Importance of India’s relations with Gulf countries, writes Ajit Ranade

The ratio of Indians in other GCC countries is quite high. They are a great source of remittance income for the Indian economy. | Photo: PTI

The Organization of Islamic Cooperation (OIC) secretariat has “condemned and denounced” statements made by two spokespersons for India’s ruling party, the Bharatiya Janata Party, for their comments on the Prophet Muhammad. The OIC statement also refers to the wave of hatred and defamation of Islam in India. The OIC, founded in 1969, has 57 member countries, all of which have Muslim majority populations. India, which has more than 200 million Muslims, is not a member and does not even have observer status. India has the second largest Muslim population of any country, only next to Indonesia. In response to the OIC statement, the Indian government rejected it and said that the opinions of two people did not reflect the views of the government or even the people of India. Along with the OIC joint statement, many OIC members summoned the Indian ambassadors to their respective countries and expressed their disappointment and condemnation of the statements about the Prophet. The embassies responded and defended the government’s position.

Two countries that have summoned Indian envoys are Qatar and Kuwait. Both are also part of the six-member Gulf Coordination Council (GCC). It should be noted that two other members of the GCC, Bahrain and Oman, publicly appreciated the measures taken by the government and the BJP against the two spokespersons. Their actions at least show that not all members of the GCC or even the OIC are so vehement or determined to corner India diplomatically. There is no doubt that this incident embarrassed the government, and that is why severe action was taken against the two spokespersons. It is not only the OIC statement but even the observations and comments from other countries including America that have put India on the back burner.

In the wake of the international furor, there is the wave of protests, violence and police actions, sometimes quite brutal inside the country, which are a source of major headaches and embarrassment. The two (or perhaps three) camps are divided and entrenched firmly on issues of free speech, selective outrage, blasphemy and majoritarian politics. The space for dialogue and nuance is rapidly shrinking. This does not bode well for social unity, harmony and cohesion, even if these words today sound hopelessly utopian. Democracy is nothing but a continuous conversation and negotiation of power and its distribution. But this conversation must respect certain standards, written and unwritten, and the negotiation must always remain civilized, non-violent, with respect for constitutionalism. One or the other belligerent party can criticize the other for lowering the level of the discourse and making the “space for negotiation” ugly. Whichever group is to blame for “you did it first”, the result for society is that it makes everyone worse off.

The diplomatic outcry from the OIC and the GCC has another implication that India needs to assess. The question of morality in geopolitics is problematic and cannot be resolved. But the question of India’s self-interest is very relevant. It is an instrumental view of observing diplomatic subtleties. India cannot afford to isolate itself diplomatically as this will have real economic implications. At a time when India must rise to the challenge of China and reduce its dependence on China, it is imperative for India to keep its coalition options open. This is for both geo-economic and geopolitical reasons.

Moreover, the link with the GCC countries has multiple dimensions. The first is that of commercial dependence. India’s trade with GCC countries has nearly doubled in just one year since 2020-21, and currently stands at $155 billion. The share of Indian exports going to the GCC is now over 10% and needs to increase. India’s growth requires access to global export markets, and the GCC is an important destination for all sectors, ranging from food to agro-industrial products to labor-intensive products. such as textiles and leather, engineered products, chemicals and pharmaceuticals. India’s imports from the GCC are also crucial and have increased by 86% in one year. Imports include the critical energy component. Oil imports from West Asia are needed not only to meet India’s consumption needs, but also as feedstock for India’s huge diesel and gasoline exports, carried out by private sector companies like Reliance and Essar. India’s petroleum product exports constitute almost a fifth of all dollar manufacturing exports.

The GCC countries are also an important destination for exports of software and other services. In May this year, India signed a free trade agreement with the GCC member UAE and the ambition is to increase trade with the UAE alone to $100 billion in the next few months. years. Thus, a close link between trade and commerce calls for the removal of any diplomatic clumsiness. The second dimension with regard to GCC is the presence of the Indian diaspora. In the United Arab Emirates alone, the population of Indian origin is almost 40%, and a significant proportion of them are Indian Muslims. The ratio of Indians in other GCC countries is also quite high. They are a great source of remittance income for the Indian economy. India is the world’s largest recipient of inbound remittances, with nearly $90 billion. This income can easily reach 200 billion dollars, if the links with the diaspora are maintained and strengthened.

In some ways, inward remittances represent India’s “exports” of labour, its most abundant resource. This export is not that of software “brains”, but that of blue collar workers. Indeed, the remittance economy can easily equal the revenue from software exports. The GCC countries host a large part of the manual labor, which goes to people of Indian origin. Beyond these two dimensions of trade and a diasporic link, a third factor could be a civilizational link. Countries like the United Arab Emirates and Oman can be India’s natural allies due to a much older bond between our peoples. This link and alliance also holds geostrategic benefits for India as we explore land links with Central Asia and energy pipeline opportunities.

Thus, for these instrumental if not more fundamental reasons alone, India needs strong and friendly relations, be they diplomatic, economic, social or cultural with the GCC countries. And some of these arguments also apply to relations with OIC members.

(Dr. Ajit Ranade is a renowned economist)

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