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কৌশলগত পুনৰ নিৰ্ধাৰণ: পশ্চিম এছিয়াত ভাৰতৰ ভূমিকা আৰু অধিক শক্তিশালী কৰাৰ বাবে চৌদি আৰৱ ভ্ৰমণ প্ৰধানমন্ত্ৰী মোদীৰ

Published By : Admin | April 21, 2025 | 16:51 IST

Prime Minister Narendra Modi’s April 22–23, 2025 visit to Saudi Arabia comes at a critical stage — one shaped by shifting global power dynamics and a fast-transforming West Asia.

It is his third visit after landmark trips in 2016 and 2019, and includes the second summit of the Strategic Partnership Council — a mechanism born out of Crown Prince Mohammed bin Salman’s 2019 India visit.

PM Modi’s visit to Saudi Arabia, 2019

PM Modi’s visit to Saudi Arabia, 2016

This visit is set to reframe bilateral ties from transactional cooperation to transformative partnership, expected to cement India’s presence in the Gulf as a strategic player, while also offering Saudi Arabia a reliable partner amidst global uncertainties, including oil market volatility and regional security challenges.

Energy: The Basis and Prospect

Strengthening collaboration in the energy sector remains an important aspect of India-Saudi relations. Saudi Arabia ranks as India’s third-largest source of crude oil and LPG, constituting almost 18% of India’s LPG imports. The growth in energy trade in 2023-24 was $25.7 billion.

Both countries appear keen to expand their cooperation beyond the traditional focus on oil trade. Saudi Aramco’s interest in exploring partnerships with Indian companies, such as BPCL and ONGC, reflects a deepening confidence in India’s energy sector and signals a shift toward more strategic, long-term collaboration, including joint investments and co-development initiatives.

Meeting the Minister of Energy of the Kingdom of Saudi Arabia, 2019.

Furthermore, the visit is expected to lead to the conclusion of new MoUs, including in the area of green hydrogen — a development that aligns with India’s clean energy ambitions and Saudi Arabia’s Vision 2030 strategy for economic diversification. These initiatives hold the potential to enhance India’s long-term energy security while supporting Saudi Arabia’s efforts to adapt to evolving global energy dynamics and maintain a strong position in international markets.

IMEC: A Corridor of Connectivity and Influence

Perhaps the most geopolitically significant agenda item is the India-Middle East-Europe Economic Corridor (IMEC). Launched at the G20 Summit in New Delhi in 2023, IMEC envisions a seamless multi-modal transport and trade corridor connecting India to Europe via the Middle East. Saudi Arabia, occupying the central railroad leg of this route, holds the key to its implementation.

The Saudi segment is still the longest corridor and most neglected segment. It is anticipated that PM Modi’s visit will pave the way for a forward-thinking roadmap. The promise of IMEC is that it will provide a key alternative to trade routes like the Suez Canal by improving resilience and reducing reliance on traditional maritime routes. IMEC links Indian Ports (Mundra, Kandla, and JNPT) with UAE and Saudi Ports (Fujairah, Khalifa, Dammam, and Ras Al Khair), which are resilient and secure against traditional choke points like the Suez Canal.

IMEC aligns well with Saudi Arabia’s vision of emerging as a key logistical hub between the East and West. For India, it complements the Act West policy by enhancing connectivity to Europe and Africa through reliable and secure trade routes. The corridor also promotes regional transparency, fosters multilateral cooperation, and supports sustainable infrastructure development, offering a complementary and balanced alternative within the evolving global connectivity landscape.

Economic and Investment Outlook

As always, trade and investment will also take center stage in terms of dialogue. From joint military exercises, such as Al Mohed Al Hindi, to significant defense exports — including a $300 million artillery ammunition deal in 2024 — the relationship is moving toward deeper institutional engagement. The upcoming talks are expected to cover areas such as intelligence sharing, joint training programs, and co-production of defense equipment.

Against the backdrop of challenging global economic conditions and Saudi Arabia’s ongoing efforts to diversify beyond an oil-dependent framework, India presents a promising destination for long-term, strategic investment. By working together to facilitate a more enabling investment environment, both nations can unlock mutually beneficial opportunities that support sustained economic growth, foster innovation, and enhance industrial collaboration.


Shared Stakes in a Shifting Geopolitical Landscape

Finally, the visit carries wider strategic significance amid an evolving regional landscape marked by shifting diplomatic dynamics. Saudi Arabia’s engagement with Iran, facilitated in part by China and acknowledged by the United States, reflects a broader effort to recalibrate longstanding regional relationships. As countries such as Saudi Arabia, Qatar, and Kuwait take a more autonomous stance in shaping their foreign policy priorities, India’s balanced and constructive approach enables it to engage across the spectrum. This reinforces its image as a credible and responsible partner committed to regional stability and dialogue.

PM’s roundtable interaction with Saudi Business Leaders, 2016.

Prime Minister Modi’s visit to Saudi Arabia symbolizes far more than a routine diplomatic engagement — it reflects a recalibration of India’s foreign policy towards deeper integration with West Asia’s evolving political and economic ecosystem. Hence, Saudi Arabia is vital for India’s strategic outreach in the Middle East, offering access to key regional dynamics. In return, India serves as a stable, dependable partner for Saudi Arabia, especially amid economic diversification and regional shifts in a changing global landscape.

The essence of the visit is a departure from routine diplomatic activity; it marks an operational shift in India’s foreign policy towards deeper integration in the political and economic dynamics of West Asia. As the two leaders convene, they are not just strengthening bilateral ties — they are scripting a new chapter in India’s global rise and Saudi Arabia’s regional transformation.

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Cabinet approves Price Stabilization Fund for Scheduled Indian Airlines towards ATF pricing
June 03, 2026

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved one-time budgetary support not exceeding Rs.10,000 crore for Oil Marketing Companies (OMCs) to provide ATF price stabilisation support to Scheduled Indian Airlines for their domestic and international operations. The budgetary support shall be in the form of interest-free advances to OMCs through the Demands for Grants of the Ministry of Petroleum and Natural Gas. The support shall be provided to OMCs to facilitate stable ATF pricing for airlines during the ongoing period of exceptional fuel price volatility arising from the West Asia crisis.

Key component of the approved of Price Stabilization Fund:

(i) Interest-Free advance to OMCs

A one-time budgetary support of up to Rs.10,000 crore shall be provided as an interest-free advance to OMCs to support ATF price stabilisation for Scheduled Indian Airlines. The corpus shall compe
It will help ensure optimum utilisation of airport infrastructure developed across the country, including airports operationalised under the UDAN scheme.nsate OMCs for losses arising from elevated international ATF prices whenever the prevailing Import Parity Price exceeds the benchmark price determined under the approved mechanism.

(ii) Recovery and True-Up Mechanism

When international ATF prices moderate, the differential amount shall be recovered from OMCs and returned to the Consolidated Fund of India. The arrangement shall continue until the entire support amount is fully recovered and settled.

(iii) Coverage of Domestic and International Operations

The scheme shall be available to all willing Scheduled Indian carriers for both domestic and international operations.

(iv) Fixed ATF Price Arrangement

The mechanism provides greater predictability in fuel costs by adopting a fixed-price arrangement for domestic and international operations, thereby reducing airline’s exposure to sudden fuel price spikes.

(v) Exclusive rights of ATF supply to OMCs

The arrangement will be implemented through an MoU between participating Indian airlines and OMCs, with the Ministry of Civil Aviation and the Ministry of Petroleum & Natural Gas as signatories. Under this one-time arrangement, participating airlines will procure ATF only from OMCs for up to three years, subject to annual review or until the advance amount is fully recovered, whichever is earlier.

(vi) Monitoring and Audit

A Monitoring Committee comprising representatives of the Ministry of Civil Aviation, Ministry of Petroleum & Natural Gas and Department of Expenditure shall oversee implementation, claim verification, reconciliation and settlement. All claims and recoveries shall be subject to audit.

(vii) Duration of Prise Stabilization support

ATF price stabilisation support will be in force for a period of thirty-six months with provision for annual review or until the advance amount is fully recovered/settled, whichever is earlier. The proposal may be extended beyond thirty-six months with the approval of the Competent Authority in case the corpus is not fully trued up within this period.

Expected outcome:

  • The proposed mechanism will provide enhanced stability and predictability in ATF pricing for Indian airlines, enabling better operational and financial planning.
  • It will shield Oil Marketing Companies (OMCs) from losses arising from volatile and elevated ATF prices during the ongoing West Asia crisis.
  • The measure will help protect and sustain domestic and international air connectivity, ensuring continuity of air services.
  • It will reduce the pass-through of fuel price shocks to passengers, thereby helping to moderate fare volatility.
  • The arrangement will support continued air connectivity to remote, regional, Tier-II and Tier-III cities, promoting balanced regional development and inclusive growth.

Key Benefits:

  • Stable airline operations help sustain employment across airlines, airports, ground handling agencies, MROs, travel agencies, hospitality and logistics sectors.
  • Continued air connectivity will facilitates movement of passengers, high-value cargo, business travellers and tourists, thereby supporting economic activity across sectors.
  • The measure will have positive spill-over effects on tourism, hospitality, trade, exports, regional development and investment.
  • It will help ensure optimum utilisation of airport infrastructure developed across the country, including airports operationalised under the UDAN scheme.
  • By preserving domestic and international connectivity, the initiative will strengthen India's integration with global markets and support long-term economic growth.

Background:

The aviation sector has been impacted by unprecedented volatility in global ATF prices following the West Asia crisis.

  • Due to the ongoing West Asia crisis, international ATF prices have surged nearly 2.5 times from Rs.60.50/ litre in March 2026 to Rs.142/litre in May 2026. ATF accounts for nearly 40% of an airline's operating cost. Therefore, this volatility in ATF prices has resulted in high cost pressure on airline financials.
  • ATF accounts for nearly 40% of airline operating costs and during periods of extreme fuel volatility, can constitute up to 60% of total operating expenditure.
  • While ATF price has been capped for domestic operations, Indian carriers continue to purchase ATF for international operations at Import Parity Prices (IPP), exposing them to elevated fuel costs.
  • However, the capping of ATF prices is a temporary measure and not sustainable in the long run for OMCs. Due to the capping of ATF prices, OMCs are also incurring losses particularly with volatile and surging ATF prices during the West Asia crisis.
  • Closure of Pakistan airspace for Indian carriers has resulted in longer flight paths to Europe, North America and Central Asia, increasing fuel burn and operational costs.
  • Long-haul passenger fares have increased substantially, international demand has declined and airlines have reduced or suspended services on several international routes.