14th June 2022 (7 Topics)
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Why are India’s economic stakes high in West Asia?
Context
Organization of Islamic Cooperation (OIC) and the six-member Gulf Cooperation Council (GCC) strongly opposed the remarks defaming Islam and the Prophet Muhammad by the now-suspended and expelled BJP leaders Nupur Sharma and Naveen Kumar Jindal.
About
OIC’s Response:
- The OIC calls on the Indian authorities to decisively address the incidents of defamation and all forms of insult to the noble Prophet and Islam and to bring those who incite and perpetrate violence against Muslims to justice and hold those behind them accountable.
- It also calls on the Indian authorities to ensure the safety, security and well-being Muslims in India and protect their rights as well as religious and cultural identity, dignity and places of worship.
India’s Response:
- Indian officials insist that the government stands by the country’s traditional values and respected all religions.
- It also tasked its diplomats to reach out to individual OIC member states and reassure them on India’s position of an ‘inclusive’ approach to all communities.
INDIA AND GULF REGION:
What prompted the government’s response?
- Countries in the West Asian region collectively account for one-sixth of India’s total bilateral trade and contribute about three-fifths of India’s crude oil supply.
- The region is a major provider of jobs and economic opportunities for Indian workers, professionals and entrepreneurs and is home to approximately 8.9 million Indians.
- These non-resident Indians (NRIs) send home about $40 billion annually, and contribute more than 55% of the country’s total remittance flows.
- Investments from Sovereign Wealth Funds and other large GCC investors have also grown rapidly in recent years.
- India has signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates earlier this year, has become one of the biggest contributors to the region.
- India wants to significantly promote business relations with negotiating more such trade and investment agreements.
India’s dependence on West Asian countries for its energy needs:
- Domestic crude oil production meets less than a fifth of the country’s oil requirement, forcing India to rely on imports to fill the gap of over 80%.
- Observer Research Foundation (ORF) analysed that the share of Gulf countries of India’s total crude oil imports has remained fairly stable over the past 15 years at around 60%.
- The ORF study found that in 2020-21, India’s top oil exporter was Iraq with a share of over 22%, followed by Saudi Arabia – at around 18%.
- UAE, Kuwait and Oman were other Gulf countries among the top-10 suppliers of crude oil to India in 2020-21.
How dependent is India on the region for non-oil trade?
- In the five years from 2017 to 2021, Iran and GCC member states including the United Arab Emirates, Saudi Arabia, Bahrain, Oman, Kuwait and Qatar accounted for 15.3% of India’s cumulative two-way trade trade of $3.98 trillion over that period.
- The region is today a major market for many Indian goods, from tea and basmati rice to electrical equipment, apparel and machinery.
- With the region acting as a major hub for markets in Africa, India is keen to have tariff-free access to its exports not only in the Gulf region but also in countries in Africa.
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