image: 
Thumbnail images: 

India’s relationship with the Gulf has witnessed a qualitative transformation since the August 2015 visit of Prime Minister Narendra Modi to the United Arab Emirates (UAE). While seeking better relations with all Gulf countries, New Delhi has avoided taking sides in intra-Gulf disputes. This balancing act, between Riyadh and Tehran on the one hand and Riyadh-Abu Dhabi-Manama and Doha on the other, has helped India secure its core interests in the region. While not losing sight of its relations with important regional countries including Iran, Oman and Qatar, New Delhi has focused on two key countries, namely Saudi Arabia and the UAE, as part of its Gulf policy. This seemingly difficult diplomatic objective could be achieved only through proactive political engagement at the highest level.

 

Prime Minister Modi has undertaken four visits to this important region, including to Saudi Arabia (April 2016), Iran (May 2016), Qatar (June 2016) and Oman and the UAE (February 2018) since his first visit to the UAE. External Affairs Minister Sushma Swaraj has made nine trips to the Gulf capitals in the last five years. In addition, several visits of his cabinet colleagues, Ministers of State and the National Security Advisor have taken place to the Gulf States. Likewise, New Delhi has hosted key Gulf leaders including the Crown Prince of Abu Dhabi, Mohammed Bin-Zayed Al-Nahyan (February 2016 and January 2017), Crown Prince of Saudi Arabia Mohammed Bin-Salman Al-Saud (February 2019), Emir of Qatar Tamim Bin-Hamad Al-Thani (March 2015) and President Hassan Rouhani of Iran (February 2018). Simultaneously, numerous important visitors from the Gulf have come to New Delhi in the last five years. Further, Foreign Ministers of Oman (June 2014 and April 2017), Bahrain (February 2015), Iran (August 2015, May 2018 and January 2019), UAE (September 2015 and June 2018), Saudi Arabia (March 2016) and Qatar (August 2017) have visited India to discuss issues of mutual importance. The prime minister has also engaged with the Saudi leadership at G20 meetings to discuss important regional and bilateral issues.

 

While helping India maintain its balancing act, the proactive engagements have created a new synergy in Indo-Gulf relations, especially in the fields of trade & investment and security & defence. Bilateral trade has been traditionally a strong aspect of Indo-Gulf ties. Nearly 18 percent of India’s global trade comes from the Gulf, and the UAE and Saudi Arabia  are among its top five trading partners. India imports nearly 60 percent of its hydrocarbon requirements from the region. Over 8 million Indians live and work in the six Gulf Cooperation Council (GCC) countries and send more than US$30 billion in remittances annually. Though trade and energy remain the anchor of bilateral ties with the Gulf, increasing flow of foreign direct investments (FDI) has added a new dimension to the commercial relations. Since 2015, FDI from Arab Gulf States, especially from the UAE and Saudi Arabia, has witnessed a significant rise. In four years, between January 2015 and December 2018, India received US$3.13 billion FDI from UAE, while it received US$160 million FDI from Saudi Arabia.

 

Both Abu Dhabi and Riyadh have responded to New Delhi’s pitch for attracting greater foreign investments in key infrastructure and development projects. During his visit to India in February 2019, Crown Prince Bin-Salman underlined that since 2016, Saudi Arabia has invested US$44 billion in India’s petrochemicals and refinery sector and promised that in the next two years, Saudi investments will reach US$100 billion. India and Saudi Arabia also signed a framework agreement to explore possibilities for Saudi investment in India’s National Infrastructure and Investment Fund (NIIF). Similarly, in October 2017, the Abu Dhabi Investment Authority (ADIA) became the first foreign entity to commit an investment of US$1 billion in the NIIF. Another highlight of growing confidence of Saudi and Emirati investors in the Indian market was the signing of the US$44 billion deal between Abu Dhabi National Oil Company (ADNOC), Saudi national oil company Aramco and a consortium of three Indian oil companies to develop a refinery and petrochemical plant in India’s western coastal region . Though land acquisition for the proposed Ratnagiri Refinery and Petrochemicals Limited (RRPCL) has run into trouble due to protests from local farmers, the coming together of ADNOC and Aramco with Indian companies shows the growing confidence of the Gulf States to invest in India’s downstream petroleum sector.

 

India has also received commitments from Gulf oil companies to help it enhance its strategic petroleum reserves (SPRs). As of 2017, India had only 5.33 million metric tons (MMT) of oil reserve capacity that could provide for 10 days of its total oil consumption. India plans to expand its SPRs to 30 days of consumption capacity to which both ADNOC and Aramco have committed to assist India. Significantly, in February 2018, the ONGC Videsh acquired a 10 percent stake in UAE’s Lower Zakum oil field for US$600 million. In addition to the refinery and petrochemical sectors, Gulf countries are also attracted to infrastructure, Information Technology (IT), agriculture and healthcare sectors in India. The increasing investments are not only a result of better political relations, but also a recognition India’s economic potential as the fastest growing and expanding market in the world. At the same time, it underlines the desire of the Gulf countries to diversify their investments to Asia in view of the stagnating markets in the West.

 

Security and defence is another area in which India and the Gulf countries have significantly expanded their cooperation, most importantly in counter-terrorism, combating radicalism and intelligence sharing. India and the Gulf countries recognize their vulnerabilities against terrorist threats emanating from South and West Asia. The common threats from global terrorist groups, such as Islamic State of Iraq and Syria (ISIS) and al-Qaeda, have led India and Gulf countries to establish real-time intelligence sharing and counter-terrorism mechanisms. It helped in detention of many Indian youths, who had been radicalized through online mediums and wanted to join the ISIS. Some were detained by authorities in the Gulf and were deported back to India. Many others who were part of terror financing networks operating in the Gulf countries have also been detained and deported. On its part, India has been forthcoming in offering its expertise for capacity building and training of security forces in Gulf countries in counter-terrorism.

 

On the other hand, India has sought support from the Gulf countries in its fight against terrorism emanating from Pakistan. India first recognized the need for seeking cooperation from Gulf countries after the November 2008 attacks in Mumbai. New Delhi reached out to the UAE and Saudi Arabia that responded positively by handing over several Indian fugitives involved in planning and financing of terrorist activities in India. It included one of the masterminds of the Mumbai attacks, Fasih Mohammed, who was extradited to India from Saudi Arabia in 2012. Flagging of cross-border terrorism in bilateral talks with Gulf countries has resulted in Riyadh, Abu Dhabi, Doha and others condemning terrorist attacks by Pakistan-based terrorist groups on military installations in Jammu & Kashmir (J&K); a serious departure from the past when the Arab Gulf countries supported Pakistani position on J&K. This new dynamics became increasingly clear in the aftermath of the Pulwama attack, perpetrated by Jaish-e-Mohammed (JeM) on a CRPF convoy in which 40 soldiers lost their lives.

 

India has been working on enhancing defence cooperation with countries such as the UAE, Saudi Arabia and Oman. New Delhi has agreed to expand defense cooperation with these countries in the fields of exchange of expertise and training, joint air, naval and land exercises, collaboration in joint defense production, maritime security and in the areas of space, science and technology, remote sensing, satellite communication and navigation. In May 2016, then Defence Minister Manohar Parrikar became the first Indian Minister to visit the UAE and Oman and discussed the possibilities for joint defence manufacturing and Indian military exports to UAE. During Modi’s visit to Oman in February 2018, India and Oman agreed to allow access to Indian naval ships to the strategically located Duqm port. Similarly, during the visit of Bin-Salman to New Delhi in February 2019, “the two sides agreed to constitute a ‘Comprehensive Security Dialogue’ at the level of National Security Advisors and set up a Joint Working Group on Counter-Terrorism.” Moreover, India has allocated five seats for Saudi military officers in the National Defense Academy, Pune and the first batch of Saudi cadets joined the three-year training programme in December 2017.

 

Recent developments underline a new confidence in India’s relations with the Gulf. On both sides, there is a recognition of the immense potential to strengthen bilateral ties with a focus on economic development and security cooperation. India understands the significance of investments from the Gulf and seeks to expand defence cooperation with the key regional players. On the other hand, the Gulf countries appreciate India’s growing global stature and strong economic credentials, and hence seek proximity with New Delhi. An important development underlining the growing synergy between India and the Gulf was the invitation to India to be the “Guest of Honour” in the 46th Council of Foreign Ministers meeting of the Organization of Islamic Cooperation (OIC) on March 1, 2019.

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the view of Manipal Advanced Research Group.