India Look West Policy and Its Impact on Indian GCC Relations

International Politics, Vol. 3, No. VI, Summer & Autumn 2010

India’s ‘Look West’ Policy and Its Impact on India‐ GCC Relations

Ginu Zacharia Oommen1

Khurshid Imam2

Abstract

The era of globalization has seen rapid changes in the geo‐political

situation the world over. The axis of power has seen shifts and new

centers of power have emerged to the fore. In this dynamics of

international politics, India too re‐oriented her foreign policy. The

first stage in this orientation was consolidation of her position in

south‐east Asia through what is referred to as ‘look east’ policy. The

second phase focused on the west Asian region through a policy

being termed as ‘look west’ policy. The look west policy of India

coincided with the ‘look east’ policy of Saudi Arabia and other

Persian Gulf countries particularly in the aftermath of 9/11. The

congruence of policy interest has resulted in the consolidation and diversification of political and economic relations of India and GCC

countries. The main purpose of this research is to analyze the bilateral

relations between Indian and GCC countries in the framework of the

changed international scenario and the mutual interest at the policy

level which is reflected in the bilateral trade and commerce and

created a win‐win situation for both sides. Keywords: India, GCC, Look West Policy, Diaspora, Persian Gulf

1. Hermes Postdoctoral Fellow at MIGRINTER, University de Poitiers France,

and Visiting Faculty at the {Persian}Gulf Studies Program, JNU, India.

E‐mail: [email protected]

2. Assistant Professor, Center of Arabic and African Studies, Jawaharlal Nehru

University (JNU), India.

E‐mail: [email protected]

International Politics 72

Introduction

The countries geographically on India’s west comprising of Iran,

Fertile Crescent, North Africa and Persian Gulf countries are

considered to be West Asia in the map of India’s foreign policy.

Though India had historical connections with this region the changed

circumstances required a relook in its policy. To secure the growing

interests in the western neighborhood—from energy security to

counter‐terrorism—India reoriented her ad hoc responses to

individual crises and define what we call a ‘Look West’ policy. The

terminology got acceptance in the academic and intellectual circles in

juxtaposition to ‘look east’ policy of India.

The geo‐political churnings in the last one decade has compelled

Indian foreign policy makers to relook India’s strategic and economic

policies towards its neighbors. The American invasion of Iraq, the

‘war on terror’, the weakening of United Nations, the economic

recession, the subsequent fluctuation in the oil prices, the

unprecedented food crisis in the world and the Euro‐Dollar crisis has

forced the growing Asian economy to restructure its outlook towards

the outside world. Moreover, India realized that her unending

aspiration to be a member of UN Security Council could be

materialized only through its strong bondage with the powerful

regional powers like Iran, Saudi Arabia, South Africa, Brazil, Russia,

China etc. It is in this context that the head of governments of both

Iran and Saudi Arabia were the chief guests in India’s republic day

parade in 2003 and 2006 respectively.

The present paper is an effort to analyze India’s ‘look west’ policy

and the unprecedented expansion of both diplomatic and trade

relations with the countries of {Persian} Gulf Cooperation Council

(GCC). Hence, each of the GC countries would be individually

examined with regards to its relationship with India to find out if the

‘look west’ policy has really converted into enhanced and diversified

bilateral relationship.

India’s ‘Look West’ Policy... 73

India’s ‘Look West’ Policy

India’s diplomatic profile in the West Asia was determined by a

combination of factors such as energy needs, remittance, strategic

alliances and religious considerations. India’s West Asia policy has

operated within the framework of the international power structure

articulated on political, ideological and moral terms till the end of

cold war era. The ideological and moral terms were based on the

underlining principles of non‐alignment, support for national

liberation struggles ‐ highly influenced by Mahatma Gandhi, and our

commitment towards the bondage between Asia, Africa and Latin

America.

In the post‐cold war period economic, energy security related

issues have taken precedence over moral and ideological

considerations. The major strategic shift in the India‐West Asia policy

was during Narasimha Rao led Congress government and Vajpayee’s

BJP (Bhartiya Janata Party) government. Narasimha Rao government

assumed power in 1991 when the world politics was entering a new

era of American hegemony on world politics and the subsequent

emergence of other power centers like European Union, China etc.

At the geopolitical level, the emergence of five sovereign nation

states in central Asia had its bearing on India‐West Asia relations.

(Pradhan, 2004, 14) At this juncture the Rao government treaded

away from the Nehruvian socialism, non‐alignment and anti‐

imperialism towards economic liberalization and moved closer to the

US. Henceforth the US factor played a major role in influencing

India’s foreign policy orientation. This brought in the Zionist Israel

into the core of India’s West Asia policy orientation. Within West

Asian countries India’s focus has not been uniform to a particular

country and has seen changes in its focus. Initially Egypt, Palestine

and Iraq were the focus of India’s foreign policy and later India’s

West Asian policy was reoriented towards Israel, Iran and Saudi Arabia.

Historically the West Asia region has always been a comfortable


neighborhood to the Indian subcontinent. During the time of

Vajpayee led BJP government the focus of West Asia shifted in favor

of a tripartite axis India‐Israel‐USA. However with the coming of the

United Progressive Alliance (UPA) government there was a strategic

shift in the Indian foreign policy towards its immediate neighbors.

The adoption of ‘Look West policy’ in 2005 by the UPA I government

reflects the increased inclination of India towards its West Asian

neighbors. In July 2005 Prime Minister Manmohan Singh in a

meeting of Prime Minister’s Trade and Economic Relations

Committee collectively encouraged the cabinet to pursue the ‘Look

West’ policy The focal point of the meeting was to kick start the

India‐ GCC free trade agreement talks and comprehensive economic

agreements with all the GCC countries. In this meeting Manmohan

Singh stated that “The {Persian} Gulf region, like South Asia is a part of

natural economic hinterland. We want to pursue close economic relations

with all our neighbors in our wider West Asia neighborhood. India has

successfully pursued a look east policy to come closer to the countries of

South East Asia. We must similarly come closer to our West Asian

neighbors in the {Persian} Gulf.” (Baru, 2010, 5)

Strategic relevance of the GCC countries to India has to be placed

within the wider framework of strategic geographic and economic

terms. The Persian Gulf is an inseparable part of India’s foreign

policy that serves mutual interests, confronts terrorism and

extremism, as well as taps the investment potential. The GCC is a

capital rich region that needs to invest abroad while India is a capital

deficient regional power that needs investment. Since 2004 the

bilateral engagement has also gathered momentum in terms of high

level visits, signing of various MoUs and a remarkable growth of

Trade and Commerce between India and GCC. Indian Prime Minister

Manmohan Singh visited Qatar and Oman in 2008 and Saudi Arabia

in 2010. During his visit in February‐March 2010, he signed the most

significant Riyadh declaration with the Saudi King Abdullah bin


Abdul Aziz. At the same time Vice President Hamid Ansari also

undertook a high level visit to Kuwait in April 2009 and signed

significant agreements in the field of education, science and

technology and cultural exchange program. Later in November 2010

Indian President Pratibha Singh Patil visited UAE and urged the UAE

government to invest in the Indian infrastructure. (Pradhan, 2010)

Over the years India has evaluated and tuned her policies to match

the rapid changing international power structure finally emerging as

a regional power and trustworthy partner. The post 9‐11 world

scenario is very different and has deeply affected the world order. It

is to be noted that Iran too has a prominent position in India’s Look

West policy especially due to the strategic control of Iran on the

straits of Hormuz. Iran could play an important role in joint maritime

security operations with India in the Persian Gulf region; and also as

a strategic partner of India in the reconstruction of Afghanistan.

Moreover, Iran’s capability of providing India with oil and gas at a

relatively lower price adds to its prominence in the ‘look west’ policy

of India. (Pant, 2004, 378)

At present the India‐GCC relation figures prominently in the look

west policy of India as this sub‐region is the major economic hub in

the West Asian region. The relationship between India and the GCC

has grown since the formation of the organization in 1981. The GCC

States (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United

Arab Emirates) are the key global suppliers of hydrocarbons. They

contribute around 42 per cent and 24 per cent of the world total oil

and gas reserves respectively. Ever since 1947 the bilateral relations

between India and the GCC states have evolved greatly to touch

almost the $20 billion mark in non‐oil trade while the oil trade

amounted to about $26 billion in 2005‐2006. According to the

Department of Commerce, Government of India, the total trade

between India and the GCC countries for the years 2008‐2009 stands

at US$91.63 billion with total imports of US$59.5 billion and total


exports of US$32.13 billion. (India, Ministry of Commerce and

Industry, 2010) Moreover, Indians comprise the largest expatriate

community in the Persian Gulf region.

The relations between India and the GCC countries become a vital

subject for both the policy makers and the academics alike because of

the presence of a large number of Indians in these countries.

Currently, West Asia contributes to 35 per cent of total inward

remittances, followed by 30 per cent from North America, 20 per cent

from Europe, and 10 per cent from other regions. The GCC countries

too, as part of their ‘look east’ policy, are looking for non‐Western

economies to invest their surplus funds and they are also keen on

diversifying their petroleum‐based economies by moving into the

knowledge industry. It is here that India becomes a natural choice

which can play a leading role given its leadership in information

technology and skilled manpower.

Each GCC state has a unique profile. Though there are basic

commonalities in the policy orientation of these countries, they do

maintain independent outlook and exclusively address to their

national and local interests. This makes the task of Indian policy

makers towards West Asia more complex. Each GCC state requires

an independent approach and a policy that is independent of the

other GCC states. It is in this background that this paper tries to look

into each GCC country and its relations with India individually.

Saudi Arabia

Saudi Arabia has a unique place in West Asia. India‐Saudi relation is

time tested and there has been close political, economic and cultural

ties between the two regions throughout history. The relations have

relatively been cordial over the years with intervening flare ups as

during the India‐Pakistan wars of 1967 and 1971. Pakistan’s effort to

mobilize Arab/Islamic states to its side on Kashmir and other issues

related to Muslims in India could not do much. The special place that


Pakistan had in the Saudi’s policy did not make any substantial

change in the relations with India. On Saudi Arabia’s request an

Indian delegation led by Fakhruddin Ali Ahmed participated in an

Islamic Conference in Rabat on September 22‐25, 1969 to discuss

Jerusalem’s Al‐Aqsa mosque. The Saudi government never imposed

any embargo against India during the 1970s oil crisis and India

continued to receive 25 million metric tones (175 million barrels) of

oil annually. Being the biggest source of crude oil in the OPEC it has

the biggest say in moderating the supply and pricing of oil.

The unprecedented strains in the US‐Saudi relations in the

aftermath of the 9/11 had its repercussions on Indo‐Saudi relations.

The geo‐political churnings in West Asia especially, the war on terror

by US led allies has led to some reorientation in Saudi’s foreign

policy. American rhetoric of democracy and the regime change in the

Persian Gulf States and its subtle attacks on the Saudi royal family

for latter’s alleged involvement in mobilizing funds for terrorist

outfits have altered the pro‐Western perceptions of Saudis to a great

extent. Moreover, the fastest economic growth in India and China

and the emerging Asian market marked a significant change in the

Saudi’s foreign policy towards Asia. It is in this backdrop one should

analyze the look east policy of Saudi Arabia and King Abdullah’s

historic visit to India and China in 2006. India has reciprocated each

gesture by looking west towards West Asian countries.

Signing of the Delhi Declaration in 2006 during the King’s visit

gave new impetus to the development of increased understanding

and cooperation between India and Saudi Arabia. (Kapila, 2006) The

declaration stressed on two major issues, energy security and

terrorism along with the commitment to work closely in various

aspects like health, research and education, IT, agriculture, sports,

pharmaceuticals and so on. Regular meetings of the joint commission

were also agreed upon for the speedy implementation of the Delhi

Declaration. During King Abdhullah’s visit the leadership of both the


countries shared their position on various issues like Palestinian crisis

and reaffirmed their commitment for peace, stability and prosperity

in the region. India also offered for Saudi students to pursue post‐

graduate and doctorate level studies in technical institutions in India,

and enhance cooperation in human resources development related to

telecommunication. (Times of India, January 27, 2006)

The Saudi King as the Chief Guest for the Indian Republican Day

Parade in 2006, hinted at inclusion of India in the Organization of

Islamic Conference (OIC) as an observer. India has the second largest

Muslim population in the world and yet has been denied the

membership of OIC, mainly due to vehement opposition from

Pakistan. OIC has visible and strong presence globally as it accounts

for 29 per cent of the total membership of the U.N., 47 per cent of the

African Union, and 100 per cent of the membership of the Arab

League, the GCC, and the Economic Cooperation Organisation

(ECO). In addition, three of the seven members of the South Asian

Association for Regional Cooperation (SAARC) and three ASEAN

states are in OIC.

India’s Vice President Hamid Ansari is of the opinion that “neither

an ostrich‐like posture of ignoring the OIC nor an avid embrace would serve

India’s purpose. Incremental interaction, and a quiet insistence on the

restoration of the original membership, would be a better alternative.”

(Ansari, 2006, 7) Therefore in the changing geo‐political situation it is

imperative for India to move closer with OIC which requires active

support of leading West Asian countries like Saudi Arabia, Iran etc.

As the custodian of the two most holy Islamic sites it acts as a pillar of

regional stability settling intra Muslim states disputes and matters

relating to West Asian and Persian Gulf regions. Its place in the

Muslim world is also critical for other states with large Muslim

population including India. The argument in favor of third party’s

(Saudi Arabia) intervention in Indo‐Pak relations is conceived in the

background of Saudi Arabia’s position.


Both India and Saudi Arabia reiterated the commitment towards

combating global terrorism through strategic cooperation. The Delhi

Declaration too highlighted that “terrorism is the scourge of mankind

and the urgent need to intensify and coordinate bilateral, regional and global

cooperation to eradicate and combat the menace of terror.” (Kapila, 2006)

Both the countries have agreed to erase mutual misperceptions and

realized to work together in the new‐fangled and volatile

international order. The security and stability of the Persian Gulf

region is of utmost concern to India and India is ready to share its

expertise with Saudi Arabia in containing terrorism and to establish

steadiness in the region.

Saudi Arabia has also made necessary changes in its laws to adjust

to the changes in the international market. The new relaxations in

Saudi commercial law have strengthened the bilateral investments

between both countries to a great extent. Indian companies including

ONGC have been given green signal by the Saudi government to set

up oil refineries and develop gas fields in Saudi Arabia. India is

grabbing this opportunity in the midst of growing energy

consumption and its limitation in the diversification of energy

sources. Saudi Arabia too is very much interested in investing in

India and currently around 49 Saudi companies are engaged in joint

ventures in India. (Aneja, 2008) The Reliance industries have

expressed an interest in establishing the proposed Jizan refinery in

south‐west Saudi Arabia. In the last five years many dignitaries

including the then Finance Minister P. Chidambaram, External

Affairs Minister Pranab Mukherjee, Deputy Chairman of Planning

Commission Montek Singh Aluwalia have visited Saudi Arabia to

strengthen both political and economic relations.

India is the fourth largest trading partner of Saudi Arabia with a

bilateral trade of more than US $25 billion. (Siddiqui, 2010) Indian

companies are the fifth biggest investors in the country. India also

imports organic and inorganic chemicals, metal scrap, leather and


gold from Saudi Arabia. India is the fourth largest importer of Saudi

oil after South Korea. The Saudi government has promised India

during the King’s visit an uninterrupted supply of oil for next two

decades on “evergreen long term contracts.” Indian exports to Saudi

Arabia includes basmati rice, tea, cotton, coffee, spices, tobacco, yarn,

primary and semi finished iron and steel, fabrics, chemicals and

machinery. During 2004‐2005 India exported basmati rice worth $350

million to Saudi Arabia and it is the largest item that India exports to

Saudi Arabia. Interestingly, India’s trade and commerce with Saudi

Arabia is steadily ascending since 2001 and it has progressively

increased from US $1444.06 million in 2001 to US $1861.08 million in

2004. However the global economic crisis and the subsequent

instability in market have reflected in Indo‐Saudi Arabia bilateral

trade as well. The total trade between the two countries has lowered

from US $25083.12 in 2008 – 09 to US $21004.57 in 2009–10. (Ministry

of Commerce and industry, 2010)

Both the nations are expected to expand trade and cooperation and

joint ventures in telecommunications, pharmaceuticals, health

services, information technology, biotechnology, agriculture,

construction projects, energy and financial services. Both the

countries have agreed to launch joint ventures for developing gas‐

based fertilizer plants in Saudi Arabia. India has agreed to set up

institutes of higher education and research, provide educational

opportunities in India for Saudi students and expand cooperation

between Indiaʹs Council for Scientific and Industrial Research and the

Saudi Arabian Standards Organization (SASO). The agreement has

resulted in high power delegations from prestigious Saudi

universities visiting India. Apart from other universities like Qasim

University, a delegation of the faculties of Medicine of Saudi Arabia

visited Aligarh Muslim University in June 2011. (Qaumiawaz, 2011)

One of the leading FDI investors in India is Saudi Arabia. During

2004‐05 to 2007‐08 Saudi Arabia had US $21.55 million in FDI joint


ventures in India. Saudi Arabia is also among the major FDI investing

countries in India, it has invested 422.1 million INR during August

1991 to December 1999 and 690.71 million INR during January 2000

to August 2008. (Business Standard, 4 June 2008) Investment is

observed in diverse fields. Indian firms also have shown interest in

Saudi market. According to Saudi Investment Authority survey there

were 56 FDI projects during the year 2005 in Saudi Arabia. These

projects were in different sectors such as management and

consultancy services, construction projects, telecommunications,

information technology, pharmaceuticals, etc. Moreover, several

Indian companies have established collaborations with Saudi

companies and are working in the Kingdom in the areas of designing,

consultancy, financial services and software development.

At the India‐Saudi Arabia Business Meet in January 2006, Prime

Minister Manmohan Singh was quoted as saying “our requirements of

foreign investment are particularly large in the field of power,

telecommunications, roads, ports and housing sectors. Investment needs for

the power and telecom sectors alone are estimated at over $100 billion over

the next five years. Transportation infrastructure, including airports and

railways, will require another $55 billion over the next 10 years. I therefore

invite the business community of the Kingdom of Saudi Arabia to take

advantage of these opportunities to further establish mutually beneficial

Joint Venture projects.” (Aneja, 2008, 11) During the visit of Foreign

Minister Pranab Mukherjee to Saudi Arabia in April 2008 both the

governments agreed to establish a Saudi‐India investment fund.

Indian investors too are interested in Saudi market. To boost

business interactions both the governments decided to facilitate the

interested parties. Saudi Arabian government agreed to provide long‐

term visas to businessmen routed through the apex chambers of

commerce of the two countries. In 2009 in the 8th session of the Indo‐

Saudi Joint Commission held in Riyadh, both sides agreed to grant

long‐term multiple entry visas that would facilitate frequent business


visits from both sides and hence enhance bilateral economic and

commercial exchanges. The meeting was also significant because new

areas of cooperation were introduced for the first time i.e.

engineering, agricultural and higher education. (Embassy of India in

Saudi Arabia, 2009) Bilateral Investment Promotion and Protection

Agreement were ratified to promote the commercial activities at a

much higher level. In addition, Saudi Arabia with huge surplus savings

is keenly interested in investing in new avenues in Asian countries

and India has emerged as a lucrative designation in this regard.

Trade route security is another major Indian concern. A major

portion of Indian trade is through sea route and ensuring the safety

of sea lanes of Persian Gulf is also one of the major concerns for the

Indian government. Prince Fahd Bin Abdullah, Commander of the

Royal Saudi Naval Forces, and Foreign Minister Prince Saud al‐Faisal

came to India in February 2008 to attend a symposium on the Indian

Ocean and also participated in the defense exhibition. To reinforce

the defense cooperation with Saudi Arabia the Vice Chief of Indian

Army visited Riyadh in May 2008 and met various high ranking

Saudi military officials to enlarge the interactions and facilitate better

cooperation in the fields of training, technical assistance and military

hardware. Presently many Saudi military officers are attending

training courses in various Indian military academies. (Rasooldeen,

Arab News, 2008) Though there is no mention of defense cooperation

in the Delhi Declaration both sides agreed for high level military

exchanges, joint training of troops and joint exercises by the navy in

the Red Sea and in the Persian Gulf.

The emergence of India as a significant power in the South Asian

region could have encouraged Saudi Arabia to reinforce its “look east

policy” centered on India and China. India reciprocated by looking

west towards West Asia further fastened the bond. Besides, close

relations with Saudi Arabian Kingdom, the custodian of the Holy

sites of Mecca and Medina has unbolted a crucial and a strategic


window for India in the Islamic world and the West Asian region.

India with second largest Muslim population cannot afford to ignore

the socio‐cultural potential of West Asian region especially of Saudi

Arabia in its foreign policy. Recently Saudi government has agreed to

increase the quota of Indian pilgrims to Hajj and agreed for hiking

the facilities of pilgrims. In addition nearly 1.5 million Indians are

working in Saudi Arabia, around 85 per cent of who are in the blue‐

collar workers category. Remittances by Indian workers are estimated

to be over US $3 billion annually (Consulate General of India in

Jeddah, Accessed 2011) Indo‐Saudi Trade (in million US $)

Year (April‐ March)

Imports from

Saudi Arabia

Exports to

Saudi Arabia Total trade

2002‐2003 504.72 940.74 1445.46

2003‐2004 737.77 1123.31 1861.08

2004‐2005 1301.15 1412.06 2713.21

2005‐2006 1632.34 1809.77 3442.11

2006‐2007 13383.90 2588.18 15972.08

2007‐2008 19470.30 3711.16 23181.46

2008‐2009 19972.74 5110.38 25083.12

2009‐2010 17097.57 3907.00 21004.57

Source: Ministry of Commerce and Industry, 2010

The Saudi king’s visit to New Delhi consolidated Indo‐Saudi

Arabia relationship to new heights. New avenues of bilateral

relations were explored and Saudi investment in India grew

tremendously and started reflecting in the balance of Indo‐Saudi

trade ever since 2006. The long term multiple entry visas to Indian

businessmen encouraged not only business and trade but also reflect

the mutual trust in the relations between both the countries.


United Arab Emirates

The UAE too, like Saudi Arabia, has strong economic base in her

relationship with India. This relationship, since 3000 BC when Dubai

was the hub of Malabar trade, is cemented by various other

dimensions of political interaction. Since its formation in 1971 high

level political visits has ensured that almost every major corporate

house has a presence in UAE by way of actual investments, trade or

representative office. It is estimated that more than 3,300 Indian

companies have set up manufacturing units or opened local offices in

UAE. Some Indian educational institutions are opening full fledged

campuses in medical, engineering and management education. In

Sharjah, during the last six to seven years, about 500 Indian firms in

diverse verticals have discovered the Hamriyah Free Zone (HFZ) as

an ideal place to expand their overseas operations. UAE has emerged

as the second largest market for Indian products. India’s trade with

UAE has increased from $3256.50 million in 2000‐2001 to an

impressive to $43469.50 in 2009‐2010. The UAE market is also a major

sourcing centre for India to expand its business in Africa, Central

Asia and in the Mediterranean region. The bilateral trade has grown

tremendously as India’s exports to UAE for the period 2005‐ 2006

being $8591.79 million rose to $23, 970.40 million in 2009‐10. (Ministry

of Commerce and Industry, 2010) Simultaneously the import from

UAE also has shown consistent rise from US $4354.08 million in 2005‐

06 to US $19,499.10 million in 2009‐10.

India‐UAE Bilateral Trade (in million US $) Year Export Import Total

2005‐06 8,591.79 4,354.08 12,945.87

2006‐07 12,021.77 8,655.28 20,677.05

2007‐08 15,636.91 13,482.61 29119.70

2008‐09 24,477.48 23,791.25 48,268.73

2009‐10 23,970.40 19,499.10 43469.50



UAE is one of the strongest trading partners in the West Asian

region, representing around 70 per cent of India’s exports to Persian

Gulf countries. The booming Indian market is a great attraction for

the capital‐flush GCC based companies. The impressive returns on

investments in India and the ever increasing consumer market worth

billion dollars along with the future potential of India as an emerging

economic power and the subdued economic scenario in the West is

the main inducement for the GCC based business community to vie

for India. Budget Deficits and Surpluses (% of GDP)

Country/Year 2007 2008 2009 2010

Bahrain 3.2 10.3 ‐7.5 ‐1.2

Kuwait 29.3 21 8.5 11.7

Oman 13.5 13.3 ‐4.5 ‐1.1

Saudi Arabia 12.3 33.6 0.6 3.9

UAE 27.2 31.2 7.3 8.2

Source: Middle East Economic Digest (MEED) August 28–September

3, 2009

The ninth meeting of Indo‐UAE (JCM) Joint Commission for

Economic, Scientific and Technical Cooperation, formed in January

1975 was held in Abu Dhabi in 2007. Indian’s External Affairs

Minister Pranab Mukherjee participated in the deliberations along

with a high level business delegation. The reciprocal UAE delegation

was led by the foreign minister Sheikh Abdullah. Both sides agreed to

enhance the cooperation in Trade and Investment, Terrorism and

Illicit Activities, Education and Culture, Health, Science and

Technology, Agriculture, Energy and so on. In addition, the welfare

of the Indian workers in UAE was also discussed during the JCM.

The Federation of UAE Chambers of Commerce and Industry and the

Federation of Indian Chambers of Commerce and Industry entered in

to a joint business council agreement in 2004. The UAE’s leading

telecom services provider Etisalat launched a pilot service for money


remittance to India in June 2008. (Outlook.com, 2008) Several MoUs

were signed between India and UAE in 2006 in the field of trade,

science and technology, infrastructure and also a MoU to safeguard

the interests of the Indian workers in UAE and to ensure their

welfare. (The Siasat Daily, 2010)

UAE was the first GCC state to provide aid to India through the

Abu Dhabi Fund for Economic Development (ADFAED). (Ghosh,

2009) A large number of India’s public and private companies have

taken active part in the industrialization of UAE through contracts or

Joint Ventures. Associated Chambers of Commerce and Industry of

India (ASSOCHAM) has signed a MoU with the Sharjah Chamber of

Commerce and Industry (SCCI) to facilitate trade and joint ventures

between the two countries in 2001. (Indiaʹs Ministry of External

Affairs, 2000‐2001) Interestingly, out of the total number of 818

companies in the Sharjah Airport International Free (SAIF) zone as

much as 48 per cent of the companies are Indian entities. A total of

6154 Indian companies are registered with the Sharjah chamber,

which is 18 per cent of the total companies registered. Similarly, there

are 600 Indian companies operating in the Jebel Ali Free Zone.

(Ministry of Economy, October 24, 2007) About 60 per cent of the

companies in the Fujairah Free Trade Zone are from India.

In the defense sector, India and UAE are working closely and a

Defense Cooperation Agreement was signed in 2003 enabling mutual

supply of weapons and defense equipments. (Embassy of India in

UAE, 2003) In addition, the agreement also provides coordination in

the fields of military training, military medical services,

environmental issues and pollution caused by military particularly at

sea. A Joint Defense Cooperation Committee has been set up which

meets at regular intervals to evaluate defense cooperation. Indian

naval ships and coast guard vessels are visiting UAE regularly and

Rear Admiral Suhail Mohammad Khalifa Al‐Marar of UAE visited

India in January 2006 to discuss the maritime security. (Fatima Al


Sayegh, 2007) Moreover, UAE army personnel are getting training in

India in self financing schemes and few have enrolled for NDC

course as well. India has been participating regularly in all the

International Defense Exhibitions and Conference (IDEX) organized

by the General Cooperation of the UAE. INS Sarvekshak, a

hydrographic survey vessel of the Indian Navy docked at Abu Dhabi

port on February 21, 2009 to participate in the exhibition.

Participation from Indian side is an indication of the growing defense

co‐operation between India and UAE subsequent to the signing of the

defense co‐operation agreement between the two countries in 2003.

(Embassy of India in UAE, 2009)

The growing Indo‐UAE relation is reflected in the increased

demand for visas. As a consequence thirteen new centers were opened in

2009 to cater to this new demand. An agreement between the Indian

embassy, Abu Dhabi, the Consulate General of India, Dubai and the

Empost was reached to start centers for receiving applications for

passports and visas. The first centre at Deira Dubai was inaugurated

on 19th of February, 2009. (Embassy of India in UAE, 2009)

India, today, is the largest recipient of remittances with around 40

per cent of its total remittance coming from the Persian Gulf

countries. Indians constitute the largest expatriate work force in the

GCC countries. Total remittance to India from the UAE in 2008‐09

was around US $11 billion. (Ministry of Foreign Trade, 2010) The

estimates are that there are about 5 million Indians working in the

region. (Rajan, 2004) Migration of Indians to the UAE, which stood at

4,600 in 1975, rose to over 125,000 by 1985, and stood at nearly

200,000 in 1999. (Jain, 2003, 103‐107) The estimated population of

Indians in the UAE as of 2009 is around 1.75 million out of a total

population of six million. (Indian Express.com, 2010) A majority of

Indians in the UAE (approximately 35 per cent) are from the southern

state of Kerala, followed by migrants from Maharashtra, Gujarat and

Goa. The majority of Indians are Sunni Muslims (56 per cent),


followed by Christians (26 per cent) and Hindus (16 per cent). (Jain,

2003, 103‐107)

Out of nearly 1.75 million expatriate Indians in the UAE, 700,000

are in Dubai and around 300,000 each in the emirates of Abu Dhabi

and Sharjah. (IBNlive.com, 2007) Indian trading community has a

historic role in the socio‐economic development of UAE and the Arab

scholar Fatma Al‐Sayegh argues that the modern administration in

Dubai is the outcome of the “merchant oligarchy” and rebellion

against the rulers by the Indian traders alongside the locals in 1930s

for political reforms. (Jain, 2003, 104‐105) India is getting concerned

about the Indian expatriates especially against discriminatory policies

of the host countries. India played a vital role at the “Abu Dhabi

Dialogue” on contractual labour in 2008 to improve the well being of

contractual workers. (Menon, 2008) The timely and positive

intervention of India’s external ministry has led to the enforcement of

minimum wage for semi skilled workers especially house maids and

also written contract with the local sponsor. It is estimated that the

Indian embassy and the consulate together issue about 200,000

passport services and 63,000 visas annually. (The Economic Times,

November 5, 2007)

Although economy is vital to Indo‐UAE relations but it is not

based on oil and gas. UAE forms an important route to India’s export

to Africa, Central Asia and other destinations. The re‐orientation of

India’s West Asian policy has put on the discussion table, issues that

were long overdue and would ultimately widen the canvas of the

relationship. Ever since 2004, every bilateral meeting is opening up a

new windows of relationship be it trade, telecommunications,

infrastructure or the welfare of the workers.

Kuwait

Kuwait is one among the traditional allies of India in the West Asian

region with consistent trade and commercial relations. However

relations between the two countries were disturbed for a brief period


in the beginning of 1990s in the wake of Iraq’s invasion of Kuwait

and during the Babri Masjid demolition in India. In the wake of the

demolition of the Babri Masjid, the Kuwaiti government made sure

that no untoward incident took place on Kuwaiti territory. The

Kuwaiti government blocked a decision by a community run

supermarket to dismiss Hindu employees from India in protest

against the Babri Masjid demolition. The Kuwaiti government was

also firm against any demonstration or closure on the issue in

Kuwait. India’s ambivalent attitude during the Iraq’s occupation of

Kuwait was a low phase of India‐Kuwait relations. Kuwaiti

leadership publicly expressed anguish and surprise at India’s stand

during the Kuwaiti crisis.

However, the geo‐political and commercial compulsions along

with the mature leadership have brought back the bilateral ties into

normal fold and currently Kuwait is the second largest supplier of oil

to India. Kuwait provided about 11 million tons of crude oil and 1.25

million tons of oil products in 2005. (Azhar, 2008) India‐Kuwait trade

has been growing at a healthy pace and the exports to Kuwait

witnessed consistent growth since 2003 and it reached US $782.45 in

2009‐10, while the imports from Kuwait was US $8249.49 in the same

year. The total bilateral trade between India and Kuwait grew

spectacularly from $975.58 million in 2005‐06 to 10391.24 in 2008‐

2009. (Ministry of Commerce and Industry, 2010)

The current Indo‐Kuwait trade is also facilitated by the Kuwait

Fund for Arab Economic Development (KFAED) which provides

economic aid to India on low interest rate since its establishment in

1975‐76. The fund has successfully tried to immune its decisions from

political considerations. Kuwait has given aid to many projects in

India like the Kalindi hydro electric project, power projects I, II, Kopli

hydro electric project, Anpara thermal power projects and coal

handling and transport, Kerala fisheries development projects, Thal

Fertilizer project etc. (Chopra, 2006, 230)


India‐Kuwait Bilateral Trade (in million US $)

Year Indian exports

to Kuwait

Indian imports

from Kuwait Total Trade

2002‐03 250.56 179.50 430.06

2003‐04 319.09 142.48 461.57

2004‐05 421.44 305.94 727.38

2005‐06 513.73 461.85 975.58

2006‐07 614.81 5,993.23 6,608.04

2007‐08 681.54 7,704.25 8,385.79

2008‐09 797.50 9593.74 10,391.24

2009‐10 782.45 8,249.49 9,031.94

Source: Ministry of Commerce and Industry, 2010 Interestingly the UPA government has given utmost priority to

boost the relationship with GCC countries and several high level

visits had ensued between both the countries since 2004. India

received several high level Kuwaiti ministerial delegations which

includes the visits by Foreign Minister Sheikh Mohammed in August

2004, Minister of Communications, Ismael Khudhur Shatti, on June

28, 2006 and Engr. Falah Fahed Mohammad Al‐Hajri, Minister of

Commerce in January 2007. Correspondingly Indian Minister of State

for External Affairs E. Ahmed also led numerous delegations to

Kuwait during the same period notably, on October 2006 for

meetings with the Kuwaiti leadership, to co‐Chair the first meeting of

the Kuwait‐India Joint Ministerial Commission in November 2006

and in May 2008 on the demise of the Amir His Highness Sheikh

Saad Al‐Abdullah Al‐Salem Al‐Sabah to pay homage on behalf of the

Government of India.

The historic visit of Sheikh Sabah Al‐Ahmed Al‐Jaber Al‐Sabah,

Amir of the State of Kuwait in June 2006 gave new impetus to the

bilateral relationship between India and GCC in general and Kuwait

in particular. Both countries signed a series of agreements to enhance

the mutual cooperation. The main focus of the visit was to reinforce


trade and commerce. Three land mark agreements were also signed

during the visit: Avoidance of Double Taxation Agreement for the

Prevention of Fiscal Evasion with respect to Taxes on Income

(DTAA); an Agreement on Drug Demand Reduction and Prevention

of Illicit Trafficking in Narcotic Drugs, Psychotropic Substances and

Precursor Chemicals and Related Matters; and an Executive Program

for the Cultural and Information Exchanges between India and

Kuwait for the years 2006–2008. (Arabian Business.com, November 4,

2008) The former Indian ambassador to Kuwait M. Ganapathi noted

that “The most important encouragement in terms of economic, trade and

investment cooperation is the fact that we have an agreement for Mutual

Promotion and Reciprocal Protection of Investments (BIPA) and also a

Double Taxation Avoidance Agreement (DTAA) between India and Kuwait.

Thus, while there has been investment in marketable securities and

investment through third countries, the BIPA and DTAA should provide an

opportunity and comfort for direct investments.” (Embassy of India in

Kuwait, Accessed 2011)

The visit of the Amir has elevated the bilateral relations to much

higher levels and both nations have identified areas of cooperation in

economic, cultural, political, commercial and other areas. India has

agreed to contribute to the growth of science and technology,

information technology and biotechnology sectors, health care,

hospitality, pharmaceuticals, education, power sector in Kuwait. In

1992 during the visit of India’s External Affairs Minister Madhav

Singh Solanki to Kuwait both countries agreed to set up an “Indo‐

Kuwait Joint Ministerial Commission on Economic and Technical

Cooperation”. (Embassy of India in Kuwait, Accessed 2011) However

no efforts were made from either side to formalize the functioning of

the Joint commission. During the visit of the Kuwaiti Amir to India in

2006 both countries decided to regularize the Joint Commission for

Economic and Commercial Cooperation. The first ever meeting of

this Commission was held in Kuwait in November 2006. The Indian


delegation in the meeting was led by E. Ahamed, Minister of State for

External Affairs and Bader Meshari Al‐Homeidhi, Finance Minister

from the Kuwaiti side. The second meeting of the Indo‐Kuwait Joint

Ministerial Commission was held in July 2008, in New Delhi and JMC

decided to set up a Joint Working Group (JWG) on Hydrocarbons.

(Embassy of India in Kuwait, Accessed 2011) In April 2009 the Vice

President of India Hamid Ansari led a high level delegation to

Kuwait to strengthen the bilateral trade and commerce between the

two countries. (Jha, 2009)

According to the Indian embassy sources there were nearly 590000

Indians in 2009 that comprised of around 40‐50 per cent of Keralites

(Personal interview of Ginu Oommen with Ambassador Malhotra on

15th January 2010 in the embassy of India, Kuwait). Indian community

has a historical role in the socio‐economic development of Kuwait

especially in the areas like health, education and IT. To safeguard the

rights of expatriates a Memorandum of Understanding (MoU) on

Labour, Employment and Manpower Development was signed with

the Ministry of Labour, Kuwait in July 2006. (Pravasi Bharatiya,

August 2006)

Indo‐Kuwait relations too have witnessed spectacular change

especially since 2006. Keeping aside the bitterness on certain issues,

the mature leadership has navigated the relationship to new levels.

Imports from Kuwait drastically multiplied since 2006‐07 and so has

the Kuwaiti investment in India. The long overdue demand of both

business community to avoid double taxation was made possible

only after a new approach of ‘look west’ was undertaken in the

foreign policy orientation of India.

Oman

India‐Oman relations date back to Indus Valley Civilization and

Oman ports were the main centers of trade between Gujarat and

Malabar coasts during the medieval times. In 1786 Tipu Sultan the


ruler of Mysore had send a high level diplomatic delegation to Oman.

(Rahman, 2009) Post‐Independence an Indian consulate was opened

in Muscat in February 1955 and five years later it was upgraded to a

Consulate General and finally became a full fledged Embassy in 1971.

The present Indo‐Oman relation draws its strength from the

traditional relations between both the countries. Sultan Taimur, the

grandfather of the current ruler had spent more than 30 years in

Mumbai, India, till his death in 1965 and he was buried there.

(Rahman, 2009) In the early days, the Indian community in Oman

consisted of traders and financiers from Gujarat (Kutch) and Sindh,

including the Khojas and the Hindu business community. The oldest

Indian family traces its history in Oman over eight generations.

Today, it is estimated that there are around 500,000 Indians in Oman,

constituting the largest expatriate community in the country. A

number of Persons of Indian Origin (PIOs) have been granted Omani

nationality, some of them being the recipients of high awards of the

Omani government.

India‐Oman economic and commercial relations have gained

sufficient momentum in the recent past and the trade has registered

the highest growth rate of 66 per cent and amounted to $1.5 billion in

2007 a rise from $900 million in 2006. (Valsan, 2006) India is keen to

enhance the strategic partnership and to upgrade trade and

investment in diverse areas, including, oil and gas, heavy

engineering, chemicals and pharmaceuticals, IT, infrastructure,

hydrocarbons, and petrochemicals. In 2002‐2003, Indian exports to

Oman were of the value of $198.61 million. The value of imports from

Oman was $13.84 million. (Aneja, 2003) Prime Minister Manmohan

Singh during his visit to Oman in November 2008 called upon

‘captains of Oman’s industry and financial companies’ to invest

surplus liquidity into key infrastructure sectors in India. He assured

them of a hospitable climate for investment. He underlined that ʺin

this period of turmoil, I feel that the complementarities between our two


economies provide an opportunity for counter‐cyclical strategies for growth

in both the countries.ʺ (Hussain, 2008)

The growing relationship is also reflected in several joint projects

undertaken by the two countries. Since 2000, India has experienced a

favorable trade position with Oman and bilateral trade is no longer

confined to oil and gas. India ranks as the third largest source for

imports into Oman. Major items of Indian exports include textiles

and garments, machinery and equipment, electrical and electronic

items, chemicals, iron and steel products in addition to traditional

items like foodstuff, tea, coffee, spices, rice and meat products, fruits

and vegetables, and seafood. In 2003, India and Oman had set up a

joint fertilizer company worth $969 million at Qalat near Sur. Two

Indian firms, Indian Farmers Fertiliser Cooperative (IFFCO) and

Krishak Bharati Cooperative (KRIBHCO) have a 25 per cent stake

each while the Oman Oil Company has a 50 per cent share in this

joint venture ‐ Oman‐India Fertilizer Company (OMIFCO). The

fertilizer unit is expected to produce 1.65 million tones of granulated

urea and 250,000 tones of surplus ammonia annually to meet India’s

growing fertilizer demand. (Vaidya, 2008) India will buy back the

entire production of urea/ammonia for a ten year period. This project

made India emerge as the largest destination of direct Omani exports

and the non‐oil bilateral trade has shown an impressive growth and

is poised to cross $2 billion. (Valsan, 2004) The bilateral trade between

India and Oman has shown a tremendous leap from $288.28 million

in 2004‐2005 to $4532.82 million in 2009‐10. (Ministry of Commerce

and Industry, 2010)

In December 2006 India signed a strategic Memorandum of

Understanding on Defense Cooperation with Oman that included

exchange of expertise in military training and information

technology, utilization of military and educational courses and

programs, exchange of observers attending military exercises and

exchange of formal visits. (Lefebvre, 2011)


Minister of State for External Affairs, E. Ahmed, visited Oman in

November 2004 followed by the visit of External Affairs Minister K.

Natwar Singh in December 2004. The visit also saw the signing of an

Extradition Treaty, and the signing of a MoU between the State Audit

Institution of the Sultanate of Oman and the Comptroller and

Auditor General of India, for cooperation in audit matters. India has

helped Oman in setting up the Information System Audit Function in

Oman’s Audit department on the pattern of Indian CAG’s office.

Several Indian ministers made official visits to Oman in short

intervals keeping the relationship warm including Kamal Nath,

Minister for Commerce and Industry in 2006, Vayalar Ravi, Minister

of Overseas Indian affairs in March 2007 and Minister of Defence

Pranab Mukherjee in March 2008.

The traditional Indo‐Oman relations have gained sudden

momentum and have registered the highest growth rate of 66 per

cent in 2007. The trade has diversified and the leadership has

recognized the complementary nature of the two economies as stated

by the Indian Prime Minister in 2008. Ever since 2004 new areas of

investments have been identified, joint projects undertaken and

several MoUs signed. Long term understandings have been reached

in certain sectors like supply of fertilizers. The ‘look west’ policy has

activated the political and diplomatic interaction which is responsible

for creating a conducive environment for the overall growth of

bilateral trade and commerce.

Qatar

India’s relations with Qatar dates back to 200 years and its credit goes

primarily to the Indian trading communities (Thattai Bhatias and

Kutchi Bhatias and Luwatias) who traded in Oman and were also

active in Qatar. (Jain, 2007) In the past Mumbai was the main trading

centre of Qatar and Indian rupee were in use in Qatar until 1960s.

Currently India’s relationship with Qatar has grown significantly.


Qatar is the third largest investor of gas reserves and close ties with

Qatar is equally important for India. The bilateral trade constitutes

only a part of the potential for economic cooperation between India

and Qatar. India’s export basket to Qatar is fairly diversified and

includes consumer items, foodstuff and industrial equipments,

readymade garments, jewellery, light engineering goods, steel pipes

and consumer electronics, marble, gold and precious metals, bus

tyres, beauty products, textiles and ceramics. The hydrocarbons

sector has been a prime focus of India and India imports large

volumes of ethylene, propylene, ammonia, urea and polyethylene

from Qatar. During 2002, major items of import from Qatar were

sulphur, mineral fuels, petroleum products, inorganic chemicals, urea

and fertilizers. Moreover Liquefied Natural Gas (LNG) imports

comprise a main concern for India’s bilateral economic relations with

Qatar. Both countries had signed a MoU in January 1998 for further

cooperation in the gas, oil and industrial sectors. The MoU envisage

for the supply of 7.5 million metric tons of liquefied natural gas

(LNG) per year for 25 years by Qatar to India. (Khaleej Times, 2005)

Bilateral trade between India and Qatar stood at $5185.86 million

in 2009‐2010. Today, Qatar is the largest LNG supplier to India, and

during Prime Minister Manmohan Singh’s November 2008 visit,

India expressed its wish to source an extra 2.5 million tones of LNG

from this Persian Gulf state. (Hussain, 2008) The imports from Qatar

have systematically increased over a period of time from $91.69

million in 2001‐02 to $4648.89 million in 2009‐2010.

India‐Qatar bilateral Trade (in million US $)

India’s Imports

from Qatari

India exports to

Qatar Total

2001‐02 91.69 49.00 140.69

2002‐03 113.07 96.10 209.17

2003‐04 187.05 128.44 315.49 2004‐05 672.85 209.42 882.27


2005‐06 901.62 259.34 1160.96

2006‐07 2060.08 331.53 2391.61

2007‐08 2455.75 538.73 2994.48

2008‐09 3498.91 674.37 4173.28

2009‐10 4648.89 536.97 1005.86


A key agreement arrived at during the Indian Prime Minister’s

visit to Qatar in 2008 was on defense and security. (Dikshit, 2008) The

agreement covers maritime security, piracy, intelligence sharing on

terrorism, money laundering, narcotics and transnational crimes.

India and Qatar have signed landmark defense and security

agreements paving the way for joint maritime security, sharing of

intelligence on threats posed by terrorism and cooperation in tackling

trans‐national crimes. The defense agreement lays out a structure for

joint maritime security and training as well as exchange of visits. This

agreement assigns India a unique position in the region. It allows the

Indian Navy to operate in the region and ensure the security of the

sea lanes through which 15 per cent of the world’s super tankers pass.

During Manmohan Singh’s visit, Indian Petroleum Minister

Murali Deora requested the Qatari Deputy Prime Minister, Abdullah

Bin Hamad Al‐Attiyah, to supply an additional 2.5 million tones of

LNG under an agreement that was signed a decade earlier. (Hussain,

2008) India also expressed the wish to set up a gas‐fired fertilizer

plant in Qatar to meet its urea needs. Currently, Qatar supplies 25 per

cent of the total fertilizer consumed in India. Qatar, being a small

country with limited human capital, needs an emerging big economy

and market, like India, for its gas. At the same time, India is also keen

to take advantage of a reliable source of natural gas situated close to

its own consuming centers. In 1999‐2000 the trade turnover between

both the countries was $245 million which reached US $1005.86 in

2009‐10.


In 2008 there were nearly 300,000 Indian immigrants in Qatar.

(Indiaʹs Ministry of Overseas Indian Affairs, 2011) Keeping in view

the large number of Indian expatriates, India and Qatar signed an

additional agreement on 20th of November 2007 on manpower

development that will open further employment opportunities for

Indian expatriates. (Ministry of Overseas Indian Affairs, 2011) The

Protocol also provides for the welfare of Indian workers in the

unorganized sector. The MoU stipulates that the terms and

conditions of employment shall be defined by a contract between the

employee and employer and authenticated by Qatar’s Ministry of

Manpower. The accord seeks to protect the interests of Indian

expatriate workers in the Sultanate, especially housemaids and

household employees.

Bahrain India shares deep and historical interactions with Bahrain too since

ancient times. In the past the pearl industry played a big role in

cementing India’s relations with Bahrain. The pearls produced in the

Persian Gulf coast were pierced, polished, and converted into

jewellery in Mumbai. (Embassy of India in Bahrain, Accessed 2011)

India continues to maintain good relations with Bahrain since its

Independence in 1971, with high‐level visits and joint agreements.

Many of Bahrain’s most prominent figures had close connections

with India. The eminent Bahraini poet and constitutionalist Ebrahim

Al‐Arrayedh grew up in Bombay. (UNESCO, 2009) Political

leadership has sought to enhance these long standing ties, with

reciprocal visits and economic cooperation.

India and Bahrain signed the first economic and technical

cooperation agreement in April 1981. Bahrain is very keen to explore

India’s expertise in IT and in May 2001 the Electronics and Computer

Software Export Promotion Council (ESC) of India signed a

memorandum of understanding (MoU) with Bahrain’s Economic


Development Board (EDB) ‐ the nodal agency for development of the

IT sector in the country. The Fourth Meeting of the India‐Bahrain

Joint Committee on Economic and Technical Cooperation (JCETC)

was held in Bahrain on 14‐15 November, 2007. (Indiaʹs Ministry of

External Affairs, 2008) Many Indian companies have deep business

ventures in Bahrain which includes Titan watches, Onida televisions,

Videocon, BPL, Godrej, Raymonds, and VIP etc. Bahrain’s main

imports from India include machinery, electrical and electronic

equipment, textiles, beverages and food products, base metals,

chemicals and chemical products, plastic, rubber, ceramic products,

cement and mineral products.

India and Bahrain signed an extradition treaty in 2004 during the

visit of the Prime Minister of Bahrain Shaikh Khalifa bin Salman Al

Khalifa to India. The treaty that deals with concrete steps to combat

terrorism and strengthens bilateral cooperation in control of crime.

(Indiaʹs Ministry of External Affairs, 2007) Bahrain is the second

Persian Gulf country after UAE with which India has signed the

extradition treaty. Bahrain’s Crown Prince Shaikh Salman bin Hamad

Al Khalifa visited India in March 2007 and reaffirmed his

commitment to fight terrorism. Another agreement for Cultural

Cooperation (2007‐2010) and a Memorandum of Cooperation

between Prasar Bharati and Bahrain Radio and TV Corporation were

also signed. (Consulate General of Bahrain in Mumbai, Accessed on

June 9, 2010) To strengthen mutual trade and commerce, Indian

businessmen would be given visa on arrival to Bahrain for a period of

two weeks in the first phase. (Embassy of India in Bahrain, Accessed

2011) Moreover Khalifa Al Dhahrani, speaker of Bahraini parliament

led a delegation of parliamentarians and business leaders in 2007. The

volume of bilateral trade between India and Bahrain is relatively less

when compared to other GCC countries. In the year 2009‐10 the

bilateral trade was mere US $753.07 million. (Ministry of Commerce

and Industry, 2010)


Summary

India–GCC relations have come a long way and has diversified to

accommodate new areas. The ‘look West’ Policy of India had made

tremendous impact in the India‐GCC relations. It is quite evident

from the data that in the field of bilateral trade there was substantial

growth especially since 2004. New vistas have opened up the current

trend of diversification and bold steps to promote deep cooperation

in the field of trade and commerce. There still remain many other

areas that need to be explored. Agriculture for example is an area

where the needs of India and GCC are reciprocal. India with

considerable agricultural land needs investment to make it more

productive and remunerative. The bilateral trade between India and

the GCC countries has shown a tremendous growth since 2003‐04.

The export‐import statistic shows that since 2005 India’s imports

from GCC countries have been exceedingly greater than the exports.

The GCC investors have started focusing on India as an investment

destination. Strong economic growth on the back of service sector

contribution has helped sustained economic growth. Government’s

thrust toward infrastructure development via public‐private

partnership is further bolstering investment.

The UPA government’s ‘look west’ Policy has given extra attention

to consolidate, enhance and diversify the economic cooperation

between India and the Arab region. Several confidence building

measures and several measures to facilitate and boost the relationship

were taken at the policy level and implemented on the ground.

However, the world economic crisis and the subsequent fluctuation

in the world economy have had its impact on the India‐GCC bilateral

trade as well. India’s five‐million‐strong workforce in the GCC and

their contributions in the socio‐economic developments of the region

have created a congenial atmosphere for people to people

relationship that can lay a strong base for the much require strong

political relationship. Steps to safeguard the interest and rights of this


community have also been taken up at several levels. This can further

be strengthened by setting up cultural centers, exchange of

academics, media persons and intellectuals.

The ‘look west’ policy orientation led to significant mobility at the

political and diplomatic levels. Several high‐level delegations from

India visited each of the GCC countries and were reciprocated in

equal terms from the other side. The political will was readily

capitalized by the business communities that went full‐on into direct

investments, joint ventures and into new arena.

Both India and GCC states are prepared to reorient their policies

and engage politically and strategically in a more rigorous manner. In

the changing geo‐political context the GCC countries too have

softened their stand on the diplomatic irritants like the issue of

Kashmir. The new positive trends in the India‐GCC relations are the

manifestation of the altering perceptions of the political elites of the

Persian Gulf towards India who are seeing it more favorably.

Despite the complex situation, as the two regional powers of West

Asia – Saudi Arabia and Iran have undercurrent competitions, India

has reciprocated maturely. India needs to play a more active but

cautious role regionally and globally to emerge and portray as a

trustworthy partner in international politics. India has managed to

gather the support of two Persian Gulf countries—United Arab

Emirates (UAE) and Oman—in its bid for permanent membership of

the extended UN Security Council. Saudi Arabia has also agreed to

support India’s candidature for a non‐permanent seat of the UN

Security Council and has sought India’s support for its own

candidature for the year 2014/15. By strengthening cordial

relationship with the GCC, India will once again consolidate its

presence in the West Asian region and reinforce confidence in the

Muslim world.


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Documents

India Look West Policy and Its Impact on Indian GCC Relations