A strategic vision for India’s ties with the Gulf

INDIA’S trade and economic relations with the US, the UK and other western nations get considerable attention. There is nothing wrong with that. What does not get equal attention, but should, is India’s booming ties with countries in the Gulf region.

India does have a ‘Neighbourhood First’ policy, but there is still uncertainty and even controversy on how one defines the country’s ‘neighbourhood’. Many have often been satisfied with defining it as being the area between the Khyber Pass and the Bay of Bengal. The time may have come to include the six Arab countries across the Arabian Sea and in the Persian Gulf — the United Arab Emirates (UAE), Saudi Arabia, Oman, Kuwait, Qatar and Bahrain —as part of India’s larger neighbourhood. These six Arab countries are politically, diplomatically, economically and strategically linked by way of the Gulf Cooperation Council (GCC). Formed in 1981, the GCC is a regional body that seeks to promote greater economic, political and military cooperation amongst its six member-states.

India has historically enjoyed strong ties with the GCC member-states, shaped by geographic proximity, historical trade links, energy security and the presence of a large Indian diaspora. Over 8.9 million Indians live and work in the GCC countries, making it one of the largest expatriate communities in the region. The UAE hosts the largest number of Indian nationals, totalling 3.5 million, followed by Saudi Arabia (2.6 million) and Kuwait (over 1.1 million). Oman has 7,79,000 Indians, Qatar 7,45,000 and Bahrain 3,23,000. This large and thriving expatriate population is a key source of remittances for India. In 2023-24, India received $123 billion in remittances, with the Gulf Arab countries accounting for a major part of the inflows. The UAE alone accounted for 18 per cent of India’s total remittances, making it the second largest sender of foreign remittances, after the US.

With the Gulf countries supplying a substantial portion of India’s crude oil and natural gas needs, the GCC is one of India’s largest trading partners (surpassing even the European Union) and critical for our energy security. Given the crucial importance of the six Arab Gulf countries, India has necessarily to take forward the growth of bilateral relations with all members of the GCC, with particular attention on the UAE and Saudi Arabia. The Arab Gulf countries have historically had thriving two-way trade relations with ports on India’s west coast, notably in Kerala. Incidentally, there are indications that the UAE and Saudi Arabia are in the process of arranging living facilities for a large number of new Indians who are expected to arrive for work.

India has also been increasing its military ties with the GCC countries through joint exercises and security dialogues. The Gulf countries have tended to rely on the western powers. Notably, Qatar and other Arab countries across the Persian Gulf provide land and other facilities to the US military. Maritime support is extended by the Central Command of the US Fifth Fleet, with its headquarters located in Manama, Bahrain, together with the Royal Australian Navy.

India can also play a role in ensuring maritime security of the Arab Gulf region. The Indian Navy has a wide variety of vessels that it could deploy for this purpose. India has two aircraft carriers, eight tank landing ships, 11 destroyers and 12 frigates, apart from 16 attack submarines, which it could utilise when needed. Following the escalation in attacks by the Houthis on shipping in the Red Sea, the Navy deployed at least a dozen warships in the Arabian Sea and areas east of the Red Sea, marking its largest deployment in the region. Moreover, New Delhi has constructed and commissioned two nuclear submarines — INS Arihant and INS Arighaat — which could be deployed for strengthening the security of the friendly countries in the region, when needed and requested. Such issues have to be carefully planned and taken forward in consultations with the friendly countries. India’s naval forces are now receiving due consideration while determining the country’s future role in regional security.

Prime Minister Narendra Modi’s focus on the Gulf region and, in some cases, his strong personal equations with leaders of some countries in the region have helped add new dimensions to the relations. Modi has visited the UAE a record seven times as PM. He has visited Saudi Arabia and Qatar twice. Abu Dhabi leads in record remittances to and investments in India from the region. The UAE is the largest Arab investor in India. It was the sixth largest FDI source in 2023-24 and is the seventh largest overall since 2000.

Another ambitious new global initiative involving India and the Gulf countries is the launch of a new trade route announced during the G20 meeting held in New Delhi in September 2023. The US President, Joe Biden, along with leaders of India, Saudi Arabia and the UAE, unveiled the route that would connect India to West Asia and Europe through railways and ports. Some analysts say that it will be an alternative, if not a direct challenge, to China’s Belt and Road Initiative. Other than the Arab countries, the plan includes the European Union, France, Italy and Germany. It comprises two separate routes — an eastern corridor linking India to the Gulf Arab states and a northern corridor connecting the Gulf states to Europe.

The PM’s Gulf initiatives have been further buttressed by the setting up of institutional mechanisms for cooperation. The first India-GCC Joint Ministerial Meeting for Strategic Dialogue took place in early September. A Joint Action Plan was adopted for 2024-2028, focusing on enhancing cooperation across sectors, including trade and investment, energy, health, transportation, health, agriculture and cultural exchange. The meeting also highlighted the importance of defence collaboration and counter-terrorism efforts. Given the complex geopolitical landscape and the challenges posed by the worsening conflicts in Ukraine and Gaza as well as the tensions involving Iran and Israel, there is a shared interest in maintaining regional stability and security.

Clearly, India’s multifaceted relationship with the GCC countries is and will continue to be an integral element of its rising economic and political power in the global arena.