Gulf Integral Part of India’s Extended Neighbourhood

General Studies Paper -2

Context: The Gulf region has become an increasingly important strategic partner of India and an integral part of its ‘extended neighbourhood’ as per the Italian Institute for International Political Studies (ISPI).

Gulf Region

• The Gulf Region typically refers to the countries surrounding the Persian Gulf in the Middle East.
• It includes nations like Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates (UAE).
• This region is known for its vast oil reserves, which have significantly influenced global economics and politics.

Gulf Cooperation Council (GCC)

• It is a political and economic alliance of six Middle Eastern countries—Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.
• It was established in 1981.
• It aims to achieve unity among its members based on their common objectives and their similar political and cultural identities, which are rooted in Arab and Islamic cultures.
• Presidency of the council rotates annually.

Importance of Gulf Region for India

• Energy Security: The Gulf countries are major suppliers of crude oil and natural gas to India.
  • India is highly dependent on Gulf oil for its energy needs, making the region crucial for India’s energy security.
• Remittance: Remittances from Indian expatriates working in the Gulf contribute significantly to India’s economy.
  • Remittance is the non-commercial transfer of money by an individual to his/her home country or family.
• Security Cooperation: The Gulf region is strategically important for India’s security interests, given its location and influence in the Arabian Sea and Indian Ocean regions.

India’s Relations with GCC

• Strategic Partnership: GCC is a major trade and investment partner for India. While India has close economic and political ties with all countries, the strategic partnership exists with only Saudi Arabia, UAE, and Oman.
• Energy Security: GCC contributes to 35% of India’s oil imports and 70% of gas imports. India is executing the second phase of its Strategic Petroleum Reserve (SPR). Several GCC countries have expressed their interest in the same.
• Trade and Investment: GCC countries contribute to about one-sixth of India’s total trade.
  • The GCC is India’s largest regional bloc trading partner. Trade with the GCC comprised 15.8 percent of India’s total trade in FY2022-23, compared to 11.6 percent of total trade with the European Union.
  • India also has a significant trade deficit with the GCC which is driven by India’s dependence on GCC countries for oil and gas imports.
• Defence Relations: India’s defense engagements with these countries are gaining significant momentum.
  • From mere training of security personnel in various military institutes, they have extended ties to other areas, including intelligence sharing, counterterrorism, artificial intelligence, electronic warfare, and cybersecurity.

Conclusion

• India will likely become an increased ‘strategic partner’ for the Gulf states.

Managing mutual challenges, while focusing on growing political, economic and security interests, will be the key to enabling India-Gulf relations to strengthen and become more ambitious.