Introduction:

The Gulf region is perhaps the most important region for India, even though the fact is less commonly recognised (Kumarswamy, 2014), as it occupies a pivotal place in India‘s political, economic, cultural, religious and strategic interests and policies. About 6.5 million Indians living in the region remit a huge amount of money to India. The amount of remittance coming from abroad was estimated to be the US $ 71 billion and around fifty per cent of the remittance is from the Gulf region. The Gulf region has always been significant to India because of geo-strategic location, availability of energy resources, home for the Indian diaspora. India‘s trade and economic ties with the region which are around the US $ 160 billion are growing. About 60 per cent of oil is imported from this region. India has a definite interest in the balanced and peaceful strategic environment in the Gulf countries which are the source of two-thirds of India‘s crude oil requirements and form the largest trading regional block for India, accounting for 23.7 per cent of Indian trade

Relations in retrospect

Indo-Gulf relations remained primarily commercial without strategic dimension despite the region being India‘s largest trading partner, supplier of about two thirds of oil and gas imports and home to 8.5 million strong Indian diaspora. India‘s failure to build upon the growing trade relations with Gulf region can be attributed to: First, trade relations continued to remain mercantile devoid of larger strategic vision. Two, decisions in the Gulf countries take place at the highest level, often by the ruler. Sending members of Ministry of External Affairs suffers from hierarchical deficiencies. In eyes of Arabs, low level Indian delegates lack necessary mandate to make sensitive decisions (Kumarswamy, 2014).

Reorientation of India – Gulf region Foreign Policy

A reorientation of Indian foreign policy in Gulf region is seen since Mr. Narendra Modi became Prime Minister, as the region has been receiving considerable political, diplomatic, strategic, economic attention and a new focus towards the Gulf region was brought about by Mr. Modi‘s active role and engagement with overseas Indian community in the Gulf (Kumarswamy, 2018).

Gulf Cooperation Council (GCC)

The Gulf Cooperation Council (GCC) is a consortium of six oil-exporting countries, created in 1981 to foster economic, scientific and business cooperation. These countries are among the wealthiest countries in the world and consist of the following:

1. The Kingdom of Bahrain – Its 1.2 million people enjoy a GDP per capita of $50,700. Its economy grew by 3.0 per cent in 2016.

2. Kuwait – Its 2.8 million residents enjoy the 11th highest standard of living in the world ($71,900 per person). The country holds 6 per cent of the world‘s oil reserves.

3. The Sultanate of Oman – With dwindling oil reserves it must rely on tourism more to improve the lifestyle of its 3.4 million residents. Its GDP per capita is $46,100.

4. Qatar – The second richest country in the world, with a GDP per capita of $125,100 for each of its 2.3 million residents. It has 25 billion barrels of proven oil reserves and 13% of the world‘s natural gas reserves.

5. The Kingdom of Saudi Arabia – The largest of the GCC countries (28.5 million people) has 16 per cent of the world‘s proven oil reserves. Its GDP per capita is $55,300.

6. The United Arab Emirates (U.A.E.) – Its 6 million people enjoy a per capita GDP of $68,100. Abu Dhabi has proven oil reserves of 92 billion barrels (Amadeo, 2017).

Aware of impending problems of relying on finite resources such as oil, the GCC countries embarked on massive diversification and investment programmes to reduce their dependence on those resources for income (Sultan, 2012). During the last decade, the GCC countries embarked on massive infrastructural programmes aimed at diversifying their economies and creating job opportunities for their citizens, spending hundreds of billions of petrodollars on building new cities; accumulating massive financial reserves (known as Sovereign Wealth Funds or SWFs) and using them to invest internationally through buying commercial outlets and shareholdings in major foreign businesses (Sultan, 2012). U.A.E. wants to become the world‘s new tourist attraction. Qatar hopes to become destination for world events and conferences. Saudi Arabia is trying to become the region‘s economic powerhouse. Some GCC countries like U.A.E. have invested in renewable and potential future energy fuels such as solar and nuclear (Sultan, 2012). Kawach (2009) believes that GCC countries could spend about US $ 200 billion on such projects in next two decades. Unlike previous years when economic growth was driven mainly by government spending, the private sector is expected to play an important role in future development in GCC countries. The non oil growth in the GCC countries has been driven by the newly emerging private sector. In Dubai, for example, non oil sector in mid1990s were already contributing 82 % of the emirates GDP and in 2006, the figure may have been 95 % (Davidson, 2008). Partnerships between private and public sectors became more widespread. Projects in infrastructure and utilities are carefully selected and implemented according to a predetermined framework and are linked to macro indicators (Saif, 2009).

The 36th annual GCC summit took place in Riyadh on 9th December 2015 which saw a broad consensus on a variety of political, social, and economic issues such as combating extremism, security cooperation, economic integration, support for a political solution to crises in Yemen and Syria, and firm support for the Palestinian cause (Gulf News, 2015). The 37th annual GCC summit was held in Manama, Bahrain on 7th December 2016 (Arab News, 2016). The promotion of GCC unity and economic integration among the GCC member states was one of the important points of discussion. Their prime focus was on stopping terror-financing (Khatana, 2018).

Challenging Gulf Scenario

The changing dynamics of domestic and regional politics in the Middle East ensured continued turbulence during 2015 and 2016. The GCC monarchies remained embroiled in firefighting issues, ranging from economic troubles due to lower oil prices, Saudi-led military intervention in Yemen, the ISIS threat, and growing Iranian regional influence (Khatana, 2018). The 2011 ‗Arab Spring‘ had been a fundamental change for many Arab countries, but with the exception of Bahrain and Oman, the GCC countries in general seem to have been an oasis of relative calm compared with to the rest of the Middle East region (Ramady, 2012). This belies the fact that underneath the calm there are fundamental forces of change also taking place in all GCC countries, affecting the blocs‘ economic, social and political destiny (Ramady, 2012). Regional upheavals have brought about internal tensions among the GCC member-states. The Qatari support for Egyptian Islamists angered al-Saud and contributed to a temporary breach of diplomatic relations in 2014 when Saudi Arabia, Bahrain and the U.A.E. withdrew their Ambassadors from Qatar (Kirkpatrick, 2014). While Oman did not join hands with this Saudi-led move, Kuwait sought to mediate. Even though the three ambassadors returned to Qatar in December 2014, tensions continued. The Saudi-led military offensive against Yemen, Operation Decisive Storm (March–April 2014) and Operation Restoring Hope (April 2015– present) highlighted differences within the GCC. Saudi Arabia blamed Iran for Yemeni crisis. Oman maintained its neutrality, partly due to its traditional policy of regional autonomy and partly due to closer ties with Iran. Other GCC countries joined Saudi-led military offensive that was launched. The popular protests which began in Tunisia in December 2010, continue to dominate the regional political landscape. However, with the exception of Yemen, the Arab states along the Persian Gulf have largely weathered the Arab Spring and its adverse effects. The Gulf monarchs settled for popular co-option through financial largesse to blunt the demands for political reforms (Kumarswamy, 2018). The oil prices—which had reached US$ 60 per barrel in December 2014—continued to fall, and dropped to US$ 50 per barrel in December 2016 primarily due to slow growth of the global economy and energy alternatives.

Falling oil prices also affected the oil-rich Gulf Arab countries which faced huge budget deficits. All GCC countries were forced to introduce a small portion of taxes to meet budgetary deficits. Saudi Arabia imposed limits on overseas remittances by its expatriate workers (Flanagan, 2011). Bahrain reduced subsidies on key issues such as water, electricity and fuel (Naar, 2016). Saudi Arabia and Kuwait were forced to dip into their sovereign wealth to bridge current account deficits (Townsend, 2016). According to Al-Rasheed (2017) economic prosperity, the enabling back bone of Gulf political ambitions, is now stumbling under the pressure of drastic decline in oil prices. In anticipation of the damage, many GCC countries already adopted economic and social visions for reform; Saudi Arabia was the last country to join the visionary trail of economic transformation in April 2016 when it announced the implementation of Vision 2030. If thoroughly implemented, the visions are bound to impact traditional domestic Gulf politics and the ability of governments to continue to convince domestic and global audiences of the merits of stability and security at the expense of political dynamism. The visions are confined to moving state centred oil-based capitalist economies into open neo-liberal finance, privatisation, knowledge, diversification and greater consumption, without any visible political transformations. The silence with regard to political transformations has not gone without notice. Even the most loyal of Gulf nationals lament the absence of dynamic political culture across the six GCC states (Al-Rasheed, 2017).

The 2017–18 Qatar diplomatic crisis began when Saudi Arabia, United Arab Emirates, Bahrain and Egypt abruptly cut off diplomatic relations with Qatar in June 2017 withdrawing ambassadors and imposing trade and travel bans. The crisis is an escalation of the Qatar-Saudi Arabia proxy conflict. The Saudi-led coalition cited Qatar‘s alleged support for terrorism as the main reason for their actions. Saudi Arabia and other countries have criticised Qatar‘s relation with Iran. On 27thJuly 2017, the Qatari foreign minister Mr. Mohammed bin Abdulrahman Al Thani indicated that Egypt, Saudi Arabia, United Arab Emirates and Bahrain were showing ‗stubbornness‘ to Qatar and had not taken any steps to solve the crisis. On 24th August 2017, Qatar announced restoration of full diplomatic relations with Iran. Saudi Arabia and the UAE notified ports and shipping agents not to receive Qatari vessels or ships owned by Qatari companies or individuals. Saudi Arabia closed the border with Qatar. Saudi Arabia restricted its airspace to Qatar Airways. Qatar was forced to reroute flights to Africa and Europe through Iranian airspace. Saudi Arabia‘s central bank advised banks not to trade with Qatari banks in Qatari riyals. The Foreign Ministry of Qatar criticised the ban, arguing that it undermined Qatar‘s sovereignty. All GCC countries involved in the announcement ordered their citizens out of Qatar. Saudi Arabia, UAE, Bahrain gave Qatari visitors and residents two weeks to leave their countries. The foreign ministries of Bahrain and Egypt gave Qatari diplomats 48 hours to leave their countries. Kuwait and Oman remained neutral. Kuwaiti mediators in Riyadh were presented with a list of Saudi demands of Qatar. These included cutting off all links with Iran and expelling resident members of Hamas and the Muslim Brotherhood, curbs on the freedom of al-Jazeera, to stop ‗interfering‘ in foreign countries‘ affairs and to cease any funding or support for terrorist organisations (Wikipedia, 2018). Regional tensions, the sectarian divide, Arab-Persian political rivalry, falling oil prices marked 2015 and 2016 (Kumarswamy, 2018).

India and GCC Economic Relations

The importance of GCC for India lies in its energy security, the volume of trade, and the large presence of Indian expatriates. Due to lower oil prices and international slowdown, trade figures witnessed more than 30 per cent decline between 2013 and 2016 (Khatana, 2018). As a result, India‘s trade deficit with the GCC has fallen from US$ 46 billion to US$ 14 billion in last three years (The Hindu, 2016). The drop in oil prices also impacted remittances from the region, leading to a 2.2 per cent fall, which occurred for the first time in last six years. In 2014–15, remittances to India from the GCC amounted to US$ 36.7 billion, and dropped slightly to US$ 35.9 billion in 2015–16 (The Hindu, 2016). According to the World Bank, if oil prices stay low for a prolonged period, or undergo unforeseen drops, remittances from GCC to India could fall further in the future (Bundhun, 2016). It is important to note that GCC countries are the biggest source, contributing about 60 per cent of total remittances received by India in 2015–16 which contributed nearly 3.3 per cent to its GDP.

In the given situation, Bahrain offers less opportunities and more challenges to India. The issues of counter-terrorism and increase in trade suggest a formal type of engagement from Indian side. The lowering of oil prices has led to decline in oil trade. There is need to explore nonconventional sectors in the relationship between the two countries.

OMAN

Oman is an important trading partner of India in the GCC with bilateral trade exceeding US$ 5.70 billion in 2013-14 and US$ 3.86 billion in 2015-16. The contribution of over 688,000 strong Indian community in the progress and development of Oman is well acknowledged. The economic ties are an important pillar in the strategic partnership between the two countries. The mutual investment between the two has grown significantly in last few years, and stands around US$ 7.5 billion. The first share of the India-Oman Joint Investment Fund has already been invested, which was around US$ 100 million. However, the bilateral trade has seen fluctuations in recent years. During 2011–12, India‘s exports to Oman stood at US$ 1.3 billion, which further increased to US$ 2.5 billion in 2012–13. In 2013-14, they stood at US$ 2.8 billion. However, after this it has been constantly declining. In 2014–15, India‘s exports decreased to US$ 2.3 billion, and dropped further to US$2.1 billion in 2015–16. India‘s imports from Oman also saw a decline from US$ 5.7 billion (2013–14) to US$ 1.7 billion (2014–15) and US$ 1.6 billion (2015– 16). Total trade declined in 2014–15 by 28 per cent to US$ 4.1 billion (Jatin Kumar, 2018).

The economic and commercial relations between the countries have strengthened further by the presence of Indian private sector companies like Wipro, Larson & Toubro, Shapoorji Pallonji, Jindal, Aditya Birla Group, Nagarjuna Construction Company, Simplex, and KEC who are engaged in various projects in Oman. An Indian-Omani joint venture—Sebacic Oman will be constructing the Sebacic Duqm Acid refinery which is worth around US$ 1,200 million. Oman is among top five sources of fertilizers for India accounting for 5.26 per cent of India‘s fertilizer imports. India imports 8 Metric Tons (MT) of urea, 25 per cent of which is supplied by Oman India Fertilizer Company (OMIFCO) (Ahmed and Soni, 2017).

Mr. Yousuf bin Alawi bin Abdullah, Minister Responsible for Foreign Affairs, Sultanate of Oman visited India on 3rd June 2014 to congratulate the Indian new leadership on behalf of his government (MEA GOI, 2014). External Affairs Minister Smt. Sushma Swaraj paid a return visit to the Sultanate of Oman from 17th-18th February 2015. During the visit, the two sides discussed issues of mutual interest (MEA GOI, 2015). The Fifth Meeting of the India-Oman Joint Working Group on Manpower was held in New Delhi on 26thJuly 2016. The Indian delegation was led by Shri Manish Gupta, Joint Secretary, Ministry of External Affairs and the Omani delegation was led by Mr. Saleh Bin Ayil Al Amri, Advisor to the Minister of Manpower, Sultanate of Oman (MEA GOI, 2016). Mr. Yousuf bin Alawi bin Abdullah, Minister Responsible for Foreign Affairs, Sultanate of Oman visited India on 2nd – 3 rd April 2017, called on Prime Minister Shri Narendra Modi and both exchanged views on the close relations between India and Oman (MEA GOI, 2017).

In recognition of the growing strategic relations between Oman and India, Prime Minister of India, Shri Narendra Modi, paid a State visit to Oman from 11th-12th February 2018. His Majesty Sultan Qaboos bin Said received Prime Minister Shri Narendra Modi on 11th February at Bait al Barakah. Majesty the Sultan and the Indian Prime Minister exchanged views onl issues of common interest. The Indian Prime Minister also received H.H. Sayyid Fahd bin Mahmoud alSaid, Deputy Prime Minister for the Council of Ministers and H.H. Sayyid Asa‘ad bin Tariq Al Said, Deputy Prime Minister for International Relations and Cooperation Affairs and Special Representative of H.M. Sultan Qaboos. The two sides expressed satisfaction over the current state of bilateral relations and agreed to further expand their cooperation to new areas of mutual interest, including space, cyber security, energy security, renewable energy and food security etc. The two leaders directed their Finance and Trade Ministers to work together to find ways and means to substantially increase the flow of bilateral investments and trade. The Indian Prime Minister welcomed the invitation to Indian companies to invest in various sectors in the special economic zones of Oman, including SEZs in Duqm, Sohar and Salalah. The Indian Prime Minister offered India‘s partnership and cooperation in areas of priority, such as minerals and mining, manufacturing, logistics, infrastructure, tourism, agriculture and fisheries, IT and IT enabled-services, skills development, innovation etc.

The Indian Prime Minister apprised His Majesty The Sultan of various key initiatives of the Government, including ―Start Up India‖, ―Make in India‖, ―Smart City‖, ―Digital India‖ and ―Clean India‖, highlighting their strong potential to provide Indian economy a positive thrust for sustained growth. The Indian Prime Minister invited Omani Sovereign Wealth Funds, including State General Reserve Fund, and private businesses to invest in India (MEA GOI, 2018).

KUWAIT

Kuwait has been an important trading partner for India in GCC with a total trade of US$ 5.95 billion in 2016-2017. It was also the seventh largest crude supplier to India in 2016-17. Over 900,000 strong Indian community in Kuwait has been contributing to the development of Kuwait. Both countries have emerged as reliable partners with shared interests, extensive commercial relations, Indian expatriate presence and cultural engagements. Bilateral relations remained stable during 2015 and 2016, although trade witnessed a drop. In the wake of the Arab Spring protests and domestic political developments in Kuwait, curbs on political freedom of citizens have intensified and the state has moved towards political and social deliberalisation. The problem areas in domestic context include restrictions on freedom of speech, assembly and movement. Political relations between India and Kuwait during 2015 and 2016 were limited and there were no major political visits. India and Kuwait share robust economic relations, though overall trade has witnessed a drop due to falling oil prices. The share of Kuwait in India‘s total trade has progressively shrunk from 2.22 per cent in 2011–12 to 1.92 per cent 2014–15 and 0.97 per cent in 2015–16 due to reduction in the bilateral trade from US$ 17.62 billion in 2011–12 to US$6.21 billion in 2015–16. The share of Kuwaiti oil in India‘s total oil imports has reduced from 9.1per cent in 2011–12 to 4.19 per cent in 2015–16. Oil imports from Kuwait are at their lowest in five years, at US$ 4.05 billion in 2015–16 (Das, 2018).

In November 2015, Indian Engineering, Procurement and Construction (EPC) companies secured contracts worth US$ 5 billion for development projects in housing, hospitals, oil and gas sector, universities, power transmissions etc. in Kuwait (The Economic Times, 2015). On 26th January 2015, Shapoorji Pallonji and Co. Ltd. signed US$ 150 million contract with Kuwait University for construction, operation and maintenance of buildings of colleges of Law, Social Science and Sharia and Islamic Studies in Sabah Al-Salem University City (The Times, 2015). Kuwait National Petroleum Corporation awarded contract worth US$ 77 million to Larsen and Toubro in May 2015 to replace an old power substation at Al-Ahmadi refinery (DNA, 2015).

5th Session of Joint Working Group (JWG) on Labour and Manpower with Kuwait was held in New Delhi on 14th December 2016. Shri Manish Gupta, Joint Secretary, Ministry of External Affairs led Indian side and Dr. Mobarak Al-Aazmi, Deputy Director General, Public Authority for Manpower, Sector of Planning and Professional Skill Levels Verification led Kuwaiti side. (MEA GOI, 2016). The then Minister of State for External Affairs, Shri M.J. Akbar led an Indian delegation for the Third Meeting of India–Kuwait Joint Ministerial Commission for Trade, Economic, Scientific and Technological Cooperation held in Kuwait from 18th –20th September 2017 (MEA GOI, 2017). These visits have cemented mutually beneficial ties encompassing a wide range of political, commercial, energy and diaspora related issues. While Indo-Kuwaiti relations have remained stable, political and energy ties have been minimal. However, the economic sphere has been dynamic and multi-faceted. Kuwait is vulnerable to regional geopolitical and sectarian fault lines. A proactive foreign policy towards Kuwait is required—with more political engagement and heightened security cooperation to address issues of common concern such as terrorism, maritime security and energy security.

QATAR

Qatar is an important trading partner for India in the Gulf region with bilateral trade in 2013-14 touching US$ 16.72 billion. Qatar is the largest supplier of LNG to India, accounting for over 65 per cent of its global imports and 15 per cent of Qatar‘s export of LNG. India is the third largest export destination for Qatar and is its tenth largest imports source. Indians form the largest expatriate community in Qatar. There are over 630,000 Indian nationals working in Qatar, whose positive contribution in progress and development of Qatar is well recognised.

A MoU for investment in India‘s National Investment and Infrastructure Fund (NIIF) was signed with the Qatar Investment Authority in 2016 (Times of India, 2016). Qatar‘s Sovereign Wealth Fund held by the Qatar Investment Authority (QIA) and other State-owned entities as well as the wealth held by private investors in the country are attractive investment propositions for India‘s growing market (Hussain and Ghosh, 2015). Qatar has several large-scale investments in India, including a more than US$ 1 billion stake in the telecommunications company Bharti Airtel (BQ Magazine, 2015). India‘s corporate sector—particularly construction/infrastructure and IT sectors—has many operations in Qatar. These include Larsen &Toubro, Punj Lloyd, Shapoorji Pallonji, Voltas, TCS, Wipro, Mahindra Tech, HCL etc. SBI, ICICI and other Indian banks have limited operations under the Qatar Financial Centre or private exchange houses (BQ Magazine, 2015). On 7th June 2016, the Supreme Committee for Delivery & Legacy (SCDL) announced that a Qatari company, Al Balagh Trading & Contracting and L&T had been appointed as the main contractors to build the 40,000 seat capacity Al Rayyan Stadium for football in time for the World Cup matches scheduled for 2022 (Supreme Committee for Delivery and Legacy, 2016).

The second round of Foreign Office Consultations between India and Qatar was held in New Delhi on 5th June 2014. The Indian side was led by Shri Anil Wadhwa, Secretary (East). The Qatari delegation was headed by Mr. Mohammed bin Abdullah bin Mutib Al Rumaihi, Assistant Minister incharge of Asia in the Ministry of Foreign Affairs. The meeting reviewed progress in bilateral relations (MEA GOI, 2014).

H.H. Sheikh Tamim bin Hamad Al-Thani, Emir of the State of Qatar paid a state visit to India from 24th-25th March 2015. He was accompanied by a high-level delegation. During the visit, H.H. the Emir of Qatar called on President of India and held bilateral talks with Prime Minister, Shri Narendra Modi (MEA GOI, 2015).

Sheikh Abdullah Bin Nasser Bin Khalifa Al-Thani, the Prime Minister and Minister of Interior of the State of Qatar undertook an official visit to India from 2nd – 3rd December 2016. He was accompanied by senior Ministers, including Finance, Transport & Communication and Municipality & Environment and CEOs of Qatar Chamber of Commerce & Industry, Qatar Airways, Deputy CEO of Qatar Investment Authority (QIA) and key captains of Industry. The two Prime Ministers had a delegation level meeting where they reviewed the state of bilateral relations and exchanged views on ways and means to further expand and consolidate the close, multi-faceted relationship between the two countries. It was agreed to expedite steps to put in place the necessary framework so that economic actors on both sides can take full advantage of the opportunities available, particularly in the area of infrastructure, special economic zones, civil aviation, energy, petrochemicals, health and pharmaceuticals, information technology, education, tourism and agriculture. The two leaders also emphasised the need to take practical steps to build on the framework provided by the Agreement on Defence Cooperation signed in November 2008 by enhancing cooperation in the fields of specialised training, exchange of information and joint production of defence equipment. Three Agreements/MOUs were signed, including the MOUs on Technical Cooperation in Cyber Space and Combating Cyber Crime; and between the Supreme Committee for Delivery & Legacy of Qatar and the Confederation of Indian Industry (CII). Separately, an MoU between Qatar Ports Management Company and Indian Ports Global Private Limited was concluded. During the visit, Prime Minister of Qatar called on then President Shri Pranab Mukherjee. The Home Minister of India, Shri Rajnath Singh, called on the Prime Minister of Qatar during the visit. The two sides resolved to work closely to combat terrorism, radicalisation, preventing spread of sectarianism. They discussed cooperation on counterterrorism, intelligence sharing, countering terror-financing and money laundering (MEA GOI, 2016).

The Fourth Meeting of India-Qatar Joint Working Group on Manpower was held in New Delhi on 24th -25thNovember 2016 to review labour and manpower related issues. Shri Manish Gupta, Joint Secretary, Ministry of External Affairs led Indian side and Mr. Mohammed Hassan Al Obaidly, Head of Labour Sector, Ministry of Administrative Development, Labour and Social Affairs led Qatar side.

Minister of Foreign Affairs of Qatar Sheikh Mohammed bin Abdulrahman Al-Thani visited India on 25th -26thAugust 2016 and met External Affairs Minister Smt. Sushma Swaraj during which matters of mutual interest pertaining to bilateral, regional and international affairs were discussed. The visiting Qatari Minister called on Prime Minister Shri Narendra Modi. The Indian side thanked Qatar for contributing significantly to India‘s energy security, being the largest supplier of LNG. The visiting Minister assured India of continued Qatari support in this regard through uninterrupted energy supplies. The Minister assured India of the continued safety, welfare and well-being of the Indian community and briefed the Indian side about new labour laws in Qatar which favour expatriate workers. During the meeting, the Qatari side welcomed participation of the Indian companies through project exports in Qatar‘s infrastructure development, including for the ongoing FIFA 2022 related infrastructure. On regional issues, Sheikh Mohammed briefed his Indian interlocutors about the situation in the Gulf region. He was briefed that India believes that peace and security in the Gulf are of paramount importance for the continued progress and prosperity of the countries in the region. India is of the view that all parties should resolve their differences through a process of constructive dialogue and peaceful negotiations (MEA GOI, 2016).

India closely followed the emerging situation in the Gulf region in the wake of the recent decision by the Kingdom of Saudi Arabia and some other countries to break diplomatic relations with the State of Qatar. India is of the view that all parties should resolve their differences through a process of constructive dialogue and peaceful negotiations based on well-established international principles of mutual respect, sovereignty and non interference in the internal affairs of other countries. India believes that peace and security in the Gulf are of paramount importance for the continued progress and prosperity of the countries in the region. International terrorism, violent extremism and religious intolerance pose grave threat not only to regional stability but also to the global peace and order and must be confronted by all countries in a coordinated and comprehensive manner. India has time-tested friendly relations with GCC countries. With over eight million Indian expatriates living and working in these countries, India has vital stakes in the regional peace and stability. Indian Government closely monitored the situation and was in regular contact with the regional countries. Their authorities have assured India continued support for welfare and well-being of the resident Indian communities (MEA GOI, 2017).

SAUDI ARABIA

Saudi Arabia is the fourth largest trading partner for India with bilateral trade exceeding US$ 25 billion in 2016-17. As our largest supplier of crude oil, Saudi Arabia accounts for about 20% of our total annual imports. About 3.2 million strong and vibrant Indian community forms the largest expatriate group in Saudi Arabia. Their positive and well-appreciated contribution in the development of Saudi Arabia has been an important element of our bilateral engagement. For India, Saudi Arabia is the largest supplier of oil, exporting worth US$ 15.17 billion in 2015–16. There has been a drastic fall in the value of oil imported compared to 2013–14 when India imported around US$ 32.78 billion worth of oil from the Kingdom. This amounts to 15.65 per cent of India‘s total energy imports worldwide, and has also witnessed a fall from 18 per cent in 2013–14. Despite the fall in oil prices, Saudi Arabia has been consistent in its supply of oil to India. Though it is an important trading partner, Saudi investments in India remains far below potential and during the last 15 years, it has totalled only US$ 53.37 million.

The beginning of the protests in the Arab world brought a number of political, security, economic and strategic challenges for the Kingdom of Saudi Arabia. Amidst unprecedented changes taking place throughout the region, Saudi Arabia was able to contain unrest in its Eastern Province and at the same time, played a key role in trying to change the geopolitics of the region. It has faced strong internal security challenges emanating from terrorism and severe economic downturn following the fall of global oil prices. To protect its interests in the immediate neighbourhood, it has made military interventions in Bahrain and Yemen. Amid all these domestic and external challenges, there has been a change of guard following the death of King Abdullah in January 2015. India‘s relationship with Saudi Arabia has remained unaffected by the internal changes in the Kingdom. Bilateral trade continues to grow steadily and Saudi Arabia remains the top supplier of oil for India. Both countries are looking to build a comprehensive strategic partnership

On 25th April 2016, Deputy Crown Prince Mohammad bin Salman announced the Saudi Vision 2030 which envisages making the Kingdom the heart of the Arab and Islamic worlds by turning it into an investment powerhouse and the hub connecting the three continents of Asia, Europe, and Africa (Kingdom of Saudi Arabia, 2016a). He has described the vision as ―ambitious yet achievable blueprint‖ (Kingdom of Saudi Arabia, 2016a) for establishing the long term goals of ―a vibrant society, a thriving economy and an ambitious nation‖ (Kingdom of Saudi Arabia, 2016a). In June 2016, Saudi Cabinet approved the National Transformation Programme 2020 (NTP), with the objective of building the institutional capability to meet the aspirations of Vision 2030. The NTP identifies the strategic objectives of the Kingdom in different fields, and the initiatives necessary to meet the themes of the Vision 2030. The strategic targets of the NTP included an increase in non-oil governmental revenue from US$ 43.46 billion to US$ 141.32 billion; raising non-oil export commodities from US$ 49.33 billion to US$ 87.99 billion; and increasing foreign direct investment (FDI) from US$ 8 billion to US$ 18.66 billion by 2020 (Kingdom of Saudi Arabia, 2016b).

Prime Minister Shri Narendra Modi visited the Kingdom of Saudi Arabia on 2nd-3rd April, 2016 and held discussions with King Salman Bin Abdulaziz Al-Saud on bilateral, regional and multilateral issues of mutual interest (MEA GOI, 2016). Prime Minister Modi invited big Saudi companies like Saudi ARAMCO and Saudi Basic Industries Corporation (SABIC), among others to invest in India. During meetings, Saudi companies have expressed interest in investing in the infrastructure sector, like railways, ports, and roads. India intends to draw investment from the huge Saudi Sovereign Wealth Fund (SWF). According to the Sovereign Wealth Fund Institute, Saudi Arabia has the fifth largest SWF, with US$ 514 billion holdings at present. To further promote cooperation on investment, both sides signed the ‗Framework for Investment Promotion Cooperation‘ between Invest India and the Saudi Arabian General Investment Authority (SAGIA). The 11th India-Saudi Joint Commission meeting held in New Delhi in May 2015 also discussed exploring investment opportunities on both the sides. The strategic energy partnership suggested involvement and joint ventures in the production and technology involved in the oil business. Prime Minister Modi‘s visit has further accelerated this as both countries agreed to establish joint ventures and investments in the petrochemical sector in Saudi Arabia. In order to take their energy engagements to the next level, both have agreed to cooperate in the fields of training and human resource development; they have also decided to set up the ‗IndiaSaudi Arabia Ministerial Energy Dialogue‘. These are some significant steps in the direction of building a strategic energy partnership with Saudi Arabia. (MEA GOI, 2016).

Mr. Adel bin Ahmed Al-Jubeir, Minister of Foreign Affairs of the Kingdom of Saudi Arabia visited New Delhi on 7th-8th March, 2016 during which issues of mutual interest were discussed. The Minister for Petroleum and Natural Gas, Shri Dharmendra Pradhan, visited Saudi Arabia from 13th–14th April 2016 and held bilateral meetings with Chairman of Aramco, Khalidal-Falih and the Saudi Vice-Minister for Petroleum, Prince Abdulaziz bin Salman and discussed various investment proposals in areas like oil, gas, petrochemicals, exploration and production (MEA GOI, 2016).

External Affairs Minister, Smt. Sushma Swaraj visited the Kingdom of Saudi Arabia from 6th-8th February, 2018. She met with the Saudi leadership to discuss issues of mutual interest. She participated at the inauguration of the prestigious National Heritage and Culture Festival ‗Janadriyah‘ being held in Saudi Arabia, at which India is the ‗guest of honour‘ country. The Minister held bilateral discussions with the Saudi Foreign Minister Adel Jubeir and discussed issues of mutual interest. She said that India‘s flagship programmes including ‗Make in India‘, ‗Digital India‘ complement well with ‗Vision 2030‘ launched by Saudi Arabia and invited Saudi investments in India. The External Affairs Minister called on His Majesty, the King Salman bin Abdul Aziz Al-Saud and thanked him for according India the honour at the festival (MEA GOI, 2018). However, despite flourishing trade, there has been a sharp fall in the value of the trade from US$ 48 billion in 2013–14 to US$ 39 billion in 2014–15 and US$ 26 billion in 2015–16. The decline in the value of the total trade is primarily because of lower international oil prices.

UNITED ARAB EMIRATES (U.A.E.)

The U.A.E. is among the largest investors in India in terms of foreign direct investments. It contributes significantly to India‘s energy security and has been the fifth largest supplier of crude oil to India in 2015-16. India‘s well-balanced bilateral trade amounting to around US$ 50 billion makes U.A.E. India‘s third largest trading partner while for the U.A.E. India is the largest trading partner. About 2.6 million strong and vibrant Indian community forms the largest expatriate group in the U.A.E. Their positive and well-appreciated contribution in the development of U.A.E. has been an important anchor of excellent bilateral engagement. In 2015– 16, India exported US$ 30 billion worth of goods to the U.A.E. and imported goods worth US$ 19 billion (Quamar, 2018). According to the Organisation of Economic Cooperation and Development (OECD) report, India-U.A.E. is world‘s second largest migration corridor, with 2.8 million Indians migrating to U.A.E. between 1995 and 2015 (Deulgaonkar, 2017). Moreover, India as the world‘s highest recipient of remittances (World Bank, 2017) receives almost 50 per cent of its total remittances from the GCC countries; and among the GCC the highest amount— nearly 38 per cent—comes from the U.A.E. (Bundhun, 2015).

Smt. Sushma Swaraj, Minister of External Affairs visited the United Arab Emirates (U.A.E.) on 10th -12thNovember 2014. She interacted with the top U.A.E. leadership and discussed issues of mutual interest (MEA GOI, 2014).

Prime Minister Shri Narendra Modi visited U.A.E. on 16th -17th August, 2015. Prime Minister Modi met with H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of United Arab Emirates and Ruler of Dubai. The visit of Prime Minister of India to the U.A.E. has redefined the bilateral relationship and elevated it to a strategic partnership (MEA GOI, 2015).

H.H.Sheikh Abdullah Bin Zayed Al-Nahyan, Minister of Foreign Affairs of United Arab Emirates led a delegation of senior officials and captains of leading UAE business houses to India for the 11th session of the India-UAE Joint Commission Meeting for Technical and Economical Cooperation, held on 2nd – 3rd September 2015, in New Delhi. His Highness was accompanied by Ms. Reem Ibrahim Al Hashimi, Minister of State in the Ministry of Foreign Affairs. During his visit, H.H. Sheikh Abdullah Bin Zayed Al-Nahyan called on the Prime Minister of India and had meetings with External Affairs Minister, Minister of Defence, Minister for Railways, and National Security Adviser. H. H. Sheikh Abdullah Bin Zayed Al-Nahyan co-chaired the Meeting of the Joint Commission with External Affairs Minister of India. During the Joint Commission Meeting, the two sides discussed subjects in areas like, Trade & Commerce; Investments; Finance & Banking; Energy, Hydro-carbons, Petrochemicals & Fertilizers; Defence and Space; Transport, Civil Aviation, Ports & Meteorogy; Health & Agriculture, Education, Culture & Tourism; Security and Combating Crime; Immigration, Consular and Indian Community related issues and arrived on agreements to enhance our cooperation in these areas. The two sides agreed to increase the bilateral trade by 60 per cent over the next five years and also to encourage the investment institutions of the U.A.E. to raise their investments in India, including through the establishment of U.A.E.-India Infrastructure Investment Fund, with the aim of reaching a target of US$ 75 billion. The two sides agreed to work for early establishment of the planned India-U.A.E. Joint Fund for investments in the infrastructure sector in India. An India-UAE Joint Business Council was inaugurated by the two Foreign Ministers and the two sides signed MOUs on cooperation in the areas of Higher Education & Scientific Research; Tourism, Specifications and measures, for cooperation between the respective Telecom Regulatory Authorities and between the Federation of Indian Chambers of Commerce and Federation of U.A.E. Chambers of Commerce & Industry (MEA GOI, 2015).

H.H. General Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces visited India from 10th – 12th February 2016. The Crown Prince called on then President Shri Pranab Mukherjee and held bilateral talks with Prime Minister, Shri Narendra Modi on issues of mutual interest (MEA GOI, 2016).

India and U.A.E. held the first meeting of Strategic Dialogue between the two Foreign Offices on 20th January 2017 in New Delhi. The meeting was co-chaired by the then Minister of State of External Affairs, Shri M.J. Akbar and Dr. Anwar Gargash, Minister of State in Ministry of Foreign Affairs of U.A.E. The two sides were represented by strong delegations drawn from a number of relevant Ministries and Departments. The two sides discussed number of issues ranging from cooperation in areas of trade & investments to expanding bilateral cooperation to new areas under the strategic partnership, in areas of energy security, renewable energy, defence & security, electronics & information technology and space and agreed on number of new initiatives to further strengthen the bilateral cooperation (MEA GOI, 2016).

The then Minister of State for External Affairs, M.J. Akbar visited the U.A.E. from 10th - 11thApril 2017 and the U.A.E. leadership holding discussions on issues of mutual interest (MEA GOI, 2017).

Dr. Anwar Gargash, U.A.E. Minister of State for Foreign Affairs held delegation-level talks with the then Minister of State for External Affairs, Shri M.J. Akbar on 9th August 2017 during his visit to India. He also met with External Affairs Minister Smt. Sushma Swaraj and Foreign Secretary Dr. S. Jaishankar. Dr. Gargash was accompanied by Mr. Mohammed Sharaf, Assistant Minister of Economy and other senior officials in the Government of the U.A.E. The two sides reviewed progress of U.A.E. investments in India. The then Minister of State for External Affairs Shri M.J. Akbar expressed satisfaction over the signing of the MOU on the framework for facilitating the participation of U.A.E. Institutional Investors in National Infrastructure Investment Fund, with Abu Dhabi Investment Authority agreeing to contribute towards the NIIF Master Fund. Dr. Gargash briefed his Indian interlocutors about the situation in the Gulf region. He was briefed about India‘s position that peace and security in the Gulf are of paramount importance for the continued progress and prosperity of the region (MEA GOI, 2017).

Prime Minister Shri Narendra Modi paid a visit to the U.A.E. from 10th-11th February, 2018 and met with Prime Minister and Vice President of the U.A.E. and Ruler of Dubai, H.H. Sheikh Mohammed bin Rashid Al Maktoum, in Dubai on 11th February 2018. Prime Minister Modi delivered his key note address on the theme- ―Technology for Development‖- at the sixth World Government Summit in Dubai, where India was invited as the Guest of Honour. On the side-lines of the World Government Summit, Prime Minister Modi met with a select group of senior GCC CEOs and Business Leaders. This visit allowed leadership of the two countries to take regular stock of the bilateral ties and to review the progress made in implementing the Comprehensive Strategic Partnership agreement signed in January 2017. Prime Minister Modi and Crown Prince Sheikh Mohammed bin Zayed Al Nahyan reaffirmed their abiding commitment to further consolidating the comprehensive strategic partnership and expressed satisfaction at the meticulous follow up on the decisions taken during their previous meetings to achieve the set targets. Both leaders noted the robust and forward-looking bilateral engagement in the past two years across a whole range of spheres, including political, economic, trade and investment, energy, education, culture, defence and security, etc. Acknowledging India‘s highly successful and cost-effective space programme, the U.A.E. side evinced interest in deepening cooperation with India in space exploration under the existing MOU on Space cooperation signed during February 2016. The leaders expressed satisfaction at the holding of the first Joint Working Group Meeting in December 2017 under the existing MOU on space cooperation. They welcomed proposed cooperation in the identified areas of remote sensing, space science, satellite navigation, launching services, academic cooperation and industry interactions. Both leaders noted the excellent trade and economic ties between the two countries, as each other‘s major trading partners and expressed satisfaction at the current level of bilateral trade, which amounted to about US$ 53 billion in 2016-17.

With an aim to devise a long-term strategy on trade enhancement, the two leaders decided to examine various tariff and non-tariff barriers, and agreed to focus on encouraging trade in identified commodities and to expand access of goods and services in both markets. Crown Prince Sheikh Mohammed bin Zayed Al Nahyan welcomed India‘s decision to participate in Dubai Expo 2020. Prime Minister Modi reiterated the interest of Indian companies to be a partner in the infrastructure projects being undertaken by the UAE in preparation for the Dubai Expo as well as in UAE‘s development plans. Both leaders reviewed the progress in realizing the US$ 75 billion target for UAE investments in India committed towards infrastructure development. Prime Minister Modi welcomed ADIA‘s participation in India‘s National Infrastructure Investment Fund as an anchor investor and welcomed DP World‘s agreement with NIIF to create a joint investment platform for ports, terminals, transportation and logistics businesses in India. He also welcomed UAE‘s continued interest in investing in infrastructure development in India, especially in priority areas such as renewable energy, power generation and transmission, defence production, real estate, industrial corridors and parks, railways, roads, ports, shipping, logistics and food processing among others. Crown Prince Sheikh Mohammed bin Zayed Al Nahyan welcomed interest from Indian IT and technology companies in investing in the UAE, and encouraged them to use the UAE as a platform for expanding their businesses in the region. The two leaders complimented the work of the ministerial-level UAE-India High Level Task Force on Investments in promoting bilateral investment ties between the two countries. They noted the positive outcome of its fifth meeting held in January 2018 in Abu Dhabi, and urged the Task Force to explore investment opportunities in both countries, including through India‘s flagship initiatives such as ―Make in India‖, ―Digital India‖, ―Skill India‖, ―Smart India‖, ―Clean India,‖ and ―Start–Up India‖. Prime Minister Modi highlighted the strong potential of these initiatives to accelerate the Indian economy‘s robust and sustained growth. The two leaders expressed satisfaction at the cooperation in energy sector, noting that the UAE is one of the leading suppliers of crude oil to India. Prime Minister Modi invited ADNOC and Mubadala to invest in downstream projects in India‘s hydrocarbon sector. Both sides reviewed the progress being made in early implementation of the agreement on Oil Storage and Management between Abu Dhabi National Oil Company and the Indian Strategic Petroleum Reserves Limited signed in January 2017 and underscored that crude oil supply from U.A.E. for the Mangalore cavern would be a significant transformational step in building a strategic partnership in the energy sector. Prime Minister Modi welcomed the decision to award a major oil concession to ONGC-led consortium from India in the ADMA-OPCO field in Lower Zakum. Prime Minister Modi thanked the U.A.E. leadership for supporting initiative of International Solar Alliance (ISA). Both sides welcomed the signing and ratification of the Framework ISA Agreement by U.A.E. (MEA GOI, 2018).

Due to the drop in oil prices, the GDP growth of the U.A.E. has been sliding—from 4.6 per cent in 2014 down to 3.4 per cent in 2015—and 2.5 per cent during 2016 (The World Bank, 2016). Nevertheless, with investments in financial sector and growth in airline and tourism sectors, the U.A.E. was able to tide over revenue losses from oil sector (Quamar, 2018). It has also been able to achieve some success in diverting oil revenues to develop the non-oil sectors. The Emirati rulers have invested significantly in optimising oil production capacity, and are investing heavily in capacity building in renewable energy to be able to maximise oil exports (BBC News, 2017). With astute fiscal management and the proposal to implement VAT from 2018, the government aims to minimise dependence on oil exports (Augustine, 2016). It is also investing heavily in human resource development and creating a knowledge-based economy to adjust to changing market needs. Overall, the economic situation has started to recover from the recession and the adverse impact of falling oil prices (Quamar, 2018).

India and the U.A.E. share strong and robust economic relations that form the back bone of the bilateral ties. The U.A.E. is India‘s third largest trading partner, the second largest export destination, and the fourth biggest source for imports. For the U.A.E., India is the second largest trading partner, the second largest export destination, and the third biggest source of imports. However, the volume of trade has declined from a high of US$ 75.4 billion in 2012–13 to US$ 49.7 billion in 2015–16 owing to low oil prices and an overall slowdown in global trade. Both countries are aware of the potential to increase bilateral trade. Hence, during Prime Minister Modi‘s visit to the U.A.E., they agreed to expand trade by 60 per cent in the next five years. (MEA GOI, 2015).

The U.A.E. continues to play an important role in its energy security, and supplied nearly 8 per cent of its energy needs in 2015–16. It is India‘s fifth largest supplier of oil and gas oil contributes only 40 per cent of total imports, signifying the diversification in the goods that India imports from the U.A.E. The decline in the volume of energy trade between India and the U.A.E. is mainly due to lower oil prices that had touched a high of US$ 140 per barrel in June 2014 but witnessed a sharp fall subsequently, to touch a bottom of US$ 30 per barrel in mid-2016. As of early 2017, it has consolidated to reach US$ 50 per barrel. While oil prices have stabilised, India is keen to improve its energy security, and the U.A.E. has responded positively by agreeing to store oil in India‘s strategic storage facilities (Quamar, 2018). During the visit of Prime Minister Modi, the two sides agreed to establish a US$ 75 billion U.A.E.-India Infrastructure Investment Fund. The India-U.A.E. HLTFI has held several meetings since September 2015 to discuss and finalise the modalities of the investment fund. Between April 2000 and September 2016, India received a cumulative investment of US$ 4.3 billion from the U.A.E., thus becoming the 10th largest source for FDIs in India (DIPP, 2016). There has been a three-fold increase in FDI inflow from the U.A.E.: from US$ 350 million in 2013–14 to US$ 1 billion in 2015–16, thus being the fifth largest investment source for India during the period (DIPP, 2016). More than 800 leading Indian companies have opened their businesses in the Jebel Ali Free Zone (JAFZA) and many Indian business houses have a strong presence in Dubai and Abu Dhabi. Further opportunities are opening up as the U.A.E. is looking to diversify its economy, strengthen its financial and service sectors, and establish the Emirates as a global tourism and sports hub (Quamar, 2018).

Conclusions

India has friendly relations with all GCC countries and has strategic interests due to energy security as well as presence of over eight million expatriates. India should continue to engage with all sides without antagonising any of the countries and without taking sides. Except for Bahrain and UAE, India has high trade deficits with all the GCC countries. This imbalance is due to skewed nature of India‘s imports in favour of oil and gas. In countries like Kuwait, Qatar and Saudi Arabia, hydrocarbons account for more than 90 per cent of India‘s imports. India should capitalise on the diversification plans of countries. Though investments are its prime agenda, diplomatic outreach has not materialised due to bureaucratic bottlenecks and unattractive opportunities. India will have to ensure that investments are not entangled in domestic political and legal traps through transparency, efficiency and professionalism. India‘s interests in the GCC have deepened due to significant trade and investment relations along with increasing expatriate presence. Hence, peace and stability in the region acquires greater significance for India.