Modi looks west as strategic scenario changes Gulf region

Following a period in which his main focus was forging stronger ties with India’s south and eastern neighbours, the Indian PM is now setting his sights beyond the country’s western borders. G Parthasarathy reports.

During his first year in office, Prime Minister Narendra Modi has devoted considerable attention to strengthening and giving new impetus to relations with India’s South Asian neighbours. He has also actively interacted bilaterally and regionally with countries in India’s eastern neighbourhood, ranging from Myanmar and Singapore to China, Japan, Australia and South Korea.

India’s engagement with its eastern neighbourhood, extending beyond the Straits of Malacca to the Pacific Ocean, now has distinct economic and strategic dimensions. These moves have been welcomed by ASEAN members located across the Indian Ocean, including Thailand and Myanmar, as well as countries on the shores of the Pacific such as Vietnam, Japan, South Korea and the Philippines.

Having set the contours of an ‘Act East’ policy over the past year, there are indications that the Modi government realises it cannot afford to ignore developments beyond its western borders—namely, in Pakistan and Afghanistan. The initial effort was to insulate India’s relations with Israel from the traditional ‘compulsions of coalition politics’, which allowed domestic lobbies to undermine the India-Israel relationship. This has been accompanied by a growing awareness of the need to simultaneously move purposefully in strengthening ties with the Islamic world, primarily in the Persian Gulf.

While supporting Israel’s desire to live within secure and recognised frontiers, India cannot overlook the importance of reiterating its support for, and commitment to, the establishment of a viable Palestinian state,

living at peace with Israel. It is significant that both President Pranab Mukherjee and External Affairs Minister Sushma Swaraj visited Ramallah and met Palestinian President Mahmud Abbas during visits to Israel.


PROTECTIVE MEASURES: The US Fifth Feet, based in Bahrain
PROTECTIVE MEASURES: The US Fifth Feet, based in Bahrain

There is now acknowledgement in India and its Arab Gulf Arab neighbours—Saudi Arabia, Bahrain, Kuwait, Oman, the UAE and Qatar—that in the emerging global scenario, they have to strengthen and expand cooperation. The reasons for India to expand its interaction with these countries are self-evident. An estimated 7 million Indians live in these six countries. They remit an estimated $50 billion annually to India and are primarily responsible for the comfortable balance of payments position and rising foreign exchange reserves that India enjoys. India gets 70 per cent of its oil imports from the Persian Gulf region, primarily from these six countries and Iraq. When India was unable to import oil from Iran because of international sanctions, it was Saudi Arabia that stepped in to fill the gap. Moreover, Iraq is now emerging as a major supplier of oil to India.

The Arab Gulf States, in turn, now face a serious economic crisis, as oil prices have fallen to around $30 per barrel. Oil revenues have been drastically reduced and their foreign exchange reserves are falling. Saudi Arabia is now actively involved in the civil war in Yemen, which has sectarian Shia-Sunni dimensions.

While fellow Gulf Arab states, with the exception of Oman, have backed the Saudi military effort, there appears to be no end in sight to the civil war in Yemen. But other Islamic States like Pakistan and Egypt, which were expected to actively assist the Saudis, have held back. At the same time, Saudi Arabia has been heavily funding the effort to overthrow the Bashar al-Assad regime in Syria. The ensuing civil war has led to an exodus of 11 million Syrians from their homes, threatening regional peace and security. ISIL, which gathered strength in Syria, is now threatening to undermine security across the Islamic world, including in Saudi Arabia.

The real setback to Saudi influence in the region, however, now comes from a drastic change in American policies following rapid growth of oil production in the US,

which is now set to become a significant exporter of oil and gas, no longer dependent on the Arab world for its oil requirements. Saudi Arabia and its Gulf Arab partners have long been dependent on the US for their security. The US Fifth Feet is based in Bahrain and the American Central Command has its headquarters in Qatar. These American forces have served as a deterrent to action by Iran or any other country against Saudi Arabia and its partners. But, following the American-led end to economic sanctions on Iran, the Saudis can no longer take American support for granted. President Obama has made it clear that he is not happy with the Saudi intervention in Yemen and has called on Saudi Arabia to work together with Iran to defuse tensions. At the same time, the Saudis cannot be happy with moves by Russia, China and the European Union to expand economic and investment ties with Iran.

COMMOM GROUND: Modi (l) met Iranian President Hassan Rouhani at the SCS in UFA last July
COMMOM GROUND: Modi (l) met Iranian President Hassan Rouhani at the SCS in UFA last July

It was in the light of these emerging developments that Prime Minster Modi was given an unprecedentedly warm and rousing reception when he visited the UAE in 2015. The UAE is India’s second largest export market after the US. Mr Modi is now scheduled to visit Saudi Arabia, which still has the largest reserves of oil in the world. Given the growing strains in its relations with the US and its continuing rivalry with Iran—which has both civilisational and sectarian dimensions—Saudi Arabia will view India not only as a stable and growing market for its oil, but also as a potential partner in security cooperation. While India cannot and should not get involved in Shia-Sunni and Persian-Arab rivalries, it will have to seek every opportunity to promote two-way investment ties in the petroleum and energy sectors. India is also set for significant naval expansion in coming years, with its navy on course to have a powerful fleet of nuclear ballistic missile and attack submarines, together with at least two aircraft carriers. This should set the stage for expanding naval cooperation with Saudi Arabia and its Gulf Arab partners in both the Persian Gulf and the Gulf of Aden, even as American interests in the region progressively change and decline.

Prime Minister Modi met Iranian President Hassan Rouhani at the Shanghai Cooperation Summit in UFA last July. Iran and India share a common interest in preventing the spread of radical Wahhabi Islamist forces in Afghanistan and have cooperated extensively in the past to deal with Taliban extremism there. India has facilitated connectivity between Afghanistan and Iran by building the strategic Delaram-Zaranj Highway in Afghanistan, and has also agreed to invest in the development of the Chabahar Port in Iran, which will serve as a hub for transit to Afghanistan and Central Asia. This year could well see progress in strengthening economic cooperation between India and Iran, and also joint efforts by the two countries to ensure that Afghanistan does not again become the regional epicentre for terrorism and religious extremism.

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