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G20 summit a big moment for India?

Riding on the success of the landing of Chandrayaan-3 on moon, India hosted a BRICS meeting and soon thereafter a G20 meeting. The timings for both the events could not have been better for India for showcasing to global powers its prowess in scientific research and technology. India gainfully exploited this achievement at BRICS and G20. The G20 summit this time was primarily India centric with this South Asian country walking away with all the trophies in its hands after spending half a billion dollars in organising this mega event — an investment well worth the benefit.

Some of the take-homes from the G20 summit at New Delhi are the joint declaration on the conflict in Ukraine, the unveiling of an ambitious proposal by Prime Minister Narendra Modi and President Joe Biden that would establish a shipping and rail corridor linking India to the UAE, Saudi Arabia and onwards to Europe and the US, the announcement of a strategic partnership between India and Saudi Arabia and India and the UAE with projects in the energy sector, infrastructure and investment funds – with ambitious levels not seen before. On the diplomatic front, India emerged with increased sentiment in favour of its quest for a permanent seat in the UN Security Council. Turkish President Recep Tayyip Erdogan expressed his support for India’s bid for a permanent seat on the United Nations Security Council (UNSC). Speaking at a press conference on the last day of the G20 Summit, Erdogan said, “A country like India being there on the UN Security Council, we would be proud. But as you know, the world is bigger than…larger than five.”

The G20 joint declaration that avoids direct criticism of Russia for its war against Ukraine is being described as a significant diplomatic win for India which looked almost impossible a few days ago, given how sharply divided the group was over Russia’s invasion of its neighbour.

The participation of Saudi Arabia’s Crown Prince Mohammed bin Salman in the G20 moot was followed by his state visit to India. It is rather un-usual for the speed at which relations between the two countries have progressed. From the creation of the Strategic Partnership Council in 2019 to the first visit by an Indian army chief to the kingdom in 2020 and the first bilateral naval exercise in 2021, the relationship has blossomed at a stunning pace. Security ties and intelligence-sharing have increased as Saudi Arabia seeks to diversify its relationship with India, once limited to the energy sector. The planned India-Middle East-Europe Economic Corridor (an MoU was unveiled during the New Delhi G20 Summit by the governments of Saudi Arabia, France and others) would be “the equivalent of the Silk Route and Spice Road,” Saudi Investment Minister Khalid Al Falih said at an event in New Delhi, adding that it would provide “greater energy connectivity, green materials and processed and finished goods that will rebalance the global trade” with the possibility of trading in local currencies and expediting the negotiations for a free trade agreement between India and the Gulf Cooperation Council.

The two countries signed eight agreements, including a pact to upgrade their hydrocarbon energy partnership to a comprehensive energy partnership for renewable sources, petroleum and strategic reserves. Saudi Arabia is among the top exporters of petroleum to India. They also agreed to create a joint task force for $100 billion in Saudi investment, half of which is earmarked for a delayed refinery project along India’s western coast.

Saudi Arabia could set up an office of its sovereign wealth fund in Gujarat International Finance Tec-City (GIFT), its investment minister said in New Delhi on Monday. GIFT City is India’s tax-neutral financial services centre and a key project for Prime Minister Narendra Modi aimed at rivaling financial services centres in Dubai and Hong Kong.

“I will match your offer and commit today to open an office,” Saudi Investment Minister Khalid Al Falih said after India’s trade minister Piyush Goyal invited Saudi Arabia to set up an office of its sovereign wealth fund, Public Investment Fund (PIF), in GIFT City. Goyal also said he would suggest that his ministry starts an investment promotion office in Riyadh.

An ambitious United Arab Emirates (UAE), too, is bullish in its cooperation with India. It is working on an underwater train project to connect Dubai to Mumbai.

The participation of the Saudi Crown Prince in the G20 moot and his state visit to India represent a turning point in the region’s strategic dynamics and for the economies of both countries. “We are very glad to be in India,” the Saudi crown prince said during a ceremonial reception held in his honour in New Delhi. “The relationship between India and the Arabian Peninsula goes back thousands of years in history. The relationship between us is in our DNA. India is our friend. They helped us build Saudi Arabia over the past 70 years. There is a lot of Saudi work in India, helping development,” he remarked.

The joint Saudi-Indian Strategic Partnership Council established in 2019 is the vehicle to systemically structure the economic, defence and other joint ventures between the two countries.  According to analysts, the development of a strategic partnership between Saudi Arabia and India will likely have far-reaching ramifications for the wider West Asian region, potentially expanding common interests beyond trade into areas like defense cooperation.

The ramifications of the changing world order in Asia and the Middle East and its influence on world politics, notably on Pakistan, would be covered by this writer in his next column for this newspaper.

(The writer is a former President Overseas Investors Chamber of Commerce and Industry)

Farhat Ali, "G20 summit a big moment for India?," Business recorder. 2023-09-16.
Keywords: Economics , Europe economic , Defense cooperation , World politics , Narendra Modi , Joe Biden , Mohammed bin Salman , Pakistan , India , Saudi Arabia , BRICS , UNSC , UAE

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