Persian Gulf 2019

Prime Minister Narendra Modi’s engagements with the Persian Gulf and the broader Middle East took exciting turns in the light of regional concerns and upheavals, especially over Iran and Saudi Arabia. If the former demanded a nuanced fine-tuning, the latter witnessed a firmer political message. The year 2018 saw a renewal of importance that India attaches to the UAE, its traditional friendship with the Sultanate of Oman, dehyphenation of Israel and Palestine and recognition of the crucial role that the Hashemite Kingdom of Jordan plays in the Israeli-Palestinian dynamics. The year witnessed the highest number of political visits and contacts with the region since Modi became prime minister in May 2014. He visited Palestine, Jordan, Oman and the UAE and hosted leaders of Israel, Iran and Jordan and continued his G20 outreach with the Kingdom of Saudi Arabia. These visits and exchanges continue to highlight the ascendance of the Persian Gulf in India’s strategic calculations. At the same time, 2018 saw India adapting to challenges over which New Delhi had little control or influence. In the political realm, Iran continues to be a significant concern for India.

India has strong bilateral relations with Bahrain, and it was among the first to respond to India’s outreach towards the region since the early 1990s. Though economic powerhouses like Dubai and Doha overshadow Manama, the island nation remains vital in India’s engagements with the region. This was indicated by growing political contacts between the two and the visit of Congress president Rahul Gandhi to Bahrain in January 2018.

The US factor in the Indo-Iranian relations has re-emerged as the most severe foreign policy challenge after President Donald Trump announced the American withdrawal from the nuclear deal in May 2018. India seeks and maintains friendly ties with Iran both for its energy security interests and as a partner country to develop connectivity links with Afghanistan and Central Asia. The return and intensification of unilateral US economic sanctions can adversely impact the development of the Chabahar Port in southern Iran and associated infrastructure developments and limit India’s oil import options.

Despite the political turmoil, Iraq’s foreign trade, especially its energy sector, has shown signs of revival and contributed to growth in exports. India has emerged as one of the primary destinations for the Iraqi oil and during the year Iraq became one of the top suppliers of crude oil to India. These are encouraging signs, but the political situation is far from stable as the country must find solutions to a myriad of problems, and the foremost among them is the accommodation of the marginalized Sunni and the restive Kurdish population. Baghdad will also have to deal with challenges posed by the remnants of the ISIS and evolve a robust politico-military response.

The visit of External Affairs Minister Sushma Swaraj in October 2018 was only the second high level political exchange between the two countries after the November 2013 visit of Kuwaiti Prime Minister Jaber al-Mubarak al-Sabah. Though commercial transactions have continued, the lack of political engagements, especially since 2014, underlines the lower priority accorded to Kuwait. At the same time, it also reflects the lack of initiatives from the Kuwaiti side to woo India at a time when other Gulf monarchies are courting New Delhi through political meetings and economic opportunities.

The Sultanate of Oman has been a traditional friend of India and the strong bilateral relations encompass trade, commerce and energy ties and defence cooperation. Historical ties due to maritime trade and cultural links have formed the basis of the interest convergence. Despite being a smaller economy in the Persian Gulf region, New Delhi recognizes Muscat as an important actor, whose role and influence are critical for minimizing tensions and for maintaining regional stability. The Omani ability to effectively reform its economy and continue to maintain autonomy in foreign policy choices would determine and shape the contours of the Indo-Omani relations. The renewal of political engagement in the form of the prime-ministerial visit in early 2018 was a recognition of the Sultanate’s regional primacy.

Qatar has emerged as one of the critical players in the fast-changing geopolitical situation in the Persian Gulf and the broader Middle East. Qatar has been able to handle the Saudi-led boycott and blockade with the help of financial prowess, political network and diplomatic overtures to countries like Iran and Turkey, but the crisis had damaged the Arab Gulf unity. Except for an immediate shock and uncertainty, the crisis did not affect India significantly as it managed to weather the storm, but it poses a challenge to the core of its Gulf policy. Until the resolution of the crisis, it would be trying to balance the Iran-Saudi divide and the GCC crisis.

The Kingdom of Saudi Arabia is emerging as an important strategic partner of India in the Persian Gulf. Its significance rests in its vast oil reserves and exports and its global influence as a leading Islamic country that houses the two holy mosques revered by Muslims all over and home to nearly three million Indians who live and work there. With growing political contacts and business ties, Saudi Arabia has emerged as a vital pillar of New Delhi’s outreach to the Gulf. Despite increasing western criticisms of Riyadh’s foreign policy choices and concerns over human rights records under the leadership of King Salman and Crown Prince Mohammed bin Salman (MbS), India has chosen to elevate and intensify its ties with the Kingdom. This manifested in some interesting bilateral developments, including a multifold increase in a two-way flow of investments, growing security and defence ties and a better appreciation of each other’s security and foreign policy interests. Several developments in 2018 underline the burgeoning ties, including India’s participation in Janadriyah Festival, the national cultural and heritage celebrations organized by the Saudi government as the honoured guest and Prime Minister Narendra Modi’s meeting with MbS during the G20 summit.

The United Arab Emirates (UAE) has emerged as the centre of India’s new approach towards the Persian Gulf ever since Narendra Modi became prime minister. Trade ties and diaspora population play an important role in India prioritizing the Emirate; there were considerable political contacts and understandings between the two leaderships during the past five years and this has contributed to the warmth in their relations. Prime Minister Modi undertook his second visit to the UAE in February 2018, thereby making it the fourth high-level bilateral visit in as many years. Both the countries are expected to build on the current thaw and explore new areas of cooperation such as space and defence.

India has been maintaining strong relations with all members of the Gulf Cooperation Council (GCC); it has been facing stress and diplomatic dilemma due to the internal crisis within the organization over Qatar, which came into the open in June 2017. The decision of Saudi Arabia, the UAE and Bahrain to boycott Qatar over foreign policy differences has impeded India’s ability to forge and strengthen institutional cooperation with the GCC. Qatari insistence of pursuing an independent and parallel policy on a host of regional issues, especially over Iran, Muslim Brotherhood and domestic upheavals in some Arab countries, has come into conflict with positions held by Riyadh. Though India maintains friendly relations with all the members of the regional group, an early and amicable resolution of the crisis is of paramount importance to India. While it has strong business and trade ties with all countries, during the past five years, there has been noticeable Indian proximity with the UAE and Saudi Arabia.

The chapter provides specific policy recommendations for India’s relations with the region.