia. The growing collaboration in the energy sector between both the countries aims to improve trade ties in the sector. Seeking to improve collaboration, India and Saudi Arabia have agreed to focus on areas of training and human resources development and cooperation in research and development in the energy sector. Mr Modi invited cash-rich firms in Saudi Arabia to invest in infrastructure and form joint ventures for oil exploration. According to the joint statement, “the two leaders agreed upon the need to further strengthen these ties, particularly through diversifying non-oil trade.”