A historic comprehensive cooperation agreement in the energy sector was signed by India and Saudi Arabia on Tuesday.

Following the completion of the G20 Summit on Monday, Saudi Crown Prince and Prime Minister Mohammed bin Salman Bin Abdulaziz Al-Saud met with Prime Minister Narendra Modi in a private setting.

The MoU is anticipated to lead to strengthened ties between India and Saudi Arabia in the areas of energy security, natural gas, electricity and grid interconnections, hydrogen, renewable energy, energy efficiency, petroleum, and other fossil fuels.

The stability and well-being of the region and the world depend on the strategic cooperation between India and Saudi Arabia, Indian Prime Minister Narendra Modi said on Monday during meetings with Saudi Crown Prince Mohammed bin Salman.

PM Modi referred to Saudi Arabia as one of India’s most significant strategic allies and stated that both countries were expanding their cooperation to keep up with the times.

The Briefing

The two sides signed eight agreements, including one to upgrade their hydrocarbon energy collaboration to a comprehensive energy partnership for renewable, petroleum, and strategic reserves, according to Secretary in the Ministry of External Affairs (MEA), Ausaf Sayeed.

According to Sayeed, the two parties also decided to establish a combined task force for a $100 billion Saudi investment, of which half is designated for a postponed refinery project along India’s western coast.

“I am very glad to be here in India. I want to congratulate India for the G20 Summit…a lot of announcements were made that will benefit both our countries, the G20 countries and the whole world. So I want to say to India, well done, and we will work to create a future for both countries,” MBS said.

“We are adding a new and modern dimension to our relations, in sync with the changing needs of the time… For India, Saudi Arabia is among the most important strategic partners… as the world’s two large and fast growing economies, our cooperation is important for the peace and stability of the entire region,” Modi said.

The Corridor

Sayeed mentioned improved ports, railroads, and highways when he spoke of the connectivity between India and the Gulf nations. He also mentioned power, gas, and optical fiber networks.

According to officials, the international IMEC that was unveiled on the sidelines of the G20 Summit will connect India by railroad. The US, Saudi Arabia, India, the European Union, and the United Arab Emirates are all parties to the proposed rail and ports initiative, which is seen as a rival to China’s Belt and Road Initiative.

The agreements call for collaboration on desalination and renewable energy, as well as between Saudi Arabia’s anti-corruption arm and India’s Central Vigilance Commission, investment organizations, and banks serving small and medium-sized businesses.

Shift of Focus

In accordance with the National Green Hydrogen Mission, which was announced in August 2021 as part of the drive to diversify the country’s energy supply, India has set a target of producing 5 million tonnes (MT) of green hydrogen yearly and an extra 125 GW of renewable energy capacity by 2030.

Additionally, the nation declared the creation of the Global Biofuels Alliance to promote the recycling of municipal solid waste (MSW), cow dung, and other agricultural and forestry waste for use in the production of biofuels like ethanol and ammonia.