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8th June 2022 (7 Topics)

Gulf and India relations

Context

After the recent controversy (comment made about Islam by Nupur Sharma), three countries in the Gulf region had summoned the Indian ambassadors to their nations to register their protest, and demanded a public apology from India.

Thus, it is important to assess the importance of Gulf region for India.

About

Maping the Geographical area

  • The Gulf Cooperation Council (GCC) is a political and economic union of Arab states bordering the Gulf.
  • It was established in 1981.
  • Its 6 members are the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain.
  • The GCC’s prime geographical location is at the crossroads of the major Western and Eastern economies.
  • Region wise, it is the fourth-largest trading partner for India, following North America, European Union, and Northeast Asia.

     

How ‘dependent’ is India on the gulf countries?

  • Cultural relations: India's relations with the people of the Gulf and the Arabian Peninsula date back several millennia when Indian sailors, merchants, intellectuals and men of faith traversed the waters of the Indian Ocean.
  • They exchanged navigation skills, goods, ideas and belief systems.
  • Economic and trade ties: Some of the major retail stores and restaurants in the Gulf countries are owned by Indians.
  • The calls to boycott Indian products could actually hit businesses owned by Indians.
  • The United Arab Emirates is India's third-largest trading partner. 
  • Oil Imports: The share of Persian Gulf countries in India's crude imports has remained at around 60% over the last 15 years. 
  • Energy: GCC countries, with large hydrocarbon reserves, are crucial for India’s energy requirements while the region has been a good market for Indian products.
  • Indian diaspora: There is a huge presence of Indians in the GCC countries particularly Saudi Arabia and UAE, in the form of skilled and unskilled workers.
  • International treaties: Negotiations for the India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA) are in a crucial phase of talks.
    • India and GCC members are members of the FATF.
    • India has multilateral and bilateral military exercises with most of the GCC countries.

India’s role in Gulf countries:

  • The Gulf countries are especially reliant on food and cereal imports.
  • Over 85% of their food and 93% of their cereals are imported.
  • Rice, buffalo meat, spices, marine products, fruits, vegetables, and sugar are all key exports from India to the Gulf nations.
  • India's bilateral trade with all the six members of GCC (Gulf Cooperation Council) group countries, including the UAE and Saudi Arabia, has increased significantly in 2021-22. This is due to the increasing economic ties between the two regions.
  • India is also taking tentative steps towards defence cooperation. For example participation of Saudi Arabia, Oman, Kuwait, and others in India’s mega multilateral Milan Exercise.
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