Pranab Mukherjee's two-day (19-20 April 2008) visit to Saudi Arabia was aimed at deepening the bilateral strategic partnership and taking Indo-Saudi ties to new heights. King Abdullah and Mukherjee pledged to boost strategic, commercial and cultural links between the two countries and agreed to "upgrade the buyer-seller relationship to a more participatory one for mutual benefits."

The relations between India and Saudi Arabia go back over several centuries. Traders from the Arabian Peninsula crossed the Arabian Sea and the Hindu Kush to exchange commodities and ideas. These relations continued till the establishment of Saudi Arabia, but their diplomatic relations were only established in 1948 and upgraded in 1954. In May 1955, Prince Faisal bin Abdul Aziz, visited New Delhi, laying the foundations of these bilateral relations.

The historic visit of King Saud that lasted from 26 November to 12 December in 1955, gave a new impetus to the bilateral relations when he had talks on various issues with Prime Minister Jawaharlal Nehru. In 1956, Jawaharlal Nehru visited the Kingdom and addressed a public gathering at a local football stadium in Jeddah, a distinction which had not been accorded to any other visiting leader. Indira Gandhi visited the Kingdom in 1982, while in December 1994, the then Finance Minister, Dr. Manmohan Singh, visited Saudi Arabia for a meeting of the Indo-Saudi Joint Commission.

January 2006 was another milestone in Indo-Saudi bilateral relations, which saw the visit of King Abdullah bin Abdulaziz al-Saud to India, the first visit by a Saudi king in 51 years. The landmark visit (24-27 January) of the King, who was the chief guest at India's Republic Day celebrations, heralded a new era in the bilateral relations of the two countries. They signed an agreement - "Delhi Declaration", which called for close co-operation between the two countries. India and Saudi Arabia signed four accords: (i) a MoU for combating crime, (ii) an agreement on avoidance of double taxation (iii) a bilateral investment protection agreement (BIPA); and (iv) an agreement for cooperation in the field of youth and sports.

India's bilateral business and economic ties with Saudi Arabia got a significant boost with the signing of the BIPA and the Double Taxation Avoidance Agreement, which will provide the legal and institutional framework for boosting India-Saudi trade and investment ties. As the largest producer and depository of known reserves of crude oil in the world, Saudi Arabia can assist India by supplying the latter's oil and energy needs.

India has emerged as Saudi Arabia's fourth largest export destination with US$9.8 billion worth of exports. Indo-Saudi trade, which was US$1.4 billion in 2000-01 rose to US$15.9 billion in 2006-07. The value of two-way trade between the countries exceeded US$8.76 billion in 2004-05. In terms of imports by Saudi Arabia, India ranks 9th and provides around 2.96 per cent of Saudi Arabia's total imports. Cooperation in the area of manpower is an important dimension of the Indo-Saudi relationship. Approximately 1.5 million Indians work in Saudi Arabia, around 85 per cent being in the blue-collar category. Remittances by Indian workers are estimated to be over US$3 billion annually. Current bilateral trade exceeds US$15.97 billion annually, including India's oil imports from Saudi Arabia.

The Joint Commission for Economic, Trade, Scientific, Technical and Cultural Cooperation (JCM) between India and Saudi Arabia was established in 1981 and two countries cooperate actively in the fields of science and technology and agriculture. The Council for Scientific and Industrial Research (CSIR) and the Saudi Arabian Standards Organization (SASO) have an ongoing programme of technical cooperation (POC) since June 1993. Under this programme, Indian experts in different scientific areas, particularly in measurement and calibration are deputed to Saudi Arabia on a regular basis. Besides, several Saudi experts have undergone advanced training in India. CSIR and the King Abdul Aziz City for Science and Technology (KACST) signed a MoU for bilateral cooperation in 1997 and have an ongoing programme of cooperation in the areas of space science, remote sensing and installation of internet.

A number of Indian firms have taken advantage of the new Saudi laws allowing 100 per cent foreign ownership of projects in the Kingdom. Indian companies have established 108 joint ventures in Saudi Arabia in different sectors such as management and consultancy services, construction projects, telecommunications, information technology, pharmaceuticals and so on. A robust Indo-Saudi relationship would result in Saudi businessmen tapping investment opportunities in India, particularly in the infrastructure sector, which can absorb some US$500-600 billion.

With a large number of Indian Haj pilgrims visiting Saudi Arabia every year, there is need for a proactive, vibrant approach to build a strategic partnership with Saudi Arabia. As the Prime Minister, Dr Manmohan Singh, travels to Saudi Arabia to concretize a new agenda for bilateral economic cooperation, it is time to prepare for close ties with the kingdom.