Oct 13, 2011

India and the Gulf

Tayyab Siddiqui While Pakistan is caught in the vortex of political anarchy and economic instability, India is making rapid strides in the Gulf as the most influential regional power. India’s emphasis is on economic relations with the countries of the region where two-thirds of its oil imports originate. There has been a phenomenal increase in India’s relations with Saudi Arabia, in particular, which meets 36 percent of India’s energy needs. Its trade with Saudi trade has risen threefold over the last five years and its investment there doubled in the same period. India is Saudi Arabia’s fifth-largest trading partner, and the fifth-largest market for Saudi exports. There are huge opportunities of Indian-Saudi cooperation in the oil, power and IT sectors. Before Dr Manmohan Singh became prime minister in May 2004, India’s relations with the region had largely suffered from neglect. Dr Singh designed a vigorous strategy to make up for this. In January 2005, less than a year after he came into power, Dr Singh articulated India’s policy approach towards the Gulf. “Besides energy imports, there is also ample potential for India to evolve broader long-term economic relations with the region. This could include expanding our contacts with the Gulf Cooperation Council and other regional bodies into an enduring institutional relationship. We could also examine a more proactive strategy of seeking investments from West Asia (India’s preferred official term for the Middle East), given India’s emergence as an exciting and safe destination for foreign direct investment.” He visited Qatar and Oman in 2008. Another initiative was his invitations to heads of states from the Gulf countries as chief guests on India’s Jan 26 Republic Day ceremonies. These included then-president Hashemi-Rafsanjani of Iran and King Abdullah of Saudi Arabia. The Saudi king’s visit in 2006 visit was far from ceremonial, however. King Abdullah was accompanied by a 300-strong delegation, including 12 princes of the House of Saud. The emphasis was on closer economic partnership through investments and trade agreements. Energy was at the top of the agenda. Dr Singh’s three-day return visit to Riyadh last year, from Feb 27 to March 1, was a landmark in bilateral relations, in terms of both protocol and substance. (The previous visit to Saudi Arabia by an Indian prime minister had been Indira Gandhi’s trip in 1982 to Jeddah, where the Saudi government was then based.) The Indian prime minister was welcomed at the airport by the entire Saudi cabinet led by Crown Prince Sultan. During the visit, as many as ten agreements and MOUs were signed. Saudi Arabia agreed to double the supply of crude oil to meet India’s growing requirements. The process of expanding bilateral relations and intensifying cooperation between New Delhi and Riyadh is also manifested in terms of defence ties. Last week a delegation from the National Defence College visited Saudi Arabia. The NDC is one of the Indian military institutions where Saudi officers have participated in training programmes. India has enhanced its military ties with other Gulf states as well. This includes exchange of visits by service chiefs and naval ships. Another important instrument of India’s diplomacy in the region is the presence of Indian expatriates, including an estimated 1.8 million in Saudi Arabia. Their total number in Gulf states is estimated as six million. Their annual remittances to India are a major source of Indian foreign reserves, exceeding $50 billion. For Pakistan Saudi Arabia is its closest friend and “natural ally.” But while fraternal feelings do reinforce mutual friendship on the political level too, mere sentiments cannot be a strong-enough basis for sustainable bilateral relations. India’s aggressive diplomacy in the Gulf region can have serious affects on our national interests.

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