Why India rejoiced as Gulf states made peace

Gulf reconciliation provides New Delhi a wider horizon of opportunities for trade, commerce and security cooperation in a post-pandemic world.

When the Arab Quartet of Saudi Arabia, the UAE, Bahrain and Egypt announced on June 5, 2017 that they had decided to break diplomatic, trade and travel links with Qatar, it was a dramatic escalation with repercussions that went far beyond the confines of the Arabian Gulf.

Cut to January 2021 – and that diplomatic stand-off came to an end at the Al Ula Summit in Saudi Arabia, where Gulf Arab leaders signed a declaration to mark a new page in relations following their decision to end the embargo of Qatar.

One of the first reactions to the positive development in the new year was from India – which successfully managed to nurture close relations with the UAE and Saudi Arabia while growing its commercial and trade links with Qatar in the intervening years.

New Delhi not only welcomed the reconciliation and rapprochement among the Gulf states, but also hoped that such encouraging developments will further promote peace, progress and stability in the region and among Gulf Cooperation Council (GCC) members.

“We were pleased to note the positive developments at the recently concluded GCC Summit in Al-Ula, Kingdom of Saudi Arabia. We welcome the reconciliation and rapprochement between countries in the region. India shares excellent relationships with all the countries in the GCC which is in our extended neighbourhood and we hope that such encouraging developments will further promote peace, progress and stability in the region,” said Ministry of External Affairs spokesperson Anurag Srivastava. India will continue to work with GCC countries for the strengthening of bilateral cooperation, he said.

Tactical rethink

On part of the Gulf states – and especially Saudi Arabia – the end of the embargo signifies a strategic and tactical rethink against the backdrop of a new US presidency and the looming spectre of a renegotiated Iran nuclear deal. By lifting the air and sea blockades, the Saudis and the Emiratis seek to deny Iran of funds that had been flowing along the Tehran-Ankara-Doha axis, and also put up a united Arab regional front as Joe Biden settles down at the White House.

But for India, the ramifications of the Gulf reconciliation are indeed high and full of opportunities in the post-pandemic era.

In the years since Indian Prime Minister Narendra Modi assumed office in 2014, he has taken Delhi’s relations with the Gulf to an unprecedented era. Thus, India-Gulf ties today are as much about their people as the trade: an eight million-strong diaspora leans on over a half a century of commerce, labour and culture that lobbied the Indian and Gulf governments to pursue a strategic agenda. The Modi government further institutionalised these partnerships through strategic dialogues that bring together political, military and economic stakeholders with greater frequency.

“Sustained India-Gulf engagement builds habits of cooperation and sheds light on each other’s strategic concerns and capabilities… In this climate, what India can do is focus on fast-tracking existing projects such as the much delayed mega-refinery in Maharashtra and re-engage with purpose in strategic sectors like healthcare, nuclear and space cooperation. The intent here is to not play catch-up with China but focus on India’s strengths and deliver on what is already promised,” said Sumitha Narayanan Kutty, an associate research fellow at the S Rajaratnam School of International Studies (RSIS) in Singapore, where she tracks India’s foreign and security policies across the Indo–Pacific with a special interest in the Middle East. The new momentum in ties must be seen against the framework of cooperation where New Delhi “actively supports” the ambitions of the Gulf states in the IOR through the Indian Ocean Naval Symposium (IONS) and Indian Ocean Rim Association (IORA), she observed. For instance, the UAE — a very active player in the Indo–Pacific — currently chairs IORA.

Strategic momentum

The stability arising out of the united front posed by the GCC following the Al Ula Summit has also provided India a new plank for strategic momentum.

“Delhi’s increased political and economic interest in rising to the top of the global hierarchy has increased the strategic dimension of its dependence on Gulf energy. India is already increasingly energy-thirsty, and in 2016 over half of India’s oil and gas imports came from GCC countries,” said Kadira Pethiyagoda in a policy paper for Brookings Institution.

“India’s expanding regional aspirations across the Indian Ocean are also a factor. Delhi sees the Gulf and South Asia as strategically interactive and interrelated regions and has increased its focus on the Gulf accordingly. The increase in India’s global trade gives new impetus for cooperation with the strategically located GCC states. Furthermore, India’s historical ties to the region motivate present-day leaders to strengthen current ones,” he said.

The good tidings from the Gulf therefore have brought a range of strategic opportunities for India – further boosted by the recent normalization of relations between key Gulf states and Israel, the postponed Dubai Expo scheduled in October this year, and the FIFA World Cup scheduled in Qatar next year.

Boost for Gulf NRIs

The removal of trade and travel restrictions spells more commercial opportunities for Indian businesses based in the Gulf and an overall positive sentiment for the bilateral investment climate.

“As the GCC states step up their vaccination drives and start to come out of the shadow of Covid-19, India would hope that the economic recovery facilitates the return of Indian expatriates to the Gulf. The resumption of normal trade ties would also help several major Indian and NRI-owned business groups which had seen their markets shrink as a result of the embargo,” said Navdeep Suri, former Indian Ambassador to the UAE. “Ashok Leyland has a bus assembly facility in the UAE but had to lose out on export orders to Qatar. Dabur found itself in a similar situation since its ‘Made in UAE’ products could no longer be sold in Doha. The travel restrictions also made it difficult for many Dubai-based NRI-owned businesses to service their clients in Doha, with Muscat emerging as an alternative meeting point,” he wrote in a column for Tribune.

The strategic depth of India’s multilateral construct with the Gulf has grown by leaps and bounds in the past six years, and also brought in its ambit other nuclear powers such as France – pivoting around the Indo-Pacific narratives. So much so that the next batch of three Indian Rafale jets, being delivered to India from France, will be refueled mid-air by the United Arab Emirates (UAE) Air Force, adding another feather to fledgling relations between not just Abu Dhabi and New Delhi but also the entire Gulf region and India in general.

This heady mix of pragmatism, geopolitical tactic and historic relations are now all set to get a massive commercial boost for India, thanks to a reunited Gulf.