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Power shifts and re-calibrations: India and the Gulf (economictimes.indiatimes.com)


By Sanjay Pulipaka and Mohit Musaddi

Recently, Saudi Arabia has reportedly turned down Pakistan’s request for an immediate meeting of foreign ministers of Organisation of Islamic Cooperation (OIC) to discuss the Kashmir issue. While the Saudi reluctance does not imply that the OIC will not discuss Kashmir, it suggests a marginal modification in its policies on India’s core concerns. Probably, such modifications are a consequence of changing geopolitics caused by shifts in US-Arab relations.

Over a month ago, while addressing the nation on the Iran crisis, the United States (U.S.) President Donald Trump stated : ‘We are now the number-one producer of oil and natural gas anywhere in the world. We are independent, and we do not need Middle East oil’. At a time when U.S. diplomatic and defence forces were in full-scale engagement in the Middle East, Trump’s statement suggested that the stakes for Washington in the region were fast diminishing. The reduced dependence on Middle Eastern oil for the economic survival of the U.S. implies that the nature and commitment of Washington to the region’s security will witness a significant change. The countries in the Gulf Cooperation Council (GCC) and other energy-dependent countries, such as India, have long recognised this trend and are recalibrating their policies to the shifts in the balance-of-power.

Quite often, the analysis of balance-of-power tends to view nation-states as pieces on a Chessboard which can quickly adjust to changing realities. In the real world, however, nation-states will take time to reconfigure their policies as developing institutional linkages, economic interactions, people-to-people connect, and a change in the mode of thinking tends to be a long-drawn process.

Given the power shifts, India has acquired an increased salience for the GCC countries. Moreover, India, which is a maritime neighbour, with its 2.6 trillion-dollar economy, leading consumer of energy resources and with a robust defence apparatus fits into the Gulf countries’ notions of a strategic partner. Economically, India and the Gulf are more connected today than ever before. The United Arab Emirates (UAE) and Saudi Arabia are India’s third and fourth-largest trading partners respectively and the total bilateral trade of the GCC countries with India for the year 2018-19 stood at USD 121.34 billion. UAE also features in the top 10 sources of FDI inflows into India.

The reported statement of the Saudi Arabia Ambassador to India on a potential investment of USD 100 billion in the areas of energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining by Riyadh have generated considerable interest. Of course, India’s dependence on West Asia for crude oil is paramount as New Delhi primarily imports oil from Iraq, Saudi Arabia and the UAE. Saudi Arabia investments are also increasing in India. The recent announcement of a USD 15 billion deal between Saudi Aramco and Reliance Industries will see Aramco acquire a 20 % stake in the Jamnagar Refinery in India.

India’s ONGC Videsh has acquired a 10 per cent stake in an offshore oil concession in Abu Dhabi for USD 600 million. An Indo-Oman joint venture, Sebacic Oman is undertaking a 1.2 billion USD project to set up the largest sebacic acid plant in the Middle East. There is also a significant hunger for investment in infrastructure in India which Arab countries can tap into through collaboration with Indian firms for long-term gains. Arab capital and Indian technology have the wherewithal to evolve into a formidable coalition. Investing in India will have long-term positive benefits for the Arab countries as India, with a market of 1.3 billion offers unmatched potential.

An important factor in the growing economic relations between India and the Gulf is the vast Indian diaspora in the region. Ministry of External Affairs of India estimates that as of December 2018, the six countries of the GCC are home to more than 8.5 million Indians. This has resulted in massive inflows of remittances and relaxation in visa rules. In fact, out of 78.6 billion USD received in remittances by India in 2018, 48.5 billion USD came from the six GCC countries.

Power shifts and re-calibrations: India and the Gulf 13 |

In addition to economic imperatives, the Indian leadership has made strenuous efforts to build better relationships in response to the shifting balance-of-power. Sustained engagement of Prime Minister Modi through his ‘Link West Policy’ has brought the Gulf closer to New Delhi. During his time as Prime Minister (PM), Modi has visited UAE thrice, Saudi Arabia twice apart from visits to Bahrain, Oman and Qatar. Outside the GCC, the Indian Prime Minister has also visited Turkey, Jordan, Israel, Palestine and Iran in the Middle East. Today, the relationship between the leaders of the Gulf and India is one based on camaraderie and respect. Specific examples of bonhomie include the Indian Premier breaking protocol to personally receive Saudi Crown Prince Mohammad bin Salman in New Delhi, PM Modi receiving the ‘Order of Zayed’, the highest civilian order of the UAE and the ‘King Hamad Order of the Renaissance’, the third-highest civilian order of Bahrain.

India, in the recent past, has demonstrated an enhanced appetite to forge security partnerships with the Gulf States. This is evident in the recent Joint Statements between India and the UAE as well as India and Saudi Arabia where the respective leaders have vowed to enhance anti-terror cooperation with India, including combating the growing presence of ISIS. Another impetus to security cooperation between India and the Gulf is the numerous bilateral defence exercises. Apart from the participation of Saudi Arabia, Oman, Kuwait, Iran and others in India’s mega multilateral Milan Exercise, India also has bilateral exercises with most of them. India and Oman hold annual bilateral exercises across all three wings of the armed forces. Further, Oman has provided the Indian Navy access to the Port of Duqm SEZ which is one of Indian Ocean’s largest deep-sea ports. India has a bilateral naval as well as an air force exercise with the UAE and is set to hold its first bilateral naval drill with Saudi Arabia in March this year.

In addition to India and the Arab countries, others are also recalibrating their policies to the evolving power shifts. Recently, a trilateral maritime exercise was held between Iran, Russia and China in the Gulf of Oman and the Indian Ocean. These developments suggest a steady increase in the density of international actors seeking to shape the geopolitics of the region. However, unlike others, India has been careful not to partake in regime-change tactics or intra-regime politics of various countries. Further, New Delhi has refrained from deploying resource extractive approaches to define its engagement with the Arab world, which is not surprising given the deep and respectful civilisational connect between the two.

A prudent response to shifts in balance-of-power mandates giving up old habits. While India has refrained from bandwagoning with the Western punitive approaches on democracy promotion and human rights, some of the Arab countries are struggling to give up their old positions on multilateral platforms such as the Organisation for Islamic Cooperation (OIC). At the bilateral level, issues such as Kashmir were relegated to the background. In the recent past, Saudi Arabia and the UAE have not adopted hostile posture to New Delhi’s domestic developments such as the abrogation of the temporary provision pertaining to Kashmir (Article 370). Instead, the Saudi Crown Prince Mohammad bin Salman had a successful trip to New Delhi soon after the abrogation of Article 370, during which five Memorandum of Understandings (MoUs) were signed. However, at a multilateral level, the statements on Kashmir often conveyed unwarranted unfriendliness towards India. Saudi Arabia’s recent refusal to support Pakistan’s demands for an immediate meeting of the OIC Foreign Minister’s meet on Kashmir is a step in the right direction. Nonetheless, it should be noted that Saudi Arabia reportedly offered to hold a joint meeting on Palestine and Kashmir issues, which was rejected by Islamabad as it feared that Kashmir would not receive enough attention. Giving up such old habits of criticising India on multilateral platforms will constitute the last hurdle for the establishment of a genuine strategic partnership between India and the Arab world.

(Sanjay Pulipaka is currently a Senior Fellow at the Nehru Memorial Museum and Library, New Delhi and Mohit Musaddi is a Research Associate at the Delhi Policy Group, New Delhi. The views expressed here are personal.)

DISCLAIMER : Views expressed above are the author’s own.

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