New Delhi: From inking trans-continent infra projects to mega energy deals and closer security and defence cooperation than ever before, the Narendra Modi government and the Arab world have deepened their relationship since 2014.
The most recent developments which throw a spotlight on this relationship is Modi’s visit to UAE, the seventh since 2014, during which he inaugurated the first Hindu temple there, and the one to Qatar last week after India managed to bring back seven of the eight naval veterans who had previously been sentenced to death on espionage charges.
While some experts would attribute it to Modi’s capability to strike one-on-one relationships with global leaders, others would argue that India’s ability to make geostrategic and economic inroads in the Arab world has converged with reforms, economic diversification and an energy transition in the Middle East and Gulf region over the past decade.
As early as in 1986, during a global oil glut, Gulf Cooperation Council (GCC) countries identified economic diversification as a major strategic goal, with a view that they must anticipate the depletion of their critical resource in the future.
Over the past decade, Saudi Arabia launched “Vision 2030”, which seeks to reduce the Kingdom’s reliance on oil production, with a promise to transform state-owned oil giant, Aramco, into a “global industrial conglomerate”.
Bahrain, meanwhile, has emerged as a regional hub for Islamic banking and the UAE has diversified into tourism.
Large, fast-growing economies like India have entered the picture as the region — home to some of the world’s largest sovereign wealth funds — seeks to make strategic investments in non-oil sectors, such as renewable energy, artificial intelligence (AI) and digital transformation.
India and Saudi Arabia are among the few large economies in the world showing “robust growth”, noted a joint statement from the two sides issued during the Crown Prince’s visit to India last September, which came at a time when many Western markets were showing recessionary trends.
India’s growing engagement with the region in the past decade has been termed by political analysts as a “historic” change marked by pragmatism and realpolitik.
Modi’s personal connections with rulers have also been viewed as part of the change, after an era of anxieties in New Delhi over the region’s “propensity to take sides” with their “Islamic brother” (Pakistan), as pointed out by former diplomat Anil Trigunayat in a 2019 lecture to IIT Guwahati.
“Pre-2014, India was diffident and risk-averse with its West Asia policy. We’ve gone from a defensive crouch to more pragmatic engagement with the region,” C. Raja Mohan, former director of the Institute of South Asian Studies, National University of Singapore, told ThePrint.
“The Gulf and Middle East were always ready to do business and invest in India. Now, we’ve changed our lens,” he added, when asked if the hyphenation with Pakistan has finally been put to rest.
During his visit to the UAE last week, Modi signed a slew of deals with Sheikh Mohamed bin Zayed Al Nahyan on business, migration and security, including a framework agreement for the India-Middle East-Europe Economic Corridor (IMEC) (even though technical questions continue to loom over the mega infrastructure project).
Modi’s visit to Qatar was also seen as a major win, especially as it came after detained Indian Navy veterans in the Gulf country were released due to the Prime Minister’s “personal” supervision of the case. Notably, Doha and New Delhi had also inked a 20-year deal for the supply of liquified natural gas (LNG) costing $78 billion a week before Modi’s visit.
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The churn in the Middle East
India’s successful outreach to West Asia has also come at a time when the region itself is experiencing changes. These nations, with some of the largest sovereign wealth funds in the world, are now looking towards large, rapidly growing markets like India where they can make long-term investments and rely less on petrodollar diplomacy.
“India’s aim is to get as much FDI (foreign direct investment) from this region as possible, where there are fewer terms and conditions on investments, unlike when dealing with Western countries. Meanwhile, Middle East and Gulf countries are undergoing an economic transition themselves and are keen to invest in countries which will provide the best returns. They are willing to bet on a country like India growing at 7 percent,” Kabir Taneja, Fellow at Observer Research Foundation (ORF), told ThePrint.
A country like India, with a large market and an over eight million-strong diaspora across mainly Saudi Arabia, UAE, Qatar and Kuwait, makes for an attractive partner.
Major sovereign wealth funds — Public Investment Fund of Saudi Arabia, Abu Dhabi’s Mubadala Investment Co. and Qatar Investment Authority — have ramped up investment in India in recent years.
The UAE, India’s third-largest trading partner, pledged to invest $75 billion in Indian infrastructure, following Modi’s visit to the country in 2021.
This was catapulted when the two countries signed a free-trade-agreement in February 2022, negotiated in a short period of eight months.
Dubai’s DP World, a multinational logistics company, has since pledged a slew of investments in Jammu and Kashmir, just five years after the Modi government scrapped the special status there.
Further, Saudi Arabia has committed $100 billion in investments to India, and hinted towards setting up a sovereign wealth fund office in Modi’s home state, Gujarat, to facilitate investments.
However, experts like Taneja say that there could be risks with India being a part of the US-led security architecture in the region, such as IMEC and I2U2, especially as the Israel-Hamas war and the Red Sea crisis have shaken some of Washington’s plans.
For one, Saudi Arabia and Israel were in the US-mediated talks for normalisation of ties before Hamas’ 7 October attacks last year. A statement from Riyadh on 7 February, however, indicates that an independent Palestinian state is now a necessary contingent.
Saudi Arabia’s message of restraint to Washington last December amid the Red Sea crisis also came as a surprise to many since it was Riyadh that has been fighting the Iranian-backed Houthi rebels in Yemen since September 2014.
“That messaging was surprising but it could have been to appease the Arab street. There’s no doubt that there was a slow drift in the Arab world, perhaps after the Abraham Accords, towards recognising Israel but the Gaza war put a violent halt to that,” Bashir Ali Abbas. research associate, Council For Strategic and Defense Research (CSDR), told ThePrint.
Though India is part of IMEC and I2U2, it has stayed away from the US naval coalition in the Red Sea against the Houthis, despite an invitation from Washington.
“New Delhi knows that the coalition has political colouring and has stayed away from it. Arab states, too. As seen, India would rather have its Navy operate in those waters independently, addressing distress calls when need be,” Abbas added.
Challenges along the way
In 2022, India received sharp pushback from the Arab world after the now-suspended Bharatiya Janata Party (BJP) spokesperson Nupur Sharma made disparaging remarks about Prophet Muhammad. Saudi Arabia, the UAE, the Gulf Cooperation Council (GCC) and other regional players criticised India, while New Delhi went into “damage control”.
However, today, relations with Egypt, Saudi Arabia, UAE and Oman have grown by leveraging historical ties, energy interests and diaspora linkages.
During the previous United Progressive Alliance (UPA) government, then prime minister Manmohan Singh visited the Middle East four times, while Modi travelled to the region roughly 15 times since 2014 and even kicked off his 2022 foreign visit calendar with trips to the UAE and Kuwait.
National Security Advisor (NSA) Ajit Doval has also frequented the region, most recently attending a high-level meeting in May in Riyadh with NSAs from UAE, the US and Saudi Arabia.
Modi’s personal relationship with rulers has also won him the highest civilian honours from certain countries, such as the UAE (2019) and Saudi Arabia (2016).
Despite halting oil imports from Iran since 2019, India’s relations with the sanctioned country have continued to progress. For example, both sides are still actively working on a long-term contract for Chabahar Port.
Tehran is also key to India’s policy on Afghanistan, given the Taliban share historical ties with the Iranian leadership.
Some experts say that, in the case of the UAE, India’s alleged role in returning Princess Latifa — daughter of the ruler of Dubai and prime minister of the UAE Sheikh Mohammad bin Rashid al Maktoum, who was forcibly taken off a boat off the coast of Goa allegedly by Indian marine commandos in 2018 — to the country opened a door.
“It was definitely a show of intent towards the bilateral ties. In the Arab world, you cultivate leader-to-leader relations, and this kind of commitment helps. These incidents need to be seen as a play of naked self-interest of states,” ORF’s Taneja told ThePrint.
(Edited by Richa Mishra)
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This deepening of relationship between India and the Arab world is really a great achievement of Modi. It was really strange why the earlier govts were always looking at the Arab world through the eyes of Pakistan. This deepening of relationship between India and the Arab world is so much mutually beneficial to all parties. The people to people contact are so deep already. The only thing needed was at diplomatic level.