India adopted “Look West” policy in 2005 for deepening engagement with West Asian countries who have been considered as ‘extended’ neighbours. Broad parameters of India’s Middle East policy were largely in place when Narendra Modi was elected Prime Minister of India in 2014. A reorientation of Indian foreign policy in Gulf region is seen since Modi became Prime Minister, as the region has been receiving considerable political, diplomatic, strategic, economic attention and new focus towards Gulf region was brought about by Modi’s active role and engagement with overseas Indian community in the Gulf (Kumarswamy, 2018). The new government followed same course, intensifying what was known as “Look West” policy, by focusing on three main axes: Arab Gulf countries, Israel and Iran (Burton, 2019). India’s need to develop economically made West Asia increasingly important, both as source for fuel imports and for Indian labour and remittances. Saudi Arabia, Iran and Qatar have all been vital suppliers of hydrocarbons (Economic Times, 2019). Since oil boom of mid-1970s, number of Indians living and working in Arab Gulf states (Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and UAE) has grown rapidly. In Arab Gulf states alone, number of Indians was estimated at around 5.7 million in 2012, rising to 8.5 million by 2018 (Irudaya Rajan, Varghese, and Jayakumar, 2015; MEA, 2018; Abraham, 2012). Indian political and business leaders realised that countries like Saudi Arabia and Qatar could supply more oil and gas, respectively (Siyech, 2017) and wealth accumulated made Gulf countries potential sources of foreign investment (Choudhury, 2017).
West Asia Policy in Initial Period of Modi
India’s former Minister of External Affairs, Sushma Swaraj, attending 9th ministerial meeting of Gulf Cooperation Council (GCC) in 2015, pushing for GCC – India Free Trade Agreement said that Gulf was “extended part of India’s neighbourhood” (Taneja, 2020). As Sushma Swaraj explained in August 2016, “In our diplomatic engagements in the last two years, you will therefore find that major focus now is using international partnerships to advance domestic flagship programmes … This tight meshing of domestic and diplomatic goals is in fact one of the hallmarks of Modi Doctrine” (MEA, 2016). Then Indian Foreign Secretary S. Jaishankar laid out India’s foreign policy agenda in a speech in March 2015 (MEA, 2015). After speaking of depth and breadth of New Delhi’s engagement with Southeast Asia and Japan, he argued India was becoming more active in areas to its west. He noted that India’s West Asia policy in past had been “an evolutionary happening that was relatively autonomous of strategic calculations.” He spoke of India developing “Think West” policy where it leveraged growing overseas interest in India to develop connections to other parts of the world. While Modi had used phrase “Link West” in earlier speeches, he had tended to incorporate all regions on that side of India (Modi, 2014).
In public statements Prime Minister Narendra Modi did not mention West Asia, other than odd reference to Israel. His first priority was “Neighborhood First” policy. Modi spoke of being troubled by dislike and suspicion with which many neighboring countries held India and wanted this reversed. Modi’s second priority was to restore foreign investor confidence in Indian economy and hence was to aggressively reach out to India’s extensive diaspora. His third foreign policy priority was to stabilise relations with great powers. In first half of 2015 Modi made 17 overseas visits. While Modi held summit meetings with 14 Pacific Island states and visited every single Central Asian capital, he did not visit any West Asian state (Wikipedia, 2017). In initial foreign policy period, from April 2014 to July 2015, West Asia intersected only marginally with Modi’s early foreign policy interests. There were small indications India had an eye to West Asia, but on policy front there was nothing out of the ordinary. Everything was as per India’s traditional Gulf policy. A restatement of India’s long-standing West Asia policy was laid out by Secretary Shri Anil Wadhwa, senior diplomat in charge of the region, in April 2015 (MEA, 2015). He stated the standard Indian interests in Persian Gulf: security of oil and gas supply lines, remittances and employment for seven million-strong Indian diaspora, trade and investment relations and Defence and security ties. While expressing concern at region’s political chaos, Secretary Wadhwa stressed India was “non-prescriptive and non-judgmental” about events there.
India was “not in the business of exporting democracy.” He saw India’s success as having ensured “bilateral relations with virtually all countries of the region have been progressing … we have managed to insulate our core interests from negative fall-out of regional developments.” India’s West Asia policy was, in effect, a bundle of individual relationships and India’s goal was to ensure there was no entanglement. “We would not wish to create parallel mechanisms that will affect our bilateral relations,” he said. Wadhwa repeated India’s standard arguments for keeping region at arm’s length. He admitted India had been asked to play “more active role in the Middle East,” however “we need to assess this based on our strategic leverages and realistic consideration of our strengths and limitations.”
One-point new Modi government did raise repeatedly was to urge Gulf sovereign wealth funds to invest in India’s infrastructure plans. These appeals began within few months of Modi’s elections and became part of any official comment relating to West Asia. When Qatari emir, Sheikh Tamim bin Hamad Al Thani, came visiting in March 2015, he was invited to put some of his country’s wealth into India’s “mega industrial manufacturing corridors” (MEA, 2015).
In early August 2015, Indian government announced that Prime Minister Narendra Modi would be making a state visit to United Arab Emirates (UAE) on August 16-17. While UAE had always been one of India’s largest trading and investment partners there had been little strategic or political meetings of minds between the two. Modi’s visit was notable for scope of agreements that he signed with UAE’s Crown Prince Mohamed Bin Zayed. In Defence and security space, the two agreed to work together on terrorism finance, hold half-yearly meetings between respective national security advisers, consider manufacture of arms in India and strengthen Defence relations through regular military exercises. In economic sphere, the statement spoke of “transformative economic partnership” – a relationship seen by India having potential to structurally change trajectory of India’s growth. The tangible side to this was UAE commitment to invest $75 billion in India from its main sovereign wealth fund “including through establishment of UAE-India Infrastructure Investment Fund” to help “India’s plans for rapid expansion of next generation infrastructure, especially in railways, ports, road, airports and industrial corridors and parks.” UAE also agreed to store portion of its strategic oil reserves in Indian reservoirs which would help make these reservoirs commercially viable. This paved way for Modi’s visit, with clincher being UAE’s offering to divert portion of its largest wealth fund’s $1 trillion capital stock to boost Indian economy.
The Abu Dhabi royal family was driven by several strategic concerns. Abu Dhabi, concerned about fallout that global financial crisis had on Dubai in particular, was eager to change UAE’s reputation into more respectable. UAE was wary of Washington’s policy in the region. India’s rising military and economic capabilities led UAE to conclude it was worthwhile to invest more in relations with India. The UAE state visit can be seen as turning point for India which had tended to see West Asia having little to offer to policies of India’s economic and governance agenda. Modi had seen developed world as his natural overseas partners, with his emphasis on technology-heavy policy areas like renewable energy and cashless finances (Dorsey, 2016; Abhineet Kumar, 2017).
Modi’s visit to UAE was a turning point. West Asia came to be seen as not only important but crucial to success of India’s economic agenda. The Persian Gulf is now important as source of investment and less as source of energy. UAE had made strategic commitment to help India’s rise as regional player. UAE was accorded special place by India, which saw foreign policy as a means of securing international partners to serve its domestic agenda. Relationships with countries regarded as having great potential to advance this agenda were described as “transformational” or “transformative.” The Abu Dhabi royal family also indicated to Modi that it was speaking on behalf of other Gulf monarchies. Modi was to subsequently visit Qatar and Saudi Arabia and receive further promises of large-scale investment. The prospect of being able to tap such large pool of politically guided investment capital was particularly attractive to India. Though India had ambitious infrastructure plans, it was facing cyclical downturn in domestic private investment and finding it hard to attract funds for long-term infrastructure projects (Bhattacharjee, 2016). The Gulf monarchies were prepared to make their funds available through government-to-government channel. India was trying to leverage geopolitical interest of a foreign government to make latter commit to long-term capital investment.
While Saudi spoke of investing more in India, it gave no firm numbers due to its own financial difficulties. Modi also visited Qatar, but Doha’s interests were more geared to energy relationship. India’s interest was Qatar’s promise to invest $35 billion in India’s petrochemical infrastructure. Qatar wanted stronger political ties with one of its major customers in an increasingly competitive international gas market. Qatar has long provided over 90 percent of India’s imported natural gas, but with India emerging as fastest-growing import market for both gas and oil in 2016, began to look more closely at India (Bagchi, 2015).
Shift in West Asia Policy in Later Years
West Asia is now much more integral to Modi’s foreign policy than it was when Modi was first elected as Prime Minister. Large-scale investment and maritime security are now much more central to India’s interests while energy and diaspora, while still important, are lower in priority list. Speaking about West Asia in March 2015, Indian foreign secretary said, “we are no longer content to be passive recipients of outcomes … Our growing capabilities and stronger national branding, in fact, makes us a credible partner.” Later, in annual summary of Indian foreign policy in January 2017, he indicated how much more thought was being given to West Asia (MEA, 2016). “While the East was more an exercise of consolidation with ASEAN, reaching out to Gulf Cooperation Council and Iran have been among one of the hallmark initiatives of the current government,” he said. “As a result, India is involved in Middle East in a manner in which it has not been for many decades.”
Compared to first three years of Modi government, there has been a fundamental shift in traditional drivers of India’s West Asia policy. India’s traditional priority regarding Persian Gulf has been stability of oil and gas prices and supplies from that region. The remainder of its economic relations revolved around exporting goods and ensuring remittances from its diaspora in Gulf regions. India sees its Gulf policy as source of strategically driven, long-term investments. While it still has energy interests, India finds itself in buyer’s market with multiple sources of oil and gas. Its own domestic energy policy has come to focus on renewable energy. The Indian foreign secretary, in a 2016 speech, said energy “has seen the greatest activism in our recent diplomatic interactions. Where fossil fuel is concerned, one objective is to obtain assured upstream access in producing economies” but besides listing four Gulf countries he added Russia and Mexico as targets of Indian energy diplomacy (MEA, 2016). While Prime Minister Modi uses the diaspora to promote his domestic agenda, keeping doors open for Indian overseas workers does not dominate India’s thinking as it once did. The Indian government now invests more in ensuring proper treatment of its nationals. India is also reassessing sort of political regimes it feels it can work with in West Asia. In past India had been comfortable with regimes such as those led by Saddam Hussein and Hafiz al Assad, who were seen as guarantors of regime stability. The fall of these one-party regimes had led India to engage with Gulf monarchies. This acceptance has accelerated under Modi regime, which now sees Gulf monarchies as future partners in India’s economic and strategic future. This is because of Modi’s insistence that foreign relations be measured by contribution it makes to domestic development agenda (Bagchi, 2016). A newfound relationship with UAE is at heart of this sea-change seen in last few years. UAE’s main wealth fund, Abu Dhabi Investment Authority (ADIA), has been tasked to be the agency to handle billions of investments that two governments have agreed upon. UAE has sought to funnel its investments through India’s newly created National Infrastructure Investment Fund (NIIF), a state-run body designed to collect foreign capital and handle the task of choosing, finalising and monitoring large-scale infrastructure investments. (Ananta Centre and Confederation of Indian Industries, 2016; Financial Express, 2017; Economic Times, 2016). India has been cautious about expanding its military presence in the Gulf and Arabian Sea area. The region’s various governments are sharply divided in their support for various local protagonists in civil wars of Syria, Iraq and Yemen. Any Indian military activity would be interpreted as favoring one country or another, something India remains sensitive about.
Gulf Cooperation Council (GCC)
During this tenure, Modi visited UAE twice, Saudi Arabia, Iran, Qatar, Jordan and Palestine. These visits cemented a renewed and revitalized outreach for India towards West Asia. The joint statement concluded during these visits had recognized India as ‘strategic partner’ of these competing countries. History is littered with strong ties between India and West Asia, capitalised efficiently and effectively, by Narendra Modi.
Modi’s visits to Gulf countries can be seen as an effort to consolidate economic ties. The interest has been reciprocal as Saudi Arabia, UAE and other GCC countries increasingly see India as an important emerging market for their energy exports, foreign investments and joint venture opportunities. Upon his victory, crown prince of Abu Dhabi, Mohammed bin Zayed, was one of first world leaders to congratulate Modi over a telephone call. UAE conferred Modi with their state’s highest state honour, the Zayed Medal for bringing ties between two regions to all new level. In 2016, Saudis also conferred Modi with their highest civilian honour, the King Abdulaziz Sash during his visit to Riyadh. The answer to success lies more within interests of Gulf nations than Modi government’s outreach. These cash rich states looked towards Indian economy to secure their own future financial interests. As US becomes mostly self-sufficient on oil, Asian economies led by India and China, are expected to lead purchases of crude. This market capacity makes for ideal destination for Gulf’s rich wealth funds. The convergence of Israel and Arab world’s backdoor diplomacy gave India lot of breathing space. The launch of direct flight operated by Air India to Tel Aviv using Saudi Arabian airspace in 2018, becoming first such route, was monument more for growing Arab – Israel thaws than India – Israel dynamic (Taneja, 2020). The GCC countries have become India’s preeminent oil and gas supplier and leading trade partner. Indians are largest expatriate group in each of the six GCC countries. GCC was established in 1981 as a response to Iranian Revolution and outbreak of Iran– Iraq War in 1980 (Goldman & Rapp-Hooper, 2013). The initial hope for formation of GCC was that this would provide security in wake of revolution in Iran. One thing that has bound GCC together is shared belief among Gulf states that they are vulnerable to external actors who view them as rich and militarily weak states. This has engendered a deeply held belief among Gulf rulers that safety of their kingdoms is more likely to be achieved by working together than by acting apart. When their sovereignty has been threatened, GCC states have put their grievances on hold and have given out united response in political, economic and military realms. Despite sharing same security challenges, Arab Gulf States do not share same national interests. They have engaged in stand-offs over oil, borders, Iran, Israel etc. Though there have been intra-Gulf disputes over territorial rights, hampering development of bonds needed for GCC member states to trust each other fully with their own strategic security, they have never militarised their differences with each other beyond localised clashes. The belief in benefits of collective security is very strong in GCC (Miller, 2016). The quest for regional security in midst of political upheavals prompted these countries to consider different options for security cooperation especially as oil wealth began to attract more attention from their larger neighbours. Similar political systems, shared values and common bonds between Gulf nations have contributed to emergence of GCC (Ramazani, 1988). The Arab Gulf States are central players in world economy because of oil. Oil wealth enabled them to deal with global financial crises better than any other regional grouping (Miller, 2016). GCC states control 29% of world’s crude oil reserves, highlighting relative global importance of Gulf petroleum sector. GCC states also held 22.3% of world’s natural gas reserves. Fueled by massive oil revenues, value of GCC real GDP was $ 1,479.3 billion in 2017 enjoying one of world’s highest GDP per capita. State Revenues are largely driven by exports of hydrocarbons that stood at $ 345 billion in 2018 (U-Capital, 2018). GCC states’ financial surpluses and sovereign wealth funds are among highest in the world. Combined GCC funds are close to $ 2.9 trillion in total assets, which is 40% of global sovereign wealth funds (Rachman, 2017). Many Indians based there were important contributors to country’s finances, accounting for significant share of its global remittances, which climbed from $64 billion to $79 billion in 2012-18 (Abraham, 2018). India’s diaspora of nearly 9 million people in the region not only send an annual $ 50 billion in remittances back home but have also emerged as the “most trusted, liked, and preferred workforce” as partner in their development. Their security and welfare are of paramount importance for which India has worked out special bilateral institutional mechanisms with respective countries. 3,050,000 Indians live and work in Saudi Arabia constituting the largest number of Indian passport holders abroad, followed by 2,800,000 in UAE. The processes propelling this movement took place because of high comfort level with Indians due to millennia old people to people interaction and their reputation for being law abiding and hard-working. The number of Indians in GCC countries has continued to rise notwithstanding tightening of domestic policies to curtail influx of expatriate manpower and despite the ongoing wars in West Asia from early 2011 onward. These facts represent an enormous vote of confidence in Indians and India by GCC countries in which internal security is now an even greater concern than it had been earlier.
No major power has kind of people-to-people socio-cultural compatibility and socio-economic interdependence with countries of Gulf region, in particular with GCC countries that India has. India is very proud of being world’s largest democracy, but India believes strongly that it is not the business of foreign countries to impose forms of government on other countries. India believes that monarchies in GCC countries are a factor of stability, fully in keeping with customs, ethos and traditions of Arabian Peninsula. The Gulf region occupies pivotal place in India’s political, economic and strategic interests and policies. The Gulf region has always been significant to India because of geo-strategic location, availability of energy resources, home for Indian diaspora. India’s trade and economic ties with the region which are around $ 160 billion are growing. About 60 per cent of oil is imported from this region. India has definite interest in balanced and peaceful strategic environment in Gulf countries which are source of two-thirds of India’s crude oil requirements and form largest trading regional bloc for India, accounting for 23.7 per cent of Indian trade.
Gulf Diplomatic Crisis – India steering clear
When manifestation of Qatar crisis occurred in mid-2017, India was under pressure to take sides. Instead, it resisted and adopted neutrality as way of maintaining economic relations with both sides (Al-Tamimi, 2017; Siyech, 2019). The absence of adverse outcome in Qatar crisis arguably reflects India’s wider experience in Middle East under successive Indian governments and Modi’s Look West policy to date. India’s present approach has been helped by wider structural context in which the region finds itself (Burton, 2019). West Asia has become more multipolar, with power diffused among regional and extra-regional actors (Cavatorta, 2014; Kamrava, 2018). India’s approach balances different parties (Burton, 2019).
The eruption of the Qatar diplomatic crisis in June 2017 complicated India’s relations with Arab Gulf states. India referred to the rift as an internal matter involving GCC countries (Chakraborthy, 2017). Nevertheless, Saudi-led bloc’s closure of sea, land and air borders appeared to pose challenges for India: 1) how to maintain trade relations with Qatar and 2) how to effect evacuation from Qatar of massive number of Indian migrant workers should situation further deteriorate. After India initially placed a hold on exports shipments to Qatar, normal trade flows between the two countries resumed (Basu, 2018). It is worth underscoring Qatar’s importance as an LNG supplier to India, which is seeking to increase share of cleaner energy resources in its primary fuel mix (Clemente, 2018). The worst moments of the Qatar diplomatic crisis have long passed. However, political lines in Middle East have been redrawn. The Gulf countries appear to have adapted to impasse rather than to have found a formula to break it. The underlying conditions that precipitated the crisis have not fundamentally changed. The ongoing diplomatic feud has not significantly disrupted or damaged India’s relations with Qatar or its adversaries. India has maintained a neutral position in all the region’s internecine conflicts and feuds. This approach strongly indicates that India will take every precaution to ensure that relations with Qatar remain on an even keel.
Israel and Palestine
During Cold War, India had stood publicly with Arab states and Palestinian nationalist struggle. Domestic considerations were important here. Growing Arab-Israeli dialogue during 1990s and Oslo peace process between Israel and Palestinians diminished that conflict’s centrality in the region. Israel demonstrated greater sympathy for India in Kashmir. When US threatened arms embargo over Kargil crisis in 1999, Israel stepped up and became key supplier for India. Between 2000 and 2015 Israel-India arms trade was worth over $2.2 billion. India is Israel’s biggest arms buyer, purchasing weapons at an average of $1 billion each year. Israel has exported radar killer missiles, synthetic aperture radar, ground sensors, assault rifles, laser guided bombs, beyond visual missiles and unmanned aerial vehicles to India. As one of the most hi-tech and advanced economies in Middle East, it potentially offered greater value-added trade and investment. While improving and cementing India’s friendship with Islamic states, Modi achieved another stupendous task that was hanging fire for nearly seven decades. He established diplomatic relations with Israel on a high note.
Modi became first Indian prime minister to visit Israel in 2016 and both he and Israeli Prime Minister Benjamin Netanyahu visited each other with exceptional warmth and cordiality, signing up host of defence, strategic and scientific agreements on agriculture, space cooperation and international development and promising to help each other against common enemies. The visit reduced influence of Palestinians in India’s foreign policy, which was compounded by growing rapprochement in late 2018 between Arab Gulf states, reflected in hosting of Israeli leaders by Oman and UAE. Modi opened a new chapter in Indo- Israeli friendship without in anyway hurting more ancient links with Islamic states. Since India forged formal diplomatic ties with Israel 25 years ago, relations have rapidly improved. The apparent paradox is reconciled by what Indian Prime Minister Narendra Modi refers to as ‘de-hyphenation’ a policy of basing bilateral relationships on their own merits and viewing them as independent of one another.
Even as Modi strengthened Indian friendship with Israel, he gave great importance to Palestanian struggle and praised Palestanians for their tenancity and courage. Modi is first Indian prime minister to visit Palestine. Modi’s visit to Ramallah in early February marked the first time an Indian leader had traveled to Palestinian territories. India described the trip as “truly historic,” during which cooperation agreements worth $50 million were signed. It came just one month after Israeli Prime Minister Benjamin Netanyahu spent five days in India, which, in turn, followed Modi’s trip to Israel in June 2017, first-ever visit by an Indian premier to Israel. Modi’s separate visits to Israel and Palestinian territories appear to underscore his desire not to have one relationship affect the other. India is being viewed as neutral party by Middle East nations. This has allowed India to cultivate close ties with Israel, Iran’s arch-foe, with which India maintains good relations too. Iran is Saudi Arabia’s nemesis, but this has not precluded development of close partnerships between India and Saudi Arabia.
India, Iran and Iraq
Iran is vital for India regarding energy resources and connectivity goals. Iran is a key to landlocked Central Asia, accessing Afghanistan and bypassing Strait of Hormuz via Chabahar Port. India’s relations with Iran are traditionally positive and in 2003, the two countries launched a bilateral “strategic partnership”. After the Islamic Revolution, Iran and India maintained strong diplomatic relations. The two countries continued high-level visits. In 2003, President Mohammad Khatami was chief guest for India’s Republic Day celebration. During 2009-2010, India imported nearly $10 billion worth of crude oil from Iran while exporting $1.9 billion worth of steel, minerals, chemicals and rubber. India and Iran first agreed to cooperate on development of trade and transport links through Central Asia and channel them towards Iran’s Chabahar port in 2003 (Ashwarya, 2016). Chabahar port was established by India and got operated in 2018. It is great achievement for India. It makes a counterbalance to Gwadar port of Pakistan. Through Chabahar Port India will be directly connected with Central Asia and Afghanistan. Prime Minister Modi visited Tehran in May 2016 with an aim to craft strategic relationship with Iran and expand India’s ties with West Asia. In February 2018, Rouhani visited India, becoming first Iranian President to visit India in a decade. During his visit, the two sides signed a dozen agreements, centerpiece of which was a deal on development of strategic Chabahar port to facilitate faster trade between the two countries, bringing Indian commercial and strategic presence into the region. Iran removed India in July 2020 from Zahedan rail line project (Misra, 2021) due to payment delays and delays in starting work (Haidar, 2020). On 3rd February 2021, Indian government stated that despite reports of Iran starting project without India, India remains engaged with Chabahar-Zahedan railway project. Union Budget for 2021-2022 presented by Finance Ministry allocated Rs. 100 crores for construction and development of Chabahar Port (Nag, 2021). Later, India, Iran and Afghanistan signed a trilateral agreement providing for transport of goods among three countries through the port. India and Iran are also part of North-South Transport Corridor. For India, Iran links it to Central Asia, enhancing Indian security in West and Central Asia (Burton, 2019).
In 2019, India stopped importing oil from Iran. This came after waiver issued to India by United States expired, forcing India to look for alternative fuel and energy sources. Despite Iran and India being allied with opposing powers, the two countries have maintained ties. India’s External Affairs Minister, S. Jaishankar, visited then-president elect Ebrahim Raisi to strengthen ties between the two countries and attended his swearing-in ceremony. Both countries share concerns over Taliban’s control over Afghanistan and have often discussed how they could cooperate (Haidar, 2021).
Leaders from India and Iran have stated that they wish to expand and strengthen their ties, forging closer ties in oil, industrial, agricultural, and trade domains. India and Iran are also willing to start a credit line to facilitate economic growth and trade and have also expressed common concerns over Afghanistan and need for stabilizing the region (Tasnim News Agency, 2022). A similar sentiment was also expressed by then-president elect Ebrahim Raisi and Indian Minister of External Affairs S. Jaishankar, who met soon after the elections to discuss Indo-Iranian ties and importance and need of expanding them (Haidar, 2021).
Due to Iran’s significant hydrocarbon and oil reserves and geographical location, it plays a vital role for India in its energy trade, connectivity ambitions, and access to landlocked Central Asia. Due to India’s unique position with West, which can be used as leverage, India can increase its ties with Iran, convincing countries like United States that growing Indian role in the region will complement its “hands-off” approach. India could use this opportunity to promote dialogue between the West and Iran as neutral third party for JCPOA negotiations and bring normality back into Iran’s economic systems while also assisting them in being reintegrated into the international system (Nair, 2021).
Under the Trump administration, U.S. imposed crippling sanctions on Iran, devastating Iran economically and isolating it internationally. Iran signed 25-year agreement with China to counter the sanctions, joining Belt and Road Initiative and countering economic and international isolation. The 25-year agreement and U.S. sanctions have pushed Iran towards Chinese bloc. While 25-year agreement between Iran and China is an obvious challenge for India, it is essential to note that $400 billion that China plans on investing in Iran is just roadmap (Fallahi, 2021). India can step up and expand its commitment to Iran through Chabahar port. Chabahar port is important for both India and Iran as it will provide access to landlocked Central Asian countries and make Iran a transit hub. Persian Gulf and Strait of Hormuz are often theatres of conflict between Islamic Revolutionary Guard Corps and U.S. military and its allies. This region is also dangerous for shipping vessels as they are often attacked and sunk. Chabahar port will allow Iran to override Strait of Hormuz, reducing shipping costs and time and giving Iran strategic advantage to limit movement through Persian Gulf (Saleh and Yazdanshenas, 2020). Afghanistan also proves to be another area where India and Iran can expand their relations. Taliban hopes to reinvigorate Afghanistan’s economy, Chabahar port will enable Taliban’s access to open seas, reduce shipping and logistical costs, and increase trade and connectivity (Nair, 2021).
India’s crude oil imports from Iran is most important aspect of economic dimension of bilateral relationship. Since implementation of Joint Comprehensive Plan of Action (JCPOA) in January 2016, India and Iran had renewed efforts to deepen relationship. The meeting between Indian Prime Minister Narendra Modi and Iranian President Hassan Rouhani yielded nine agreements, including an accord that leases operational control to Shah Beheshti (i.e., part of Chabahar Port) to India Ports Global (MEA, 2018). The agreements also encompassed taxation, customs duties, and visa requirements, along with cooperation in agricultural, health, and medical sectors. It is important to note that Iran was India’s third-largest supplier of oil behind Iraq and Saudi Arabia (MEA, 2017). If India were to decide to replace Iranian oil with supplies from other producers, this will almost certainly necessitate increasing its intake from Saudi Arabia and Kuwait (PTI News, 2018). However, following this path would impose a substantial financial burden on India. First, India would stand to lose the advantageous commercial terms (i.e., rupee-denominated deals) that it has enjoyed in purchasing Iranian oil (Bhattacharjee, 2018; Mehdudiua, 2012; Second, shifting to alternative suppliers on a long-term basis would require costly upgrading of Indian refineries, some of which are configured to process Iranian grades of crude oil. The increased cost of importing of oil from suppliers other than Iran indefinitely would inevitably drive-up oil prices in India (Dua, 2018). Given the delicate tightrope that India walks in West Asia, cutting off Iranian oil had implications that extend beyond its national borders. India has hitherto sought and managed to balance its relationships by maintaining strict neutrality in the intra-Gulf disputes that have otherwise roiled the region (John, 2017). However, U.S. pressure on India to cease buying oil from Iran placed Delhi in uncomfortable position of being forced to purchase greater volumes from Arab nations. The consequent cooling of relations between Tehran and Delhi could adversely affect progress in other areas, including India’s access to Chabahar Port — regarded by Delhi as an essential node in multi-modal transportation network and connecting the country to Central Asia through Afghanistan (Landay and Jain. 2017; Ganapathy, 2017). Historically, India’s trade ties with Iran have not been adversely affected by Western sanctions.
However, neither Indian government nor Indian companies, given their exposure to US financial system, can just ignore or easily fend off US administration’s pressure to suspend oil purchases from Iran (Vazquez and Westwood, 2018; NDTV, 2018). U.S. has reportedly given “informal indications” of having understood India’s reasons to proceed with the Chabahar port project with Iran (Roche, 2018). India would not want to relinquish this project, especially given that mere 140 kilometres from Chabahar is Pakistani port of Gwadar, which China is developing as part of the “Belt and Road Initiative” and its own effort to gain improved access to Central Asia (Saberin and Jalili, 2018). India’s relations with Iran contain both a national security and an economic dimension. Indian policy makers see relations with Iran not only as a key energy supplier but as a way to contribute to enhancing India’s security in Central and South Asia. Chabahar will make it easier to access oil imports from Iran. It may balance Chinese trade and development projects in Central Asia and Middle East associated with its Belt and Road Initiative. Chabahar offers an alternative to China’s own efforts to extend influence in region, including through its own efforts at improving port of Gwadar in Pakistan (Amirthan, 2017). The Indo-Iranian agreement over Chabahar has been repeatedly delayed, partly because of US sanctions against Iran. Many of those sanctions aimed at undermine Iran’s nuclear program, which seemed to turn a corner in 2015 when the P5+1 (the five permanent UN Security Council members plus Germany) signed Joint Comprehensive Plan of Action (JCPOA). India welcomed JCPOA, hoping the deal would pave way for increased trade and cooperation with Iran. But in May 2018 US withdrew from JCPOA and re-imposed sanctions. As one of Iran’s biggest oil buyers, India was initially exempted, but its waiver ran out in May 2019.
India’s relations with Iraq
Iraq is an important Arab state situated in Persian Gulf region. Iraq diplomatically connected with India in 1947 by ‘Treaty of Perpetual Peace and Friendship’. During Cold War era, India was not supportive of Iraq. Iraq had joined West-led ‘Bagdad Pact’. Iraqi President Saddam Hussein played significant role in improving diplomatic relations with India in 1970s. On several issues, Saddam Hussain was very much supportive of India. Indian experts and professionals had started to work in Iraq, because of its economic potentiality. To earn “Petro-dollar’ Indian workers used to go to Iraq to work in oilfields and construction sectors. Just after first Gulf War ended, US-led alliance took a resolution in UNO that relations with Iraq will be discarded. Economic sanction was imposed against Iraq. India had opposed this decision and advocated in favour of Iraq. India could not take bold decision to continue economic relations with Iraq considering growing rapprochement with US. In May 1998, when India exploded a nuclear bomb at Pokhran of Rajasthan, entire Western World went against India, but Saddam Hussain supported India. US invaded in Iraq in 2003 to topple Saddam Husain’s regime. Though India did not even have an Ambassador in Baghdad from 2004 to 2011 due to security considerations, Iraq’s economic relationship with India has been among Iraq’s top three global economic partnerships in recent years and is growing rapidly. It is now second largest oil supplier to India.
India as part of Minilateral I2U2
India, Israel, UAE and US kickstarted a new minilateral forum as foreign ministers of these four countries met for first time on 20th October 2021. The minilateral forum which is regarded as West Asia Quad is said to focus on ‘expanding economic and political cooperation in Middle East and Asia, including through trade, combating climate change, energy cooperation and increasing maritime security”. The parties focused on six areas for cooperation – water, energy, transportation, space, health and food security – and agreed to bolster bilateral economic partnerships related to trade, infrastructure and investment in the region. There has been an alignment of geopolitical and geoeconomic interests shaping relations among India, Israel, UAE and US. While India and US differ in number of areas, including over India’s engagement with Iran and Russia, US can take advantage of India’s friendly ties with rival countries in the region to help in bridging the divide in pursuit of more robust security architecture in the region. Meanwhile, India’s ties with Israel have greatly transformed since India established diplomatic relations with Israel in 1992. That year, bilateral trade between India and Israel totaled only $200 million. However, from April 2021 to January 2022, it reached nearly $6.3 billion (excluding defence) with balance of trade in India’s favour. Israel has become one of India’s biggest weapons suppliers, on par with US and Russia. In addition, India and Israel have established numerous strategic partnerships in fields of agriculture, climate, water, science and technology and food security. Over recent years, India has become a key trading partner for Gulf countries.
In February, India and UAE signed a Comprehensive Economic Partnership Agreement, allowing most of India’s exports duty-free access to UAE. CEPA is expected to increase bilateral trade in goods, which currently stands at $60 billion annually, to up to $115 billion in next five years. India and UAE have signed additional agreements in technology transfer, renewable energy, infrastructure development, combating cybercrime, food security, cultural exchange, space and skill development. With India’s manpower, UAE’s expanding investment interests, and Israel’s technical expertise – a trifecta of complementary abilities, skills and interests – India-UAE-Israel trilateral trade has potential to reach $110 billion by 2030. Furthermore, Iraq, Saudi Arabia, and UAE are among India’s top five oil suppliers. As India meets 85% of its crude oil demand through imports, ensuring stability in Gulf region is critical for India’s energy security. I2U2 is a natural extension of bilateral relations already existing among India, Israel and UAE and, sharing strong ties with each, US plays role of facilitator. While the four countries may have different notions about significance of this grouping, there are many commonalities and shared interests to drive the forum. As India aspires to be a great power in international politics, minilateral forums, like I2U2, provide India an opportunity to navigate international problems collectively and advance its economic interests. The four countries are geographically disconnected, ideologically different and demographically divergent. However, their interests are increasingly aligning. As a rising global power with deep historical, cultural, political and economic ties with many countries in West Asia, India’s integration seems natural. This is largely result of Prime Minister Narendra Modi’s newfound activism in India’s foreign policy approach and economic diplomacy particularly in West Asia since 2014, which has contributed to shedding India’s inward-looking image. Modi’s ‘Act West’ policy reversed policy inertia that defined India’s West Asia Strategy. As sixth largest economy in the world, projected to become $5 trillion economy by 2026 – 27 and $10 trillion economy by 2033 – 34, India holds pivotal position as major global economic behemoth. This forum is part of larger drive for alignment cooperation in face of power shifts in post-cold war Asia. Alignments are differentiated from alliances in the sense that latter is ‘formal association of states for use of military force, in specified circumstance, against outside their membership (Snyder, 2007). Alignments are conceptualized as formal or informal agreement between two or more countries cooperating based on shared security goals and challenges and include such variety like Minilateralism and Multilateralism. West Asia Quad or Forum, as this new platform is called, could be specifically characterised as a minilateral instituted in place of multilateral bodies failing to effectively deal with regional questions because of rivalrous geopolitics of West Asia region. Minilateral forums are informal, flexible, functional and voluntary frameworks of three or four participants with varied situational interest, shared values or relevant capabilities (Patrick, 2016). Security cooperation develops as a result of convergence of norms, values and practices among states. These countries share certain security values which help them to come together as strategic forum and cooperate in several fields which have potential security value. It can also be seen as a bridge building tool what can be employed with other formal alliances and used to focus on niche areas (Tow, 2018). In recent years, India has shed its policy of restraint focusing instead on strategic autonomy. India has recaliberated its West Asia policy toward “cooperative bilateralism” and “multialignment” – developing issue based strategic partnerships with multiple countries in the region regardless of their rivalries and hostilities. India aims to leverage new economic opportunities presented by emerging multipolar world order where benefits of interdependence far outweigh risks of nonengagement. Under Modi’s administration, India’s relation with Gulf countries and Israel have greatly transformed. A key shift in policy was Modi’s unlinking of India’s relations with Israel and Iran. India and Gulf countries are promoting political, maritime security, counterterrorism, intelligence sharing and Defence cooperation. Visit of India’s army chief to UAE and Saudi Arabia in December 2020, clearly highlights India’s growing Defence and security partnership with the two Gulf countries. A sea change ensued after UAE, Bahrain and other Arab states signed Abraham Accords with Israel in 2020 agreeing to normalise relations. India welcomed the accords as it saw this as a way of facilitating peace and stability in the region.
Reasons behind growing synergies with West Asian countries
Some reasons behind India’s growing synergies with West Asian countries are as follows—
1.Strategically, Persian Gulf is very important zone. Considering India’s maritime security Strait of Hormuz is very important.
2. India is very reliant upon Middle East oil and gas and must maintain cordial relations with most of major suppliers, including Iran, UAE, Qatar and Saudi Arabia, and Iraq.
3. Israel has been very important to India due to technical, intelligence and military support. Israel has been one of major military equipment providers in India.
4. India must consciously calculate balance between its relations with Israel and Iran. How should India deal with Iran – this is a very crucial question.
5. The trading relations between India and the Middle-eastern states are very impressive.
6. To combat international terrorism India has taken several steps in collaboration with Arab countries.
Possible Constraints Associated with “Look West” Policy
Despite Modi’s efforts to cultivate ties with Arab Gulf, Israel and Iran, each presents potential challenges and risks. First, Israel’s improving status with Arab world may not endure. Another intifada or revival of support for Palestinians by wider Arab public could put pressure on Gulf regimes to reverse their current rapprochement with Israel (Rahman, 2019). Second, India’s engagement with Iran over Chabahar is unlikely to eliminate Pakistan/ China option. One reason is more modest scale of India’s efforts in Central Asia and Middle East, especially when compared to China’s Belt and Road. China has already spent about $68 billion on its China-Pakistan Economic Corridor (CPEC) and approximately $200 billion on all other projects to date (Chatzky and McBride, 2019). Indian ambitions may become redundant, if Iran and Pakistan are able to overcome differences between themselves to cooperate and link their ports (Khetran, 2018). Gulf has become more volatile: in an effort to put pressure on other JCPOA signatories, Iran was allegedly behind attacks on several tankers and detained a British-flagged ship and its predominately Indian crew on July 19 (Erlanger, 2019). Caught in the middle, India eventually received consular access to its nationals (Chand, 2019). However, the incident exposed third challenge for India in Middle East: vulnerability of its citizens and economic interests. In recent months India has since deployed two warships and surveillance aircraft to Gulf to protect its shipping there, while making it clear that it will not join US-led coalition that is being formed there (Miglani, 2019). India is susceptible to regional conflicts over which it has little control. The most notable of these is Saudi-Iranian rivalry and boycott of Qatar by Saudi Arabia and UAE. In both cases, struggle for influence in the region are the key.
Dynamic Strategic Realignments in West Asia
West Asia region is a volatile place because of prevalent threats to internal and external security to nations found in the area (Ulrichsen, 2009). West Asia region has been going through massive strategic realignments in aftermath of Arab Spring in 2011. The fall of dictatorial regimes, war in Yemen, rise and fall of Islamic State of Iraq and Syria (ISIS), intra-Arab conflicts such as Qatar diplomatic crisis, Iran’s nuclear deal and subsequent US exit, etc., have shaped strategic thinking of Arab ruling elite. The sharp fall in global oil prices has intensified debate among Arab elite regarding need to rethink socioeconomic structures in order to address challenges to social and political sustainability (Ulrichsen, 2009). These countries are diversifying their economies as well as expanding diplomatic relations with Asian countries in general and India in particular, in order to seek international support for their regimes, reduce their overwhelming reliance on US-led Western countries in terms of economic, political support and arms sales. India has voted thrice against Iran’s nuclear programme in UN, which is explicit support to Arab ruling elite against their perceived threat from Iran (Bhatnagar, 2018). India has adopted policy of neutrality in intra-Arab conflicts. West Asian states realise India’s significance as an emerging political and economic power in Asia and beyond. India is aspirant for important positions in various international foras, like United Nations Security Council (UNSC) which is likely to be seen positively by West Asian states. Modi’s effort is to “transform transactional nature of bilateral ties and add economic and strategic substance” (Kumarswamy, 2018).
India’s expanding regional aspirations across the Indian Ocean are also a factor. India sees the Gulf and South Asia as strategically interactive and interrelated regions and has increased its focus on West Asia accordingly (Pethiyagoda, 2017). Indian policymakers seem determined to raise India’s profile internationally, shed old mindsets and to help India position itself in a positive role rather than just a balancing force, adding that India engages the world with greater confidence and assurance. The growth of India’s power and standing and its active diplomacy can be seen in its renewed focus on West Asian countries. Acknowledging that India’s ‘footprint’ in the region has been relatively autonomous of strategic calculation, Indian policymakers recognise need to develop holistic engagement strategy, which seeks to strengthen economic ties and institutionalise long term security cooperation.
Way Forward
The Middle East has become more multipolar, with power diffused among variety of regional and extra-regional actors. Within this mix India has pursued an approach that balances against different parties and their rivalries. India’s Act West Policy is possibly the biggest success story of Prime Minister Narendra Modi’s government despite many challenges and competing geopolitical interests. West Asia is extremely important for India’s energy security, food security, diaspora welfare and maritime linkages and security. It is also one of most volatile landscapes with simmering hotspots and historic enmities and rivalries. Underlining that India’s conscious outreach to Islamic world has been exceptional in recent years, West Asia, especially Gulf countries, has acquired strategic importance in India’s foreign policy. “Anything that happens there has a direct impact on India’s wellbeing,” The country’s engagement with the region has transcended merely transactional and buyer-seller relationship to a “truly strategic one which is manifested through the accrued dividends in real-time.” One of biggest deficits in relationships with the region was absence of high-level visits from India. Modi has changed this by reaching out to major Gulf countries, including Iran, leading to several strategic initiatives. Modi has become not only first Indian prime minister to visit many of these nations, but also most decorated foreign leader to do so as many countries in the region conferred their highest state honors on him. Highlighting that energy bridge has been major link for India with the region, India has emerged as major destination for their energy and hydrocarbon supplies. India imports over 70% of (its) oil and nearly 90% of natural gas requirements from Gulf countries, adding that its dependence on hydrocarbons is likely to last for another 30-40 years. India is moving to reduce fossil fuel use and diversify towards renewable, which will become newer areas of collaboration with the Gulf. The Gulf countries’ engagement with India has changed as they have begun not only to invest in India’s strategic petroleum reserves, refineries, and infrastructure, but also to invite Indian companies to participate in exploration and upstream activities. Regarding the accelerating trade and investment across sectors in India and the Middle East, over 5,000 Indian companies operate out of UAE special economic zones as UAE has emerged as India’s third-largest trading partner. Saudi Arabia is fourth-largest trading partner of India. Both Saudi Arabia and UAE have committed to invest $100 billion and $75 billion respectively in India. Several other countries are exploring opportunities as India makes it easier for companies and investors to do business. India’s food security is also incumbent upon supplies of phosphates, fertilizers, and urea from several countries like Jordan, Morocco, Egypt, and Tunisia. India’s security cooperation with the region, has “become center-stage” in bilateral collaboration in “all its ramifications including in the intelligence, counter-terrorism, defence, cyber and maritime security.” Before, it was virtually impossible to get any fugitive offenders, economic or terror-related, back to India, this has changed as these countries understood India’s security concerns and have been at forefront of complying with India’s requests. India is also expanding its engagement in Space and other hi-tech areas, as major Gulf economies move towards artificial intelligence-driven fourth industrial revolution, or Industry 4.0, which conceptualizes rapid change to technology, industries, and societal patterns and processes due to increasing interconnectivity and smart automation. Most of the countries see India as their “strategic partner,” a status that represents shared values, perceptions and approaches on matters of security concern. Thus, joint statement with UAE spoke of “shared threats to peace, stability and security,” and agreed to a “shared endeavor” to address these concerns, which is founded on “common ideals and convergent interests” (Joint Statement, UAE India, 2016). It also spoke of need for the two countries to establish close strategic partnership” for “these uncertain times,” and called upon them to “work together to promote peace, reconciliation, stability in the wider South Asia, Gulf and West Asia.”
Similarly, joint statement with Saudi Arabia talked of the two countries’ responsibility to promote peace, security and stability in the region (MEA, 2016). It noted “the close interlinkage of the stability and security of the Gulf region and the Indian sub-continent and the need for maintaining a secure and peaceful environment for the development of the countries of the region.” In Iran, Mr. Modi noted that India and Iran “share a crucial stake in peace, stability and prosperity” in the region, and concerns relating to “instability, radicalism and terror.” The two countries agreed to enhance cooperation between their Defence and security institutions. The absence of an adverse outcome in the Qatar crisis arguably reflects India’s wider experience in the Middle East under successive Indian governments and Modi’s Look West policy to date. For now, India’s Look West policy seems to be working. India’s present approach has been helped by wider structural context in which the region finds itself in. Whereas India’s footprint in Middle East was lighter during Cold War and during 1990s when United States was paramount power in the region, today the situation is more complex (Kamrava. 2018; Cavatorta, 2014). It is telling, and in some ways remarkable, that positive momentum in development of India’s relations with its West Asian counterparts has been sustained despite political turmoil and violence that has convulsed the region. Prime Minister Narendra Modi’s visits to UAE, Saudi Arabia, Iran, and Qatar between August 2015 and June 2016 took place at a time when wars in Syria and Yemen were at their peak and in which these countries were deeply involved. Though there are sharply different perceptions regarding current conflicts in West Asia between India and these countries, the leaders consciously did not allow this to adversely affect their bilateral relations. It is noteworthy that India’s relationships with GCC countries, Iran and Israel started growing simultaneously from early 1990s and really took off, also simultaneously, in new millennium. Based on mutual benefit and advantage, they developed in parallel without impinging on each other even as each of these countries was fully aware of India’s developing relations with others. India’s flourishing relationship with Israel has not damaged its relations with other West Asian countries; on the contrary, scale and scope of these relationships have been expanding. Prime Minister Modi’s interactions with principal countries of the Gulf have affirmed acceptance of India as a credible player in security scenario of this troubled region and have prepared a fertile soil for an initiative to promote regional peace and stability. That India has managed to keep all of these diverse relationships on a positive track in spite of political obstacles has not been easy. Since turmoil in West Asia gathered force in 2011, India has hewed to “hands-off” policy based on principle that regime change through foreign intervention constitutes violation of international norms and law. India has avoided taking sides in any of region’s rivalries or conflicts. India has supported all efforts to defeat barbarous Islamic State as well as U.N. diplomatic initiatives aimed at negotiated settlement of conflicts. The growth of India’s power and standing and of its active diplomacy can be seen in its renewed focus on West Asia. Acknowledging that India’s “footprint” in the region has been “relatively autonomous of strategic calculation”, Indian policymakers recognise need to develop a holistic engagement strategy, one that seeks both to strengthen economic ties and to institutionalise long-term security cooperation. India will be hard-pressed to find a way to balance competing interests and relationships. Initially, Prime Minister Modi’s frequent visits to various countries were lauded as signs of a vigorous and positive foreign policy approach (Ganguly and Chauthaiwale, 2018). Under its ‘Look West’ policy, India has coherently strategised its priorities towards the Middle East and adopted a rational approach to achieve its objectives. India has friendly relations with all West Asian 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. Frequent state-level bilateral visits and extensive economic cooperation has synchronised India – West Asian thinking in areas of energy security, trade and investment, and cross-border terrorism. India should capitalise on diversification plans of West Asian countries. Balancing China, presence of strong expatriate community in West Asian countries and promoting its soft image are key motivating drivers behind India’s growing cooperation with West Asian states. These developments indicate that India’s political presence will become inevitable for West Asian countries in foreseeable future. Security cooperation is also likely to develop in future. India’s interests in West Asia have deepened due to significant trade and investment relations along with expatriate presence. Hence, peace and stability in West Asia acquires greater significance for India.
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