India Look West Policy and Its Impact On Indian GCC Relations

International Politics, Vol. 3, No.
VI, Summer & Autumn 2010
IndiasLookWestPolicyandItsImpactonIndiaGCCRelations GinuZachariaOommen1 KhurshidImam2 Abstract The era of globalization has seen rapid changes in the geopolitical situation the world over. The axis of power has seen shifts and new centers of power have emerged to the fore. In this dynamics of international politics, India too reoriented her foreign policy. The first stage in this orientation was consolidation of her position in southeast Asia through what is referred to as look east policy. The second phase focused on the west Asian region through a policy being termed as look west policy. The look west policy of India coincided with the look east policy of Saudi Arabia and other Persian Gulf countries particularly in the aftermath of 9/11. The congruence of policy interest has resulted in the consolidation and diversification of political and economic relations of India and GCC countries.Themainpurposeofthisresearchistoanalyzethebilateral relations between Indian and GCC countries in the framework of the changed international scenario and the mutual interest at the policy level which is reflected in the bilateral trade and commerce and createdawinwinsituationforbothsides. Keywords:India,GCC,LookWestPolicy,Diaspora,PersianGulf
1. Hermes Postdoctoral Fellow at MIGRINTER, University de Poitiers France, andVisitingFacultyatthe{Persian}GulfStudiesProgram,JNU,India. Email:ginuzach@gmail.com 2. Assistant Professor, Center of Arabic and African Studies, Jawaharlal Nehru University(JNU),India. Email:khurshidimam@gmail.com
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InternationalPolitics
Introduction The countries geographically on Indias west comprising of Iran, Fertile Crescent, North Africa and Persian Gulf countries are considered to be West Asia in the map of Indias foreign policy. ThoughIndiahadhistoricalconnectionswiththisregionthechanged circumstances required a relook in its policy. To secure the growing interests in the western neighborhoodfrom energy security to counterterrorismIndia reoriented her ad hoc responses to individual crises and define what we call a Look West policy. The terminology got acceptance in the academic and intellectual circles in juxtapositiontolookeastpolicyofIndia. The geopolitical churnings in the last one decade has compelled Indian foreignpolicymakerstorelookIndiasstrategicandeconomic policies towards its neighbors. The American invasion of Iraq, the war on terror, the weakening of United Nations, the economic recession, the subsequent fluctuation in the oil prices, the unprecedented food crisis in the world and the EuroDollar crisis has forced the growing Asian economy torestructureitsoutlooktowards the outside world. Moreover, India realized that her unending aspiration to be a member of UN Security Council could be materialized only through its strong bondage with the powerful regional powers like Iran, Saudi Arabia, South Africa, Brazil, Russia, China etc. It is in this context that the head of governments of both Iran and Saudi Arabia were the chief guests in Indias republic day paradein2003and2006respectively. The present paper is an effort to analyze Indias look west policy and the unprecedented expansion of both diplomatic and trade relations with the countries of {Persian} Gulf Cooperation Council (GCC). Hence, each of the GC countries would be individually examined with regards to its relationship with India to find out if the look west policy has really converted into enhanced and diversified bilateralrelationship.
IndiasLookWestPolicy...
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IndiasLookWestPolicy Indias diplomatic profile in the West Asia was determined by a combination of factors such as energy needs, remittance, strategic alliances and religious considerations. Indias West Asia policy has operated within the framework of the international power structure articulated on political, ideological and moral terms till the end of cold war era. The ideological and moral terms were based on the underlining principles of nonalignment, support for national liberation struggles highly influenced by Mahatma Gandhi, and our commitment towards the bondage between Asia, Africa and Latin America. In the postcold war period economic, energy security related issues have taken precedence over moral and ideological considerations.ThemajorstrategicshiftintheIndiaWestAsiapolicy wasduringNarasimhaRaoledCongressgovernmentandVajpayees BJP (Bhartiya Janata Party) government. Narasimha Rao government assumed power in 1991 when the world politics was entering a new era of American hegemony on world politics and the subsequent emergenceofotherpowercenterslikeEuropeanUnion,Chinaetc. At the geopolitical level, the emergence of five sovereign nation states in central Asia had its bearing on IndiaWest Asia relations. (Pradhan, 2004, 14) At this juncture the Rao government treaded away from the Nehruvian socialism, nonalignment and anti imperialism towards economic liberalization and moved closer to the US. Henceforth the US factor played a major role in influencing Indias foreign policy orientation. This brought in the Zionist Israel into the core of Indias West Asia policy orientation. Within West Asian countries Indias focus has not been uniform to a particular country and has seen changes in its focus. Initially Egypt, Palestine and Iraq were the focus of Indias foreign policy and later Indias WestAsianpolicywasreorientedtowardsIsrael,IranandSaudiArabia. Historically the West Asia region has always been a comfortable
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neighborhood to the Indian subcontinent. During the time of Vajpayee led BJP government the focus of West Asia shifted in favor of a tripartite axis IndiaIsraelUSA. However with the coming of the United Progressive Alliance (UPA) government there was a strategic shift in the Indian foreign policy towards its immediate neighbors. TheadoptionofLookWestpolicyin2005bytheUPAIgovernment reflects the increased inclination of India towards its West Asian neighbors. In July 2005 Prime Minister Manmohan Singh in a meeting of Prime Ministers Trade and Economic Relations Committee collectively encouraged the cabinet to pursue the Look West policy The focal point of the meeting was to kick start the India GCC free trade agreement talks and comprehensive economic agreements with all the GCC countries. In this meeting Manmohan Singh stated that The {Persian} Gulf region, like South Asia is a part of natural economic hinterland. We want to pursue close economic relations with all our neighbors in our wider West Asia neighborhood. India has successfully pursued a look east policy to come closer to the countries of South East Asia. We must similarly come closer to our West Asian neighborsinthe{Persian}Gulf.(Baru,2010,5) Strategic relevance of the GCC countries to India has to be placed within the wider framework of strategic geographic and economic terms. The Persian Gulf is an inseparable part of Indias foreign policy that serves mutual interests, confronts terrorism and extremism, as well as taps the investment potential. The GCC is a capital rich region that needs to invest abroad while India is a capital deficient regional power that needs investment. Since 2004 the bilateral engagement has also gathered momentum in terms of high level visits, signing of various MoUs and a remarkable growth of TradeandCommercebetweenIndiaandGCC.IndianPrimeMinister Manmohan Singh visited Qatar and Oman in 2008 and Saudi Arabia in 2010. During his visit in FebruaryMarch 2010, he signed the most significant Riyadh declaration with the Saudi King Abdullah bin
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Abdul Aziz. At the same time Vice President Hamid Ansari also undertook a high level visit to Kuwait in April 2009 and signed significant agreements in the field of education, science and technology and cultural exchange program. Later in November 2010 Indian President Pratibha Singh Patil visited UAE and urged the UAE governmenttoinvestintheIndianinfrastructure.(Pradhan,2010) OvertheyearsIndiahasevaluatedandtunedherpoliciestomatch the rapid changing international power structure finally emerging as a regional power and trustworthy partner. The post 911 world scenario is very different and has deeply affected the world order. It is to be noted that Iran too has a prominent position in Indias Look West policy especially due to the strategic control of Iran on the straitsofHormuz.Irancouldplayanimportantroleinjointmaritime security operations with India in the Persian Gulf region; and also as a strategic partner of India in the reconstruction of Afghanistan. Moreover, Irans capability of providing India with oil and gas at a relatively lower price adds to its prominence in the look westpolicy ofIndia.(Pant,2004,378) At present the IndiaGCC relation figures prominently in the look west policy of India as this subregion is the major economic hub in the West Asian region. The relationship between India and the GCC has grown since the formation of the organization in 1981. The GCC States (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) are the key global suppliers of hydrocarbons. They contribute around 42 per cent and 24 per cent of the world total oil and gas reserves respectively. Ever since 1947 the bilateral relations between India and the GCC states have evolved greatly to touch almost the $20 billion mark in nonoil trade while the oil trade amounted to about $26 billion in 20052006. According to the Department of Commerce, Government of India, the total trade between India and the GCC countries for the years 20082009 stands at US$91.63 billion with total imports of US$59.5 billion and total
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exports of US$32.13 billion. (India, Ministry of Commerce and Industry, 2010) Moreover, Indians comprise the largest expatriate communityinthePersianGulfregion. The relations between India and the GCC countries become a vital subject for both the policy makersandtheacademicsalikebecauseof the presence of a large number of Indians in these countries. Currently, West Asia contributes to 35 per cent of total inward remittances,followedby30percentfromNorthAmerica,20percent from Europe, and 10 per cent from other regions. The GCC countries too, as part of their look east policy, are looking for nonWestern economies to invest their surplus funds and they are also keen on diversifying their petroleumbased economies by moving into the knowledge industry. It is here that India becomes a natural choice which can play a leading role given its leadership in information technologyandskilledmanpower. Each GCC state has a unique profile. Though there are basic commonalities in the policy orientation of these countries, they do maintain independent outlook and exclusively address to their national and local interests. This makes the task of Indian policy makers towards West Asia more complex. Each GCC state requires an independent approach and a policy that is independent of the other GCC states. It is in this background that this paper tries to look intoeachGCCcountryanditsrelationswithIndiaindividually. SaudiArabia Saudi Arabia has a unique place in West Asia. IndiaSaudi relation is time tested and there has been close political, economic and cultural ties between the two regions throughout history. The relations have relatively been cordial over the years with intervening flare ups as during the IndiaPakistan wars of 1967 and 1971. Pakistans eort to mobilize Arab/Islamic states to its side on Kashmir and other issues relatedtoMuslimsinIndiacouldnotdomuch.Thespecialplacethat
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Pakistan had in the Saudis policy did not make any substantial change in the relations with India. On Saudi Arabias request an Indian delegation led by Fakhruddin Ali Ahmed participated in an Islamic Conference in Rabat on September 2225, 1969 to discuss Jerusalems AlAqsa mosque. The Saudi government never imposed any embargo against India during the 1970s oil crisis and India continued to receive 25 million metric tones (175 million barrels) of oil annually. Being the biggest source of crude oil in the OPEC it has thebiggestsayinmoderatingthesupplyandpricingofoil. The unprecedented strains in the USSaudi relations in the aftermath of the 9/11 had its repercussions on IndoSaudi relations. The geopolitical churnings in West Asia especially, thewaronterror by US led allies has led to some reorientation in Saudis foreign policy. American rhetoric of democracy and the regime change inthe Persian Gulf States and its subtle attacks on the Saudi royal family for latters alleged involvement in mobilizing funds for terrorist outfits have altered the proWestern perceptions of Saudis to a great extent. Moreover, the fastest economic growth in India and China and the emerging Asian market marked a significant change in the Saudis foreign policy towards Asia. It is in this backdrop one should analyze the look east policy of Saudi Arabia and King Abdullahs historic visit to India and China in 2006. India has reciprocated each gesturebylookingwesttowardsWestAsiancountries. Signing of the Delhi Declaration in 2006 during the Kings visit gave new impetus to the development of increased understanding and cooperation between India and Saudi Arabia. (Kapila, 2006) The declaration stressed on two major issues, energy security and terrorism along with the commitment to work closely in various aspects like health, research and education, IT, agriculture, sports, pharmaceuticals and so on. Regular meetings ofthejointcommission were also agreed upon for the speedy implementation of the Delhi Declaration.DuringKingAbdhullahsvisittheleadershipofboththe
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countriessharedtheirpositiononvariousissueslikePalestiniancrisis and reaffirmed their commitment for peace, stability and prosperity in the region. India also offered for Saudi students to pursue post graduate and doctorate level studies in technical institutions inIndia, and enhance cooperation in human resources development related to telecommunication.(TimesofIndia,January27,2006) The Saudi King as the Chief Guest for the Indian Republican Day Parade in 2006, hinted at inclusion of India in the Organization of Islamic Conference (OIC) as an observer. India has the second largest Muslim population in the world and yet has been denied the membership of OIC, mainly due to vehement opposition from Pakistan. OIC has visible and strong presence globally as it accounts for 29 per cent of the total membership of the U.N., 47 per cent of the African Union, and 100 per cent of the membership of the Arab League, the GCC, and the Economic Cooperation Organisation (ECO). In addition, three of the seven members of the South Asian Association for Regional Cooperation (SAARC) and three ASEAN statesareinOIC. Indias Vice President Hamid Ansari is of the opinion that neither an ostrichlike posture ofignoringtheOICnoranavidembracewouldserve Indias purpose. Incremental interaction, and a quiet insistence on the restoration of the original membership, would be a better alternative. (Ansari, 2006, 7) Therefore in the changing geopolitical situation it is imperative for India to move closer with OIC which requires active support of leading West Asian countries like Saudi Arabia, Iran etc. AsthecustodianofthetwomostholyIslamicsitesitactsasapillarof regional stability settling intra Muslim states disputes and matters relating to West Asian and Persian Gulf regions. Its place in the Muslim world is also critical for other states with large Muslim population including India. The argument in favor of third partys (Saudi Arabia) intervention in IndoPak relations is conceived in the backgroundofSaudiArabiasposition.
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Both India and Saudi Arabia reiterated the commitment towards combating global terrorism through strategic cooperation. The Delhi Declaration too highlighted that terrorism is the scourge of mankind andtheurgentneedtointensifyandcoordinatebilateral,regionalandglobal cooperation to eradicate and combat the menace of terror. (Kapila, 2006) Both the countries have agreed to erase mutual misperceptions and realized to work together in the newfangled and volatile international order. The security and stability of the Persian Gulf region is of utmost concern to India and India is ready to share its expertise with Saudi Arabia in containing terrorism and to establish steadinessintheregion. SaudiArabiahasalsomadenecessarychangesinitslawstoadjust to the changes in the international market. The new relaxations in Saudi commercial law have strengthened the bilateral investments between both countries to a great extent. Indian companies including ONGC have been given green signal by the Saudi government to set up oil refineries and develop gas fields in Saudi Arabia. India is grabbing this opportunity in the midst of growing energy consumption and its limitation in the diversification of energy sources. Saudi Arabia too is very much interested in investing in India and currently around 49 Saudi companies are engaged in joint ventures in India. (Aneja, 2008) The Reliance industries have expressed an interest in establishing the proposed Jizan refinery in southwest Saudi Arabia. In the last five years many dignitaries including the then Finance Minister P. Chidambaram, External Affairs Minister Pranab Mukherjee, Deputy Chairman of Planning Commission Montek Singh Aluwalia have visited Saudi Arabia to strengthenbothpoliticalandeconomicrelations. India is the fourth largest trading partner of Saudi Arabia with a bilateral trade of more than US $25 billion. (Siddiqui, 2010) Indian companies are the fifth biggest investors in the country. India also imports organic and inorganic chemicals, metal scrap, leather and
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gold from Saudi Arabia. India is the fourth largest importer of Saudi oil after South Korea. The Saudi government has promised India during the Kings visit an uninterrupted supply of oil for next two decades on evergreen long term contracts. Indian exports to Saudi Arabia includes basmati rice, tea, cotton, coffee, spices, tobacco, yarn, primary and semi finished iron and steel, fabrics, chemicals and machinery. During 20042005 India exported basmati rice worth $350 million to Saudi Arabia and it is the largest item that India exports to Saudi Arabia. Interestingly, Indias trade and commerce with Saudi Arabia is steadily ascending since 2001 and it has progressively increased from US $1444.06 million in 2001 to US $1861.08 million in 2004. However the global economic crisis and the subsequent instability in market have reflected in IndoSaudi Arabia bilateral trade as well. The total trade between the two countries has lowered from US $25083.12 in 2008 09 to US $21004.57 in 200910. (Ministry ofCommerceandindustry,2010) Boththenationsareexpectedtoexpandtradeandcooperationand joint ventures in telecommunications, pharmaceuticals, health services, information technology, biotechnology, agriculture, construction projects, energy and financial services. Both the countries have agreed to launch joint ventures for developing gas based fertilizer plants in Saudi Arabia. India has agreed to set up institutes of higher education and research, provide educational opportunities in India for Saudi students and expand cooperation betweenIndiasCouncilforScientificandIndustrialResearchandthe Saudi Arabian Standards Organization (SASO). The agreement has resulted in high power delegations from prestigious Saudi universities visiting India. Apart from other universities like Qasim University, a delegation of the faculties of Medicine of Saudi Arabia visitedAligarhMuslimUniversityinJune2011.(Qaumiawaz,2011) One of the leading FDI investors in India is Saudi Arabia. During 200405 to 200708 Saudi Arabia had US $21.55 million in FDI joint
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venturesinIndia.SaudiArabiaisalsoamongthemajorFDIinvesting countries in India, it has invested 422.1 million INR during August 1991 to December 1999 and 690.71 million INR during January 2000 to August 2008. (Business Standard, 4 June 2008) Investment is observed in diverse fields. Indian firms also have shown interest in Saudi market. According to Saudi Investment Authority survey there were 56 FDI projects during the year 2005 in Saudi Arabia. These projects were in different sectors such as management and consultancy services, construction projects, telecommunications, information technology, pharmaceuticals, etc. Moreover, several Indian companies have established collaborations with Saudi companiesandareworkingintheKingdomintheareasofdesigning, consultancy,financialservicesandsoftwaredevelopment. At the IndiaSaudi Arabia Business Meet in January 2006, Prime Minister Manmohan Singh was quoted as saying our requirements of foreign investment are particularly large in the field of power, telecommunications, roads, ports and housing sectors. Investment needs for the power and telecom sectors alone are estimated at over $100 billion over the next five years. Transportation infrastructure, including airports and railways, will require another $55 billion over the next 10 years. I therefore invite the business community of the Kingdom of Saudi Arabia to take advantage of these opportunities to further establish mutually beneficial Joint Venture projects. (Aneja, 2008, 11) During the visit of Foreign Minister Pranab Mukherjee to Saudi Arabia in April 2008 both the governmentsagreedtoestablishaSaudiIndiainvestmentfund. Indian investors too are interested in Saudi market. To boost business interactions both the governments decided to facilitate the interestedparties.SaudiArabiangovernmentagreedtoprovidelong term visas to businessmen routed through the apex chambers of commerce of the two countries. In 2009 in the 8th session of the Indo Saudi Joint Commission held in Riyadh, both sides agreed to grant longterm multiple entry visas that would facilitate frequent business
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visits from both sides and hence enhance bilateral economic and commercialexchanges.Themeetingwasalsosignificantbecausenew areas of cooperation were introduced for the first time i.e. engineering, agricultural and higher education. (Embassy of India in Saudi Arabia, 2009) Bilateral Investment Promotion and Protection Agreement were ratified to promote the commercial activities at a much higher level. In addition, Saudi Arabia with huge surplus savings is keenly interested in investing in new avenues in Asian countries andIndiahasemergedasalucrativedesignationinthisregard. Trade route security is another major Indian concern. A major portion of Indian trade is through sea route and ensuring the safety of sea lanes of Persian Gulf is also one of the major concerns for the Indian government. Prince Fahd Bin Abdullah, Commander of the Royal SaudiNavalForces,andForeignMinisterPrinceSaudalFaisal came to India in February 2008 to attend a symposium on the Indian Ocean and also participated in the defense exhibition. To reinforce the defense cooperation with Saudi Arabia the Vice Chief of Indian Army visited Riyadh in May 2008 and met various high ranking Saudi military officials to enlarge the interactions and facilitate better cooperation in the fields of training, technical assistance and military hardware. Presently many Saudi military officers are attending training courses in various Indian military academies. (Rasooldeen, ArabNews,2008)Thoughthereisnomentionofdefensecooperation in the Delhi Declaration both sides agreed for high level military exchanges, joint training of troops and joint exercises by the navy in theRedSeaandinthePersianGulf. The emergence of India as a significant power in the South Asian regioncouldhaveencouragedSaudiArabiatoreinforceitslookeast policy centered on India and China. India reciprocated by looking west towards West Asia further fastened the bond. Besides, close relations with Saudi Arabian Kingdom, the custodian of the Holy sites of Mecca and Medina has unbolted a crucial and a strategic
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window for India in the Islamic world and the West Asian region. India with second largest Muslim population cannot afford to ignore the sociocultural potential of West Asian region especially of Saudi Arabiainitsforeignpolicy.RecentlySaudigovernmenthasagreedto increase the quota of Indian pilgrims to Hajj and agreed for hiking the facilities of pilgrims. In addition nearly 1.5 million Indians are working in Saudi Arabia, around 85 per cent of who are in the blue collarworkerscategory.RemittancesbyIndianworkersareestimated to be over US $3 billion annually (Consulate General of India in Jeddah,Accessed2011)
IndoSaudiTrade(inmillionUS$) Year (AprilMarch) 20022003 20032004 20042005 20052006 20062007 20072008 20082009 20092010 Importsfrom SaudiArabia 504.72 737.77 1301.15 1632.34 13383.90 19470.30 19972.74 17097.57 Exportsto SaudiArabia 940.74 1123.31 1412.06 1809.77 2588.18 3711.16 5110.38 3907.00 Totaltrade 1445.46 1861.08 2713.21 3442.11 15972.08 23181.46 25083.12 21004.57
Source:MinistryofCommerceandIndustry,2010 The Saudi kings visit to New Delhi consolidated IndoSaudi Arabia relationship to new heights. New avenues of bilateral relations were explored and Saudi investment in India grew tremendously and started reflecting in the balance of IndoSaudi trade ever since 2006. The long term multiple entry visas to Indian businessmen encouraged not only business and trade but also reflect themutualtrustintherelationsbetweenboththecountries.
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UnitedArabEmirates The UAE too, like Saudi Arabia, has strong economic base in her relationship with India. This relationship, since 3000 BC when Dubai was the hub of Malabar trade, is cemented by various other dimensions of political interaction. Since its formation in 1971 high level political visits has ensured that almost every major corporate house has a presence in UAE by way of actual investments, trade or representative oce. It is estimated that more than 3,300 Indian companieshavesetupmanufacturingunitsoropenedlocalofficesin UAE. Some Indian educational institutions are opening full fledged campuses in medical, engineering and management education. In Sharjah, during the last six to seven years, about 500 Indian rms in diverse verticals have discovered the Hamriyah Free Zone (HFZ) as an ideal place to expandtheiroverseasoperations.UAEhasemerged as the second largest market for Indian products. Indias trade with UAE has increased from $3256.50 million in 20002001 to an impressiveto$43469.50in20092010.TheUAEmarketisalsoamajor sourcing centre for India to expand its business in Africa, Central Asia and in the Mediterranean region. The bilateral trade has grown tremendously as Indias exports to UAE for the period 2005 2006 being$8591.79millionroseto$23,970.40millionin200910.(Ministry of Commerce and Industry, 2010) Simultaneously the import from UAEalsohasshownconsistentrisefromUS$4354.08millionin2005 06toUS$19,499.10millionin200910.
IndiaUAEBilateralTrade(inmillionUS$) Year Export Import Total 200506 8,591.79 4,354.08 12,945.87 200607 12,021.77 8,655.28 20,677.05 200708 15,636.91 13,482.61 29119.70 200809 24,477.48 23,791.25 48,268.73 200910 23,970.40 19,499.10 43469.50
Source:MinistryofCommerceandIndustry,2010
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UAE is one of the strongest trading partners in the West Asian region, representing around 70 per cent of Indias exports to Persian Gulf countries. The booming Indian market is a great attraction for the capitalflush GCC based companies. The impressive returns on investments in India and the ever increasing consumer market worth billiondollarsalongwiththefuturepotentialofIndiaasanemerging economic power and the subdued economic scenario in the West is the main inducement for the GCC based business community to vie forIndia.
BudgetDeficitsandSurpluses(%ofGDP) Country/Year 2007 2008 2009 2010 Bahrain 3.2 10.3 7.5 1.2 Kuwait 29.3 21 8.5 11.7 Oman 13.5 13.3 4.5 1.1 SaudiArabia 12.3 33.6 0.6 3.9 UAE 27.2 31.2 7.3 8.2
Source: Middle East Economic Digest (MEED) August 28September 3,2009 The ninth meeting of IndoUAE (JCM) Joint Commission for Economic, Scientific and Technical Cooperation, formed in January 1975 was held in Abu Dhabi in 2007. Indians External Aairs Minister Pranab Mukherjee participated in the deliberations along with a high level business delegation. The reciprocal UAE delegation wasledbytheforeignministerSheikhAbdullah.Bothsidesagreedto enhance the cooperation in Trade and Investment, Terrorism and Illicit Activities, Education and Culture, Health, Science and Technology, Agriculture, Energy and so on. In addition, the welfare of the Indian workers in UAE was also discussed during the JCM. TheFederationofUAEChambersofCommerceandIndustryandthe FederationofIndianChambersofCommerceandIndustryenteredin to a joint business council agreement in 2004. The UAEs leading telecom services provider Etisalat launched a pilot service for money
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remittance to India in June 2008. (Outlook.com, 2008) Several MoUs were signed between India and UAE in 2006 in the field of trade, science and technology, infrastructure and also a MoU to safeguard the interests of the Indian workers in UAE and to ensure their welfare.(TheSiasatDaily,2010) UAE was the first GCC state to provide aid to India through the Abu Dhabi Fund for Economic Development (ADFAED). (Ghosh, 2009) A large number of Indias public and private companies have taken active part in the industrialization of UAE through contracts or Joint Ventures. Associated Chambers of Commerce and Industry of India (ASSOCHAM) has signed a MoU with the Sharjah Chamber of Commerce and Industry (SCCI) to facilitate trade and joint ventures between the two countries in 2001. (Indias Ministry of External Aairs, 20002001) Interestingly, out of the total number of 818 companies in the Sharjah Airport International Free (SAIF) zone as much as 48 per cent of the companies are Indian entities. A total of 6154 Indian companies are registered with the Sharjah chamber, whichis18percentofthetotalcompaniesregistered.Similarly,there are 600 Indian companies operating in the Jebel Ali Free Zone. (Ministry of Economy, October 24, 2007) About 60 per cent of the companiesintheFujairahFreeTradeZonearefromIndia. In the defense sector, India and UAE are working closely and a Defense Cooperation Agreement was signed in 2003enablingmutual supply of weapons and defense equipments. (Embassy of India in UAE, 2003) In addition, the agreement also provides coordination in the fields of military training, military medical services, environmental issues and pollution caused by military particularly at sea. A Joint Defense Cooperation Committee has been set up which meets at regular intervals to evaluate defense cooperation. Indian naval ships and coast guard vessels are visiting UAE regularly and Rear Admiral Suhail Mohammad Khalifa AlMarar of UAE visited India in January 2006 to discuss the maritime security. (Fatima Al
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Sayegh, 2007) Moreover, UAE army personnel are getting training in India in self financing schemes and few have enrolled for NDC course as well. India has been participating regularly in all the International Defense Exhibitions and Conference (IDEX) organized by the General Cooperation of the UAE. INS Sarvekshak, a hydrographic survey vessel of the Indian Navy docked at Abu Dhabi port on February 21, 2009 to participate in the exhibition. ParticipationfromIndiansideisanindicationofthegrowingdefense cooperationbetweenIndiaandUAEsubsequenttothesigningofthe defense cooperation agreement between the two countries in 2003. (EmbassyofIndiainUAE,2009) The growing IndoUAE relation is reflected in the increased demandforvisas.Asaconsequencethirteennewcenterswereopenedin 2009 to cater to this new demand. An agreement between the Indian embassy, Abu Dhabi, the Consulate General of India, Dubai and the Empost was reached to start centers for receiving applications for passports and visas. The first centre at Deira Dubai was inaugurated on19thofFebruary,2009.(EmbassyofIndiainUAE,2009) India, today, is the largest recipient of remittances with around 40 per cent of its total remittance coming from the Persian Gulf countries. Indians constitute the largest expatriate work force in the GCC countries. Total remittance to India from the UAE in 200809 was around US $11 billion. (Ministry of Foreign Trade, 2010) The estimates are that there are about 5 million Indians working in the region. (Rajan, 2004) MigrationofIndianstotheUAE,whichstoodat 4,600 in 1975, rose to over 125,000 by 1985, and stood at nearly 200,000 in 1999. (Jain, 2003, 103107) The estimated population of Indians in the UAE as of 2009 is around 1.75 million out of a total population of six million. (Indian Express.com, 2010) A majority of IndiansintheUAE(approximately35percent)arefromthesouthern state of Kerala, followed by migrants from Maharashtra, Gujarat and Goa. The majority of Indians are Sunni Muslims (56 per cent),
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followed by Christians (26 per cent) and Hindus (16 per cent). (Jain, 2003,103107) Out of nearly 1.75 million expatriate Indians in the UAE, 700,000 are in Dubai and around 300,000 each in the emirates of Abu Dhabi and Sharjah. (IBNlive.com, 2007) Indian trading community has a historicroleinthesocioeconomicdevelopmentofUAEandtheArab scholar Fatma AlSayegh argues that the modern administration in Dubai is the outcome of the merchant oligarchy and rebellion against the rulers by the Indian traders alongside the locals in 1930s for political reforms. (Jain, 2003, 104105) India is getting concerned abouttheIndianexpatriatesespeciallyagainstdiscriminatorypolicies of the host countries. India played a vital role at the Abu Dhabi Dialogue on contractual labour in 2008 to improve the well being of contractual workers. (Menon, 2008) The timely and positive interventionofIndiasexternalministryhasledtotheenforcementof minimum wage for semi skilled workers especially house maids and also written contract with the local sponsor. It is estimated that the Indian embassy and the consulate together issue about 200,000 passport services and 63,000 visas annually. (The Economic Times, November5,2007) Although economy is vital to IndoUAE relations but it is not basedonoilandgas.UAEformsanimportantroutetoIndiasexport to Africa, Central Asia and other destinations. The reorientation of Indias West Asian policy has put on the discussion table, issues that were long overdue and would ultimately widen the canvas of the relationship. Ever since 2004, every bilateral meeting is opening up a new windows of relationship be it trade, telecommunications, infrastructureorthewelfareoftheworkers. Kuwait Kuwait is one among the traditional allies of India in the West Asian region with consistent trade and commercial relations. However relations between the two countries were disturbed for a brief period
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in the beginning of 1990s in the wake of Iraqs invasion of Kuwait and during the Babri Masjid demolition in India. In the wake of the demolition of the Babri Masjid, the Kuwaiti government made sure that no untoward incident took place on Kuwaiti territory. The Kuwaiti government blocked a decision by a community run supermarket to dismiss Hindu employees from India in protest against the Babri Masjid demolition. The Kuwaiti government was also firm against any demonstration or closure on the issue in Kuwait. Indias ambivalent attitude during the Iraqs occupation of Kuwait was a low phase of IndiaKuwait relations. Kuwaiti leadership publicly expressed anguish and surprise at Indias stand duringtheKuwaiticrisis. However, the geopolitical and commercial compulsions along with the mature leadership have brought back the bilateral ties into normalfoldandcurrentlyKuwaitisthesecondlargestsupplierofoil to India. Kuwait provided about 11 million tons of crude oil and 1.25 million tons of oil products in 2005. (Azhar, 2008) IndiaKuwait trade has been growing at a healthy pace and the exports to Kuwait witnessed consistent growth since 2003 and it reached US $782.45 in 200910,whiletheimportsfromKuwaitwasUS$8249.49inthesame year. The total bilateral trade between India and Kuwait grew spectacularly from $975.58 million in 200506 to 10391.24 in 2008 2009.(MinistryofCommerceandIndustry,2010) The current IndoKuwait trade is also facilitated by the Kuwait Fund for Arab Economic Development (KFAED) which provides economic aid to India on low interest rate since its establishment in 197576.Thefundhassuccessfullytriedtoimmuneitsdecisionsfrom political considerations. Kuwait has given aid to many projects in IndialiketheKalindihydroelectricproject,powerprojectsI,II,Kopli hydro electric project, Anpara thermal power projects and coal handling and transport, Kerala fisheries development projects, Thal Fertilizerprojectetc.(Chopra,2006,230)
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IndiaKuwaitBilateralTrade(inmillionUS$) Indianexports Indianimports Year TotalTrade toKuwait fromKuwait 200203 250.56 179.50 430.06 200304 319.09 142.48 461.57 200405 421.44 305.94 727.38 200506 513.73 461.85 975.58 200607 614.81 5,993.23 6,608.04 200708 681.54 7,704.25 8,385.79 200809 797.50 9593.74 10,391.24 200910 782.45 8,249.49 9,031.94
Source:MinistryofCommerceandIndustry,2010 Interestingly the UPA government has given utmost priority to boost the relationship with GCC countries and several high level visits had ensued between both the countries since 2004. India received several high level Kuwaiti ministerial delegations which includes the visits by Foreign Minister Sheikh Mohammed in August 2004, Minister of Communications, Ismael Khudhur Shatti, on June 28, 2006 and Engr. Falah Fahed Mohammad AlHajri, Minister of Commerce in January 2007. Correspondingly Indian Minister ofState for External Affairs E. Ahmed also led numerous delegations to Kuwait during the same period notably, on October 2006 for meetingswiththeKuwaitileadership,tocoChairthefirstmeetingof the KuwaitIndia Joint Ministerial Commission in November 2006 and in May 2008 on the demise of the Amir His Highness Sheikh Saad AlAbdullah AlSalem AlSabah to pay homage on behalf ofthe GovernmentofIndia. The historic visit of Sheikh Sabah AlAhmed AlJaber AlSabah, Amir of the State of Kuwait in June 2006 gave new impetus to the bilateral relationship between India and GCC in general and Kuwait in particular. Both countries signed a series of agreements to enhance the mutual cooperation. The main focus of the visit was to reinforce
91
trade and commerce. Three land mark agreements were also signed during the visit: Avoidance of Double Taxation Agreement for the Prevention of Fiscal Evasion with respect to Taxes on Income (DTAA); an Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs, Psychotropic Substances and Precursor Chemicals and Related Matters; and an Executive Program for the Cultural and Information Exchanges between India and Kuwait for theyears20062008.(ArabianBusiness.com,November4, 2008) The former Indian ambassador to Kuwait M. Ganapathi noted that The most important encouragement in terms of economic, trade and investment cooperation is the fact that we have an agreement for Mutual Promotion and Reciprocal Protection of Investments (BIPA) and also a DoubleTaxationAvoidanceAgreement(DTAA)betweenIndiaandKuwait. Thus, while there has been investment in marketable securities and investmentthroughthirdcountries,theBIPAandDTAAshouldprovidean opportunity and comfort for direct investments. (Embassy of India in Kuwait,Accessed2011) The visit of the Amir has elevated the bilateral relations to much higher levels and both nations have identified areasofcooperationin economic, cultural, political, commercial and other areas. India has agreed to contribute to the growth of science and technology, information technology and biotechnology sectors, health care, hospitality, pharmaceuticals, education, power sector in Kuwait. In 1992 during the visit of Indias External Aairs Minister Madhav Singh Solanki to Kuwait both countries agreed to set up an Indo Kuwait Joint Ministerial Commission on Economic and Technical Cooperation.(EmbassyofIndiainKuwait,Accessed2011)However no efforts were made from either side to formalize the functioning of theJointcommission.DuringthevisitoftheKuwaitiAmirtoIndiain 2006 both countries decided to regularize the Joint Commission for Economic and Commercial Cooperation. The first ever meeting of this Commission was held in Kuwait in November 2006. The Indian
92
delegationinthemeetingwasledbyE.Ahamed,MinisterofStatefor External Affairs and Bader Meshari AlHomeidhi, Finance Minister from the Kuwaiti side.The second meeting of the IndoKuwait Joint MinisterialCommissionwasheldinJuly2008,inNewDelhiandJMC decided to set up a Joint Working Group (JWG) on Hydrocarbons. (Embassy of India in Kuwait, Accessed 2011) In April 2009 the Vice President of India Hamid Ansari led a high level delegation to Kuwait to strengthen the bilateral trade and commerce between the twocountries.(Jha,2009) AccordingtotheIndianembassysourcestherewerenearly590000 Indians in 2009 that comprised of around 4050 per cent of Keralites (Personal interview of Ginu Oommen with Ambassador Malhotra on 15thJanuary2010intheembassyofIndia,Kuwait).Indiancommunity has a historical role in the socioeconomic development of Kuwait especially in the areas like health, education and IT. To safeguard the rights of expatriates a Memorandum of Understanding (MoU) on Labour, Employment and Manpower Development was signed with the Ministry of Labour, Kuwait in July 2006. (Pravasi Bharatiya, August2006) IndoKuwait relations too have witnessed spectacular change especially since 2006. Keeping aside the bitterness on certain issues, the mature leadership has navigated the relationship to new levels. Imports from Kuwait drastically multiplied since 200607 and so has the Kuwaiti investment in India. The long overdue demand of both business community to avoid double taxation was made possible only after a new approach of look west was undertaken in the foreignpolicyorientationofIndia. Oman IndiaOman relations date back to Indus Valley Civilization and Oman ports were the main centers of trade between Gujarat and Malabar coasts during the medieval times. In 1786 Tipu Sultan the
93
rulerofMysorehadsendahighleveldiplomaticdelegationtoOman. (Rahman, 2009) PostIndependence an Indian consulate was opened in Muscat in February 1955 and ve years later it was upgraded to a ConsulateGeneralandfinallybecameafulledgedEmbassyin1971. The present IndoOman relation draws its strength from the traditional relations between both the countries. Sultan Taimur, the grandfather of the current ruler had spent more than 30 years in Mumbai, India, till his death in 1965 and he was buried there. (Rahman, 2009) In the early days, the Indian community in Oman consisted of traders and financiers from Gujarat (Kutch) and Sindh, including the Khojas and the Hindu business community. The oldest Indian family traces its history in Oman over eight generations. Today, it is estimated that there are around500,000IndiansinOman, constituting the largest expatriate community in the country. A number ofPersons of Indian Origin (PIOs) have been granted Omani nationality, some of them being the recipients of high awards of the Omanigovernment. IndiaOman economic and commercial relations have gained sufficient momentum in the recent past and the trade has registered thehighestgrowthrateof66percentandamountedto$1.5billionin 2007 a rise from $900 million in 2006. (Valsan, 2006) India is keen to enhance the strategic partnership and to upgrade trade and investment in diverse areas, including, oil and gas, heavy engineering, chemicals and pharmaceuticals, IT, infrastructure, hydrocarbons, and petrochemicals. In 20022003, Indian exports to Omanwereofthevalueof$198.61million.Thevalueofimportsfrom Oman was $13.84 million. (Aneja, 2003) Prime Minister Manmohan Singh during his visit to Oman in November 2008 called upon captains of Omans industry and financial companies to invest surplus liquidity into key infrastructure sectors in India. He assured them of a hospitable climate for investment. He underlined that in this period of turmoil, I feel that the complementarities between our two
94
economies provide an opportunity for countercyclical strategies for growth inboththecountries.(Hussain,2008) The growing relationship is also reflected in several joint projects undertaken by the two countries. Since 2000, India has experienced a favorable trade position with Oman and bilateral trade is no longer confined to oil and gas. India ranks as the third largest source for imports into Oman. Major items of Indian exports include textiles and garments, machinery and equipment, electrical and electronic items, chemicals, iron and steel products in addition to traditional items like foodstuff, tea, coffee, spices, rice and meat products, fruits and vegetables, and seafood. In 2003, India and Oman had set up a joint fertilizer company worth $969 million at Qalat near Sur. Two Indian firms, Indian Farmers Fertiliser Cooperative (IFFCO) and Krishak Bharati Cooperative (KRIBHCO) have a 25 per cent stake each while the Oman Oil Company has a 50 per cent share in this joint venture OmanIndia Fertilizer Company (OMIFCO). The fertilizer unit is expected to produce 1.65 million tones of granulated urea and 250,000 tones of surplus ammonia annually to meet Indias growing fertilizer demand. (Vaidya, 2008) India will buy back the entire production of urea/ammonia for a ten year period. This project made India emerge as the largest destination of direct Omani exports and the nonoil bilateral trade has shown an impressive growth and ispoisedtocross$2billion.(Valsan,2004)Thebilateraltradebetween India and Oman has shown a tremendous leap from $288.28 million in 20042005 to $4532.82 million in 200910. (Ministry of Commerce andIndustry,2010) In December 2006 India signed a strategic Memorandum of Understanding on Defense Cooperation with Oman that included exchange of expertise in military training and information technology, utilization of military and educational courses and programs, exchange of observers attending military exercises and exchangeofformalvisits.(Lefebvre,2011)
95
Minister of State for External Affairs, E. Ahmed, visited Oman in November 2004 followed by the visit of External Aairs Minister K. Natwar Singh in December 2004. The visit also saw the signing of an ExtraditionTreaty,andthesigningofaMoUbetweentheStateAudit Institution of the Sultanate of Oman and the Comptroller and Auditor General of India, for cooperation in audit matters. India has helpedOmaninsettinguptheInformationSystemAuditFunctionin Omans Audit department on the pattern of Indian CAGs office. Several Indian ministers made official visits to Oman in short intervals keeping the relationship warm including Kamal Nath, Minister for Commerce and Industry in 2006, Vayalar Ravi, Minister of Overseas Indian aairs in March 2007 and Minister of Defence PranabMukherjeeinMarch2008. The traditional IndoOman relations have gained sudden momentum and have registered the highest growth rate of 66 per cent in 2007. The trade has diversied and the leadership has recognized the complementary nature of the two economiesasstated by the Indian Prime Minister in 2008. Ever since 2004 new areas of investments have been identified, joint projects undertaken and several MoUs signed. Long term understandings have been reached in certain sectors like supply of fertilizers. The look west policy has activatedthepoliticalanddiplomaticinteractionwhichisresponsible for creating a conducive environment for the overall growth of bilateraltradeandcommerce. Qatar IndiasrelationswithQatardatesbackto200yearsanditscreditgoes primarily to the Indian trading communities (Thattai Bhatias and Kutchi Bhatias and Luwatias) who traded in Oman and were also activeinQatar.(Jain,2007)InthepastMumbaiwasthemaintrading centre of Qatar and Indian rupee were in use in Qatar until 1960s. Currently Indias relationship with Qatar has grown significantly.
96
Qatar is the third largest investor of gas reserves and close ties with Qatar is equally important for India. The bilateral trade constitutes only a part of the potential for economic cooperation between India and Qatar. Indias export basket to Qatar is fairly diversified and includes consumer items, foodstuff and industrial equipments, readymade garments, jewellery, light engineering goods, steel pipes and consumer electronics, marble, gold and precious metals, bus tyres, beauty products, textiles and ceramics. The hydrocarbons sector has been a prime focus of India and India imports large volumes of ethylene, propylene, ammonia, urea and polyethylene from Qatar. During 2002, major items of import from Qatar were sulphur,mineralfuels,petroleumproducts,inorganicchemicals,urea and fertilizers. Moreover Liquefied Natural Gas (LNG) imports comprise a main concern for Indias bilateral economic relations with Qatar. Both countries had signed a MoU in January 1998 for further cooperation in the gas, oil and industrial sectors. The MoU envisage for the supply of 7.5 million metric tons of liqueed natural gas (LNG)peryearfor25yearsbyQatartoIndia.(KhaleejTimes,2005) Bilateral trade between India and Qatar stood at $5185.86 million in 20092010. Today, Qatar is the largest LNG supplier to India, and during Prime Minister Manmohan Singhs November 2008 visit, India expressed its wish to source an extra 2.5 million tones of LNG from this Persian Gulf state. (Hussain, 2008) The imports from Qatar have systematically increased over a period of time from $91.69 millionin200102to$4648.89millionin20092010.
IndiaQatarbilateralTrade(inmillionUS$) IndiasImports Indiaexportsto Total fromQatari Qatar 200102 91.69 49.00 140.69 200203 113.07 96.10 209.17 200304 187.05 128.44 315.49 200405 672.85 209.42 882.27
97
200506 200607 200708 200809 200910
901.62 2060.08 2455.75 3498.91 4648.89
259.34 331.53 538.73 674.37 536.97
1160.96 2391.61 2994.48 4173.28 1005.86
Source:MinistryofCommerceandIndustry,2010 A key agreement arrived at during the Indian Prime Ministers visittoQatarin2008wasondefenseandsecurity.(Dikshit,2008)The agreement covers maritime security, piracy, intelligence sharing on terrorism, money laundering, narcotics and transnational crimes. India and Qatar have signed landmark defense and security agreements paving the way for joint maritime security, sharing of intelligenceonthreatsposedbyterrorismandcooperationintackling transnational crimes. The defense agreement lays out a structure for jointmaritimesecurityandtrainingaswellasexchangeofvisits.This agreement assigns India a unique position in the region. It allows the Indian Navy to operate in the region and ensure the security of the sealanesthroughwhich15percentoftheworldssupertankerspass. During Manmohan Singhs visit, Indian Petroleum Minister Murali Deora requested the Qatari Deputy Prime Minister, Abdullah Bin Hamad AlAttiyah, to supply an additional 2.5 million tones of LNG under an agreement that was signed a decade earlier. (Hussain, 2008) India also expressed the wish to set up a gasfired fertilizer plantinQatartomeetitsureaneeds.Currently,Qatarsupplies25per cent of the total fertilizer consumed in India. Qatar, being a small country with limited human capital, needs an emerging big economy andmarket,likeIndia,foritsgas.Atthesametime,Indiaisalsokeen to take advantage of a reliable source of natural gas situated close to its own consuming centers. In 19992000 the trade turnover between both the countries was $245 million which reached US $1005.86 in 200910.
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In 2008 there were nearly 300,000 Indian immigrants in Qatar. (Indias Ministry of Overseas Indian Aairs, 2011) Keeping in view the large number of Indian expatriates, India and Qatar signed an additional agreement on 20th of November 2007 on manpower development that will open further employment opportunities for Indian expatriates. (Ministry of Overseas Indian Aairs, 2011) The Protocol also provides for the welfare of Indian workers in the unorganized sector. The MoU stipulates that the terms and conditions of employment shall be defined by a contract between the employee and employer and authenticated by Qatars Ministry of Manpower. The accord seeks to protect the interests of Indian expatriate workers in the Sultanate, especially housemaids and householdemployees. Bahrain India shares deep and historical interactions with Bahrain too since ancient times. In the past the pearl industry played a big role in cementing Indias relations with Bahrain. The pearls produced in the Persian Gulf coast were pierced, polished, and converted into jewellery in Mumbai. (Embassy of India in Bahrain, Accessed 2011) India continues to maintain good relations with Bahrain since its Independence in 1971, with highlevel visits and joint agreements. Many of Bahrains most prominent figures had close connections with India. The eminent Bahraini poet and constitutionalist Ebrahim AlArrayedh grew up in Bombay. (UNESCO, 2009) Political leadership has sought to enhance these long standing ties, with reciprocalvisitsandeconomiccooperation. India and Bahrain signed the first economic and technical cooperation agreement in April 1981. Bahrain is very keen to explore IndiasexpertiseinITandinMay2001theElectronicsandComputer Software Export Promotion Council (ESC) of India signed a memorandum of understanding (MoU) with Bahrains Economic
99
Development Board (EDB) the nodal agency for development ofthe IT sector in the country. The Fourth Meeting of the IndiaBahrain Joint Committee on Economic and Technical Cooperation (JCETC) was held in Bahrain on 1415 November, 2007. (Indias Ministry of External Aairs, 2008) Many Indian companies have deep business ventures in Bahrain which includes Titan watches, Onida televisions, Videocon, BPL, Godrej, Raymonds, and VIP etc. Bahrains main imports from India include machinery, electrical and electronic equipment, textiles, beverages and food products, base metals, chemicals and chemical products, plastic, rubber, ceramic products, cementandmineralproducts. India and Bahrain signed an extradition treaty in 2004 during the visit of the Prime Minister of Bahrain Shaikh Khalifa bin Salman Al Khalifa to India. The treaty that deals with concrete steps to combat terrorism and strengthens bilateral cooperation in control of crime. (Indias Ministry of External Aairs, 2007) Bahrain is the second Persian Gulf country after UAE with which India has signed the extraditiontreaty.BahrainsCrownPrinceShaikhSalmanbinHamad Al Khalifa visited India in March 2007 and rearmed his commitment to fight terrorism. Another agreement for Cultural Cooperation (20072010) and a Memorandum of Cooperation between Prasar Bharati and Bahrain Radio and TV Corporation were also signed. (Consulate General of Bahrain in Mumbai, Accessed on June 9, 2010) To strengthen mutual trade and commerce, Indian businessmenwouldbegivenvisaonarrivaltoBahrainforaperiodof two weeks in the first phase. (Embassy of India in Bahrain, Accessed 2011) Moreover Khalifa Al Dhahrani, speaker of Bahraini parliament ledadelegationofparliamentariansandbusinessleadersin2007.The volume of bilateral trade between India and Bahrain is relatively less when compared to other GCC countries. In the year 200910 the bilateral trade was mere US $753.07 million. (Ministry of Commerce andIndustry,2010)
100 InternationalPolitics
Summary IndiaGCC relations have come a long way and has diversified to accommodate new areas. The look West Policy of India had made tremendous impact in the IndiaGCC relations. It is quite evident from the data that in the field of bilateral trade there was substantial growth especially since 2004. New vistas have opened up the current trend of diversification and bold steps to promote deep cooperation in the field of trade and commerce. There still remain many other areas that need to be explored. Agriculture for example is an area where the needs of India and GCC are reciprocal. India with considerable agricultural land needs investment to make it more productive and remunerative. The bilateral trade between India and the GCC countries has shown a tremendous growth since 200304. The exportimport statistic shows that since 2005 Indias imports from GCC countries have been exceedingly greater than the exports. The GCC investors have started focusing on India as an investment destination. Strong economic growth on the back of service sector contribution has helped sustained economic growth. Governments thrust toward infrastructure development via publicprivate partnershipisfurtherbolsteringinvestment. TheUPAgovernmentslookwestPolicyhasgivenextraattention to consolidate, enhance and diversify the economic cooperation between India and the Arab region. Several confidence building measuresandseveralmeasurestofacilitateandboosttherelationship were taken at the policy level and implemented on the ground. However, the world economic crisis and the subsequent fluctuation intheworldeconomyhavehaditsimpactontheIndiaGCCbilateral trade as well. Indias fivemillionstrong workforce in the GCC and their contributions in the socioeconomic developments of the region have created a congenial atmosphere for people to people relationship that can lay a strong base for the much require strong politicalrelationship.Stepstosafeguardtheinterestandrightsofthis
IndiasLookWestPolicy... 101
communityhavealsobeentakenupatseverallevels.Thiscanfurther be strengthened by setting up cultural centers, exchange of academics,mediapersonsandintellectuals. The look west policy orientation led to significant mobility at the political and diplomatic levels. Several highlevel delegations from India visited each of the GCC countries and were reciprocated in equal terms from the other side. The political will was readily capitalized by the business communities that went fullon into direct investments,jointventuresandintonewarena. Both India and GCC states are prepared to reorient their policies andengagepoliticallyandstrategicallyinamorerigorousmanner.In the changing geopolitical context the GCC countries too have softened their stand on the diplomatic irritants like the issue of Kashmir. The new positive trends in the IndiaGCC relations are the manifestation of the altering perceptions of the political elites of the PersianGulftowardsIndiawhoareseeingitmorefavorably. Despite the complex situation, as the two regional powers of West Asia Saudi Arabia and Iran have undercurrent competitions, India has reciprocated maturely. India needs to play a more active but cautious role regionally and globally to emerge and portray as a trustworthy partner in international politics. India has managed to gather the support of two Persian Gulf countriesUnited Arab Emirates (UAE) and Omanin its bid for permanent membership of the extended UN Security Council. Saudi Arabia has also agreed to support Indias candidature for a nonpermanent seat of the UN Security Council and has sought Indias support for its own candidature for the year 2014/15. By strengthening cordial relationship with the GCC, India will once again consolidate its presence in the West Asian region and reinforce confidence in the Muslimworld.
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International Politics, Vol. 3, No.

VI, Summer & Autumn 2010

200506 200607 200708 200809 200910

901.62 2060.08 2455.75 3498.91 4648.89

259.34 331.53 538.73 674.37 536.97

1160.96 2391.61 2994.48 4173.28 1005.86

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