Saudi Arabia in focus
Bilateral trade between India and the Gulf Cooperation Council will rise above $25 billion this year.
Prime minister Manmohan Singh visited Saudi Arabia earlier this month after a long gap of 28 years and promptly elevated the Indo-Saudi relationship to a ‘strategic partnership.’ In the last few years India’s policy toward the Gulf region has often been viewed through the prism of India-Iran relations. The international community and the West in particular has been obsessed with New Delhi’s ties with Tehran and has tended to ignore India’s much more substantive engagement with the Arab Gulf states. Notwithstanding all the hype surrounding India’s ties with Iran, they remain largely under-developed even as the significant stakes that India has in the Arab Gulf often go unnoticed.
With his visit to Saudi Arabia, the prime minister has re-emphasised that when it comes to the Gulf, Iran will not be the focus of Indian foreign policy.
India managed to finalise not just an extradition treaty with the Saudis, but also an Agreement on Transfer of Sentenced Prisoners. These would allow India to rescue its citizens under death sentences in Saudi Arabia. Equally significant is the Saudi commitment to double the crude oil supply to India and forge an energy partnership with India. The Saudis have also indicated that they would be willing to use their leverage on Pakistan to cease its policy of using violent extremism as an instrument of its foreign policy against India.
The Saudi King had visited India in 2006 with much fanfare. It was also a signal to the broader Gulf Cooperation Council (GCC) community to build stronger partnership with India. India’s engagements with the GCC states have gathered momentum in the last few years even though India-Iran ties have continued to hog all the limelight. India’s desire to secure energy supplies as well as to consolidate economic and trade relations and the ‘look east’ policy of the Gulf States has allowed the two to carve a much more substantive relationship than in the past.
While India is not a Muslim-majority country, it still hosts the second-largest Muslim population in the world, a constituency that remains interested in Saudi Arabia as the site of the holy shrines at Mecca and Medina. Indians are the largest expatriate community in the GCC states, numbering around 4 to 5 million. Indian expatriate labour constitutes around 30 per cent of the total population of the UAE and they have significant presence in Bahrain, Oman, and Qatar.
The economic dimension of India’s Gulf policy has become more pronounced in recent years. As a group, the GCC is India’s second largest trading partner. It is the largest single origin of imports into India and the second largest destination for exports from India. Bilateral trade between India and the GCC is expected to rise above $25 billion this year.
Investment options
The global financial meltdown and recessionary trends in the US and Europe is prompting India to turn to Gulf states sitting on huge resources looking for investment opportunities. India is hoping that major GCC states such as Saudi Arabia, UAE and Oman would participate in India’s planned expansion of infrastructure. The Gulf states meanwhile are interested in human resource from India to develop sectors as varied as information technology, construction, transportation and services.
With an economy that is projected to grow at a rate of 7-8 per cent over the next two decades, meeting its rapidly increasing demand for energy in one the biggest challenges facing India. Burgeoning population, coupled with rapid economic growth and industrialisation has propelled India into becoming the world’s fifth largest energy consumer in the world.
Energy is clearly the driving force in Gulf-India relations. Riyadh is the chief supplier of oil to India’s booming economy, and India is now the fourth largest recipient of Saudi oil after China, the US, and Japan. India’s crude oil imports from the Saudi kingdom will likely double in the next 20 years.
India’s trade and energy security is inextricably linked to the security of the Straits of Hormuz and Bab el-Mandeb. With this in mind, Indian Navy is regularly visiting Gulf ports and training with regional states. In recent years, the Indian Navy has made port calls and undertaken a series of naval exercises with a number of Gulf states thereby lending its hand to Indian diplomacy in expanding India’s reach in the region.
India is cultivating close security ties with major GCC countries such as the UAE, Qatar, Oman and Bahrain with the focus shifting from naval ship visits and training exchange programmes to possible joint development and manufacture of sophisticated military hardware.
Tehran’s nuclear drive and Iranian president Mahmoud Ahmadinejad’s aggressive rhetoric is raising anxiety in the Gulf about a resurgent Iran. During his visit Manmohan Singh joined the Saudi King in asking Tehran ‘to remove regional and international doubts about its nuclear weapons programme.’
As the regional balance of power between Arabia and Persia threatens to unravel, Singh’s visit to the region has underlined India’s desire to see the extant balance of power in the region stabilises. Given India’s growing stakes in the Gulf, it is not surprising why this should be the case.
