Indian Council of World Affairs

Saudi Arabia is increasingly looking towards East and is keen to forge ties with the Asian economies. On March 29, 2023, Saudi Arabia’s cabinet endorsed the decision to join the Shanghai Cooperation Organization (SCO), as a dialogue partner.[i]Saudi Arabia's decision is a step towards rebalancing its ties with external actors. Considering that US has been its dominant partner since the 1950’s, this decision might have implications on Saudi Arabia-US relations.[ii]

Saudi Arabia’s Disillusionment with US

Saudi Arabia’s decision to join SCO as a dialogue partner can be analyzed as a sign of establishing closer ties with China and Russia, which could subsequently be seen as a step towards limiting the influence of the US in West Asia. The decision shows a growing desire on part of Saudi Arabia to diversify its foreign policy objectives and lessen its own reliance on traditional partner the US.[iii] Saudi Arabia’s interest in becoming a member of the SCO can be considered as a significant shift away from US-led alliances and towards alternative security and economic arrangements, given that the US has long been a dominating actor in the region.[iv]

A further indication of the US’ declining power is its unsuccessful attempt to mediate between Israel and Saudi Arabia to counter Iran’s influence in West Asia. Recently, Saudi Arabia and its adversary Iran resumed diplomatic relations as part of an agreement mediated by China that boosted Beijing’s role as a new moderator in the area. This move is a symbol of the geopolitical realignment taking place in the West Asia. Also, as a result of talks brokered by Russia, Saudi Arabia is also close to reaching an agreement to normalize its ties with Syria.[v]

Saudi Arabia is one of the biggest oil suppliers to the US. The US oil trade and energy security may be affected if Saudi Arabia works more closely with China and other SCO members. Also, the accession of Saudi Arabia to the SCO would boost regional security cooperation, which might have an effect on US regional objectives. In addition, Ukrainian crisis has shown Saudi Arabia’s unwillingness to follow the US line clearly. While the US and other countries have urged Saudi Arabia, which serves as the chair of the Organization of Petroleum Exporting Countries (OPEC), to increase oil supply, Riyadh has refused, despite US President Joe Biden’s West Asia visit last year.[vi]

The Look East Policy of Saudi Arabia

The "Look East” policy of Saudi Arabia represents a strategic reorientation of the country’s economic and foreign policies towards Asia, especially China and India. Acknowledging Asia's expanding economic significance and the need to diversify Saudi Arabia's economy, the policy seeks to forge greater economic, political, and cultural relations with Asian countries. It also emphasizes cross-cultural dialogue and interpersonal interactions. This involves expanding tourism with Asian countries, educational and cultural exchange initiatives, and routine communication through diplomatic channels. Additionally, the Look East policy intends to promote technology transfer, educational activities, and the growth of Saudi Arabia's human resources. This would encourage economic diversification, increase employment, and lessen the reliance of the country on oil exports.[vii]

India

Saudi Arabia has made sincere efforts to deepen its political, diplomatic, and cultural links with Asia and particularly India as part of its Look East policy. This entails concluding investment agreements, forming partnerships, starting fresh initiatives, and boosting trade and tourism. As part of these initiatives, the state-run Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation Limited signed a Memorandum of Understanding (MoU) with Saudi ARAMCO in 2018 to establish the largest oil refinery and petrochemical complex in Maharashtra. The strategic collaboration brings together the crude supply, resources, technology, experience, and skills of these several oil firms with a proven track record of global commercial success.[viii]The founding of the Saudi-Indian Business Council, which aims to encourage investment and trade between the two countries is another significant development[ix]. Furthermore, the historic visits by Prime Minister Narendra Modi to the Kingdom in 2016 and 2019 as well as Crown Prince Mohammad bin Salman's state visit to India in February 2019 has ushered in a new era in the bilateral relations, which has resulted in the formation of the Strategic Partnership Council (SPC).[x]

India - Saudi Arabia partnership in the defence sector is steadily improving. In 2021, India and Saudi Arabia held their first joint naval exercise named ‘Al-Mohed-Al Hindi’ and decided to deepen their defence relations.[xi]Furthermore, to promote sustainable and secure food production and distribution, India and Saudi Arabia have been collaborating closely in the area of food security. Saudi Arabia has been severely reliant on food imports due to its lack of arable land and water resources, whereas India is one of the world's major food producers and has a large agricultural sector.[xii]

Saudi Arabia's initiative on Yoga and during COVID showcases its affinity for India.  During Pandemic COVID-19, India and Saudi Arabia partnered to give the Kingdom 4.5 million COVISHIELD vaccines, while during the second wave, the former gave India supplies for COVID relief, mainly liquid oxygen. A MoU on Yoga Cooperation was signed between the Saudi Ministry of Sports and the Indian Ministry of AYUSH on International Day of Yoga 2021, opening the door for the establishment of official Yoga standards and courses in the Kingdom. This was the first time that such standards were being implemented by any country in the Gulf region.[xiii] Additionally, Saudi Arabia’s tilt towards India was evident during the Janadriyah cultural and heritage festival held in Saudi Arabia in 2018, as India was featured as a guest of honour, with a special pavilion dedicated to showcasing Indian culture, tradition and heritage for the first time over the decades.[xiv]

China

The "look east" policy of Saudi Arabia towards China is regarded as a pragmatic approach that acknowledges the growing significance of China. In 2019, during a visit to China, Saudi Arabia’s Crown Prince Mohammed bin Salman along with Saudi delegation, including top executives from state-owned oil company Saudi Aramco signed 35 economic cooperation agreements with China.[xv]Riyadh is also engaging with Beijing through active engagement in the Belt and Road Initiative (BRI) and Asian Infrastructure Investment Bank (AIIB). Saudi Arabia aims to advance infrastructure growth and trade connectivity in Asia to enhance and bolster sustainable economic development.[xvi]BRI and Saudi Arabia's Vision 2030 have been aligned through the establishment of bilateral and regional coordination institutions between the two countries. The collaboration in trade, investment, energy, and the development of new technologies are some of the important measures taken by Saudi Arabia in enhancing its relations with Asian economics.[xvii]

Saudi Arabia has been investing in China’s tech sector, with focus on Artificial Intelligence and robotics. Saudi Arabia's Public Investment Fund (PIF) has agreed to invest more than $1 billion in Lucid Motors. [xviii]In 2020, MoU with Huawei and Alibaba were signed by the Saudi Authority for Data and Artificial Intelligence. An agreement was made public by Alibaba Cloud to collaborate in assisting Saudi Arabia's efforts to build AI-enabled smart cities.[xix]One of the key developments in relation between China and Saudi Arabia in 2023 is an agreement signed by the largest oil corporation in the world, Saudi ARAMCO with North Huajin Chemical and Panjin Xincheng to start building a petrochemical and refinery complex in Liaoning province, China.[xx]

Conclusion

Saudi Arabia's Look East Policy has the potential to impact the world's economy, geopolitics, energy, and security. Saudi Arabia’s decision to join SCO is a clear indication that regional powers are shifting away from US-led alliances towards a multilateral world order. These developments will have a substantial impact on the US role in the region and on international politics as Saudi Arabia is one of the major powers in West Asia. While the US will continue to be a significant military and economic partner for Saudi Arabia, Riyadh seeks to build new strategic alliances with other countries.

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*Anjali Singh, Research Intern, Indian Council of World Affairs, Sapru House, New Delhi.
Disclaimer: The views are of the author. 

Endnotes

[i] Reuters. “Riyadh joins Shanghai Cooperation Organization as ties with Beijing grow”, Reuters,March 29, 2023. Available at:https://www.reuters.com/world/riyadh-joins-shanghai-cooperation-organization-ties-with-beijing-grow-2023-03-29/(Accessed on March 31, 2023).

[ii]Tom O’Connor.“Why Saudi Arabia is following Iran to join China and Russia’s security bloc”,Newsweek,March 29,2023. Available at:https://www.newsweek.com/why-saudi-arabia-following-iran-join-china-russias-security-bloc-1791326(Accessed on March 31, 2023).

[iii] Reuters. (), “Riyadh joins Shanghai Cooperation Organization as ties with Beijing grow”,

Reuters,March 29, 2023.Available at: https://www.reuters.com/world/riyadh-joins-shanghai-cooperation-organization-ties-with-beijing-grow-2023-03-29/(Accessed on March 31, 2023).

[iv]Reuters, Haaretz&The Associated Press. “Iran, Saudi Arabia Renew Ties, ‘Resounding Failure for Netanyahu’,Haaretz, March 10, 2023. Available at:

https://www.haaretz.com/middle-east-news/2023-03-10/ty-article/iran-saudi-arabia-renew-ties-resounding-failure-for-netanyahu/00000186-cb59-d739-a9cf-df7bf43d0000(Accessed on April 5, 2023).

[v] Stephen Kalin and Summer Said.“Saudi Arabia Strengthens Relations With China

Amid Strained U.S. Ties”, TheWall Street Journal,March 29, 2023.Available at: https://www.wsj.com/articles/saudi-arabia-strengthens-relations-with-

china-amid-strained-u-s-ties-c5819114(Accessed on April 3, 2023).

[vi]Tridivesh Singh Maini. “Saudi Arabia’s Entry Into the SCO: Strategic and Economic Implications”, The Geopolitics, April 1, 2023.Available at:

https://thegeopolitics.com/saudi-arabias-entry-into-the-sco-strategic-and-economic-implications/(Accessed on

April 5, 2023).

[vii]Sean Foley. “Saudi Arabia — Saudi Arabia’s Relations with Asia”, Asia Society Policy Institute, September 21, 2020. Available at: https://asiasociety.org/asias-new-pivot/saudi-arabia(Accessed on April 10, 2023).

[viii]Press Information Bureau. “Indian Consortium and Saudi Aramco Sign MoU for Ratnagiri Mega Refinery in Maharashtra”, Ministry of Petroleum& Natural Gas, Government of India, Available at: https://pib.gov.in/newsite/PrintRelease.aspx?relid=178581(Accessed on April 10, 2023).

[ix]“Saudi-Indian Business Council Roundtable Kicks off”,Saudi Press Agency, September 23, 2019. Available at: https://www.spa.gov.sa/w1177583?lang=en&newsid=1972985(Accessed on April 10, 2023).

[x]“India-Saudi Economic and Commercial Relations”, Embassy of India, Riyadh, Saudi Arabia,Available at: https://www.eoiriyadh.gov.in/page/india-saudi-business-relations/(Accessed on April 10, 2023).

[xi]Joint exercise 'Al-Mohed Al-Hindi' between Indian Navy and Royal Saudi Navy commences, Ministry of Defence, August,13 2021 , PIB Mumbai , https://pib.gov.in/PressReleasePage.aspx?PRID=1745469 (Accessed on April 13, 2023).

[xii] “India-Saudi Economic and Commercial Relations”, Embassy of India, Riyadh, Saudi Arabia,Available at:https://www. eoiriyadh.gov.in/page/india-saudi-business-relations/( Accessed on April 12, 2023)

[xiii]“India-Saudi Economic and Commercial Relations”, Embassy of India, Riyadh, Saudi Arabia,Available at: https://www.eoiriyadh.gov.in/page/india-saudi-business-relations/(Accessed on April 10, 2023).

[xiv] Janadriyah Festival with India as guest of honor, (January26, 2018),Saudigazette, https://saudigazette.com.sa/article/526962(Accessed on April 10, 2023).

[xv] Ben Blanchard, Saudi Arabia strikes $10 billion China deal, talks de-radicalisation with Xi, (FEBRUARY 22, 2019), https://www.reuters.com/article/us-asia-saudi-china-idUSKCN1QB15H (Accessed on April 20, 2023).

[xvi]   “SFD CEO meets with Chairman of Asian Infrastructure Investment Bank to discuss development projects”,Saudi Fund for Development Portal, November 24, 2022. Available at: https://www.sfd.gov.sa/en/news/sfd-ceo-meets-chairman-asian-infrastructure-investment-bank-discuss-development-projects#:~:text=The%20Kingdom%20of%20Saudi%20Arabia(Accessed on April 10, 2023).

[xvii]Dongmei Chen. “China’s BRI and Saudi Vision 2030: A Review to Partnership for Sustainability”, KAPSARC, October 24, 2021.Available at:https://www.kapsarc.org/research/publications/chinas-bri-and-saudi-vision-2030-a-review-to-partnership-for-sustainability/(Accessed on April 10, 2023).

[xviii] Tom Arnold, Saudi's PIF invests more than $1 billion in electric carmaker Lucid Motors , (SEPTEMBER 17, 2018), https://www.reuters.com/article/us-saudi-investment-auto-idUSKCN1LX1IG (Accessed on April 25, 2023).

[xix] Saudi Arabia signs MoUs with IBM, Alibaba and Huawei on AI, (OCTOBER 22, 2020), https://www.reuters.com/article/saudi-tech-int-idUSKBN2771NG (Accessed on April 26, 2023).

[xx] Marina Blinda, Saudi Aramco and Chinese partners join forces to build a major refinery, (April 2 2023), https://atalayar.com/en/content/saudi-aramco-and-chinese-partners-join-forces-build-major-refinery (Accessed on April 26, 2023).