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PM Modi embarks on two-day Saudi Arabia visit; investments, strategic relations in focus

FE Bureau
Narendra Modi will deliver the keynote address at the third session of the Future Investment Initiative (FII) Forum (ANI Image)

Prime Minister Narendra Modi embarked on a two-day visit to Saudi Arabia on Monday to help draw investments and bolster bilateral ties, with a dozen agreements expected to be signed in sectors, including energy, defence procurement and civil aviation.

Modi will deliver the keynote address at the third session of the Future Investment Initiative (FII) Forum -popularly called the 'Davos in the Desert' - organised by Saudi Arabia's Sovereign Wealth Fund, the Public Investment Fund, in Riyadh on Tuesday.

Modi, who is visiting the Kingdom at the invitation of Saudi King Salman Bin Abdulaziz Al Saud, will also hold talks with Saudi Crown Prince Mohammed Bin Salman.

"During the visit, the agreement for establishment of the Strategic Partnership Council will further elevate the India-Saudi Arabia Strategic Partnership to a new level," Modi said before his departure.

The visit is in the backdrop of aggressive disinvestment push by the government and the likelihood of PSU oil refiner-cum-marketer BPCL finding a strategic investor in Saudi Aramco, the world's second largest producer of crude oil.

A key feature of the visit will be the setting up of the India-Saudi Arabia Strategic Partnership Council, aimed at further improving the strategic partnership between the two countries. The council will report to Modi on the Indian side and King Salman for Saudi Arabia. It will comprise two mechanisms - one for political and diplomatic relations and the other for commercial and energy ties. External affairs minister S Jaishankar and his Saudi counterpart will head the first mechanism, while commerce and industry minister Piyush Goyal and his counterpart will chair the second one. The decision to set up this council was made during King Salman's visit to New Delhi in February.

The visit also assumes tremendous strategic significance, coming as it is after India's decision in August to abrogate Article 370 that had granted special status to Jammu & Kashmir. Pakistan has since been desperately drumming up support from big powers as well as the Islamic world against New Delhi's move. While the western nations have largely remained indifferent to Islamabad's pitch, two Islamic countries - Turkey and Malaysia - have made statements largely echoing Pakistan's stance. The support of Saudi Arabia, with its influence in the Islamic world, would be important for India in this context, analysts have said.

Similarly, an agreement will be signed between the two sides for the launch of India's Rupay card in Saudi Arabia. This move is expected to help around 2.6 Indian expatriates in Saudi Arabia and those Indians travelling to the West Asian country for the Hajj pilgrimage. With this, Saudi Arabia will be the third country in the West Asian region, after Bahrain and the UAE, to launch India's Rupay card.

An MoU on a joint venture between Indian Oil Middle East with Al-Jeri Company of Saudi Arabia for downstream cooperation for setting up retail outlets in Saudi Arabia may be on cards as well. New Delhi has also invited Riyadh to take part in India's strategic petroleum reserves, seeking to take their usual buyer-seller relations in oil to a higher trajectory of strategic partnership that focuses on investment and joint ventures in petrochemical complexes. This apart, India may also hope for some investment commitments by Saudi Arabia in the National Infrastructure Investment Fund.

A senior government official said that the Prime Minister's visit could also focus on the West Coast Refinery and Petrochemical Project. The project is the first joint venture between the two countries, with an initial projected cost of $44 billion. However, land acquisition hurdles have delayed the commissioning of the project by three years to 2025, raising the estimated cost to $60 billion. The venture would be half promoted by Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation, while Saudi Aramco and Abu Dhabi National Oil Co would hold the remaining 50%.

Separately, Pakistan denied the use of its airspace to Modi's flight for his Saudi visit. India has taken up Pakistan's denial of use of its airspace to the Prime Minister's flight with the International Civil Aviation Organisation, government sources told PTI on Monday.