IMEC, energy ties in focus as PM Narendra Modi begins Saudi Arabia visit

Possibility of pacts being explored in logistics, clean energy, data cooperation

Prime Minister Narendra Modi is expected to discuss the next steps for the India-Middle East-Europe Economic Corridor (IMEC) with Saudi PM and Crown Prince Mohammed Bin Salman during his two-day visit to Saudi Arabia that began on Tuesday, sources said. The bilateral talks will also aim to further efforts to interlink power grids through sub sea cables, and greater collaboration in green hydrogen, they said.

 

Launched on the sidelines of the Group of 20 (G20) Summit in Delhi in September 2023, the IMEC aims for a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes, and enable goods and services trade among India, United Arab Emirates, Saudi Arabia, Jordan, Israel, and Europe. “There was a period of slow progress last year when many of the nations part of the discussions had other priorities. But now, talks on the corridor are getting a renewed push,” an official said.

 

Ahead of his visit, Modi told Riyadh-based Arab News that the IMEC has the potential to become the “new Silk Route of the 21st century”.

 

India and the European Union had committed to realising the full potential of the corridor in February, when European Commission President Ursula von der Leyen visited India.

 

India and Saudi Arabia are actively exploring opportunities in regional connectivity, logistics, clean energy, and data cooperation under the IMEC.

 

A memorandum of understanding (MoU) signed between India and Saudi Arabia in 2023 to connect the electricity grid is expected to become one of the major pillars of the IMEC initiative, Foreign Secretary Vikram Misri said last week, adding that an agreement on clean hydrogen was also possible.

 

This is the PM’s third visit to the country after 2016 and 2019. During the visit, the PM will attend the second meeting of the Strategic Partnership Council, two years after the first meeting took place on the sidelines of the New Delhi G20 Summit.

 

Bilateral trade and energy supplies also feature on the PM’s agenda. India is Saudi Arabia’s second-largest trade partner, while the Kingdom is India’s fifth-largest trade partner. Trade between India and Saudi Arabia stood at nearly $43 billion in 2023-24, of which nearly $31.42 billion was in imports, while outbound shipments made up $11.56 billion.

 

That year, Saudi crude made up for 14.3 per cent of India’s crude oil imports, while the Kingdom was the third-largest source of liquified petroleum gas (LPG) for India, accounting for almost 18 per cent of LPG shipments to India. While Indian importers have historically sourced crude oil from Saudi Arabia and the Gulf, New Delhi is keen on establishing further strategic linkages with nations in the region to solidify its energy security further.

 

The two sides are also expected to sign a slew of MoUs across space, health, science, culture, and advanced technologies.