India and the Gulf Region: A Growing Strategic Partnership

Dr Prasanta Kumar Pradhan - Research Fellow and Coordinator, West Asia Centre, MP-IDSA

Engagement with West Asia is one of the prominent success stories of India’s foreign policy under Prime Minister Modi. While maintaining momentum in the traditionally dominant spheres such as trade and energy, India has found new and emerging areas of engagement with the Gulf region. Besides, India’s policy of non-interference in domestic and regional politics has been appreciated by the regional leaders.

Introduction

India's relationship with the Gulf region is robust and multi-faceted, spanning political, economic and strategic dimensions. The Gulf region is regarded by India as its 'extended neighborhood' and a vital economic hinterland. Over the years, strong political, economic, security and strategic ties have been cultivated between India and the Gulf States. Under Prime Minister Narendra Modi's leadership, India's engagement with the Gulf countries has witnessed a notable upsurge. Adopting a proactive and pragmatic approach, Modi has intensified interactions with Gulf leaders across various domains. His frequent visits to the region and constructive dialogues with the leadership have yielded tangible outcomes, transcending traditional areas of cooperation. Prime Minister Modi's policy emphasizes forging stronger strategic partnerships, reflecting a forward-looking agenda for the India-Gulf relations. India’s deepening engagement with the Gulf has also implications for India’s relationship with the larger West Asian region and the Arab-Islamic world.

India has adopted the 'Think West' policy to prioritise its engagement with the West Asian region. India has concentrated on further strengthening the existing areas of collaboration, including bilateral trade, energy cooperation, and diaspora relations; and has sought to tap into the unexplored potential in sectors such as defense, security, food security, renewable energy, climate change, connectivity, science and technology.

The Trade Relationship

Trade and energy cooperation have been two traditionally dominant areas of cooperation between India and the Gulf region. Bilateral trade and commerce are increasing significantly, and currently, the UAE and Saudi Arabia rank among India's top trading partners with bilateral trade of US$ 84.4 billion and US$ 52.7 billion respectively.¹ This underscores the depth of India’s economic engagement with the region.

India is negotiating a Free Trade Agreement (FTA) with the GCC, the success of which will further enhance bilateral trade and business between the two. At the bilateral level, India signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE in 2022. The total FDI inflow from the Gulf region in 2014 was US$ 326.48 million, which reached to US$ 6.99 billion in 2020.²

The Energy Relationship

India is heavily dependent on the Gulf region for its energy supply. The region supplies around two-thirds of India’s energy requirements. While Iraq, Saudi Arabia and the UAE remain the important sources of crude oil, Qatar is the major source of LNG. The Gulf countries also play a crucial role in India’s Strategic Petroleum Reserve (SPR). Moving beyond the buyer-seller relationship, India has engaged in building strategic partnerships and investments in the energy sector in the Gulf. Indian companies are involved in oil exploration, production as well as in pipeline projects in the region.³ Thus, in the field of energy cooperation, India is building strategic partnerships moving beyond the traditional buyer-seller relationship.

In recent years, India’s relationship with the Gulf countries have started moving beyond these two traditional domains of interaction. A notable feature of India’s engagement with the Gulf region is the growing engagement on defense and security issues. Collaborative endeavors such as joint military exercises and training initiatives have played a key role in the military-to-military interactions between the two. While historically the Indian Navy has been at the forefront of the military-to-military interactions with its counterparts in Gulf countries, recent years have seen armies, air forces and coast guards actively participating in joint exercises and training activities.

Both sides have acknowledged the necessity of tackling transnational security challenges such as terrorism, extremism, and maritime piracy. Increased intelligence sharing and information exchange have further bolstered joint endeavors to effectively address these threats. In the recent past, the deportation of terrorists from Saudi Arabia and the UAE to India is a reflection of the success of security cooperation between India and the Gulf region.⁴

New and Emerging Areas

India’s engagement with the Gulf region in the new and emerging areas is also growing quickly. Cooperation on renewable energy such as green hydrogen, wind and solar energy is emerging as an important arena of cooperation. Besides, food security, agriculture, technology and transport corridors are emerging areas of cooperation with long-term prospects being discussed between the two. The I2U2 minilateral grouping including India, Israel, the UAE and the US also focuses on these issues. India’s invitation to two Gulf States – Oman and the UAE – as the guest countries to participate in the G20 meetings during India’s presidency is also reflective of the growing convergence on these issues. 

The India–Middle East–Europe Economic Corridor (IMEC) project signed in September 2023, during the G20 leadership summit in Delhi, is a landmark initiative that will not only provide impetus to the India-Gulf relationship but also boost trade and connectivity with Europe as well. IMEC will connect India to West Asia and Europe through maritime, road and rail networks. 

The India-Gulf cooperation during the Covid-19 pandemic has further enhanced their level of trust. India sent medicines, medical equipment and health professionals to some of the Gulf countries. They also reciprocated by sending liquid oxygen to India when India was reeling under the delta variant in 2022. India also received cooperation from the Gulf countries when India began its largest repatriation exercise, known as the Vande Bharat Mission, to bring its nationals back who were struck abroad during the pandemic.

Modi’s pragmatic engagement has resulted in building strategic partnerships and opening new fronts of engagement with the Gulf States. This has also been reciprocated by the Gulf rulers. A remarkable success of Modi’s foreign policy towards the Gulf region is the change in the perception of the Gulf leaders of India as an emerging economy, a stable democracy and a nation capable of exerting significant influence on the global stage.

Prime Minister Narendra Modi with the Saudi business leaders at Saudi Chambers of Commerce in Riyadh, 2016 | Prime Minister’s Office

The initiatives undertaken by India have evoked positive responses from the Gulf countries, who have also shown their eagerness to participate in various collaborative ventures. Gulf leaders are increasingly recognizing the advantages of fostering partnerships with India across both traditional and emerging sectors. India's policy of non-interference in regional and internal affairs, combined with its focus on mutually beneficial cooperation, resonates well with Gulf leaders, making India's approach highly attractive to them. This has been evidenced by the frequency of high-level visits from the leaders of the Gulf region to India in recent years.

Conclusion

Engagement with West Asia is one of the prominent success stories of India’s foreign policy under Prime Minister Modi. While maintaining momentum in the traditionally dominant spheres such as trade and energy, India has found new and emerging areas of engagement with the Gulf region. Besides, India’s policy of non-interference in domestic and regional politics has been appreciated by the regional leaders. India has successfully navigated the turbulent regional geopolitics in the West Asian region has engaged with all the major regional powers including Iran, Israel and the Gulf Arabs. India’s success in its engagement with the Gulf has resonated well in the larger neighborhood and the Arab-Islamic world. The I2U2 and the IMEC, where India engages with the Gulf countries as well as Israel, Jordan the US and European countries are, to a large extent, the result of the growing India-Gulf strategic partnership.

(Exclusive to NatStrat)

Endnotes:

1. Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India.
2. Ibid.
3. Indian Oil, BPCL arm bag entire stake in Abu Dhabi block”, Hindu Business Line, 25 March 2019
4. Terror case accused deported from Saudi arrested from airport”, Times of India, 22 September 2020