Explained : Modi’s visit to West Asia, Why it matter for India

India and West Asia : PM Modi is in West Asia this week. He will inaugurate a Hindu Temple in UAE. Later he will visit Qatar as well. Qatar has just released Indian navy officers arrested for allegedly spying in the country. For last 10 years or so, Modi government has been very proactive in West Asia. Modi has a took forward the Manmohan government’s policy of ‘Look West’  to ‘Act West’. Let’s find out why West Asia matters for India.

Who are the members for GCC  

The Gulf Cooperation Council (GCC) was established by an agreement concluded on 25 May 1981 in Riyadh, Saudi Arabia. The agreement was among Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE in view of their special relations, geographic proximity, similar political systems based on Islamic beliefs, joint destiny, and common objectives. 

 Why is West Asia So Important for India? 

a)Energy Security  

Nearly 30 % of  India’s oil sourced from Gulf Cooperation Council (GCC) i.e Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE. In addition to that,  90 % of natural gas requirements sourced  from Gulf countries mainly from Qatar. 

B) Indian Diaspora in West Asia 

Out of India’s 1.34 crore Non-Resident Indians, more than 66 % lives in the Gulf countries (UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain). As of year 2022, 88.8 lakh overseas Indians live in six Gulf nations. 

UAE have highest number for NRIs (34.1 lakh) followed by Saudi Arabia( 25.9 lakh), Kuwait (10.2 lakh), Qatar (7.4 lakh),  Oman (7.7 lakh) and Bharin(3.2 lakh) respectively.

C) Remittances : 

In 2022, India received $90bn in remittances. India receives $35 billion in remittances from 9 million Indian nationals in gulf countries. UAE as second-biggest source of remittance after United States. Remittance is significant source of Forex.

D) Trade and Investment: 

India has one-fifth (20 %) of bilateral trade with Gulf countries. Along with the countries of the West Asian and North African region and GCC  is India’s largest trading partner. India has 220 billion $ trade with Gulf region.

 Source: Ministry of Commerce, India 

India’s Policy in West Asia  

In 2005, Prime Minister Manmohan Singh announced in a “Look West” policy. It has specific focus on West Asia, including Saudi Arabia, the UAE, Oman, Kuwait and Bahrain. Policy later leads to free trade agreement (FTA)  launched of free trade negotiations between India and the Gulf Cooperation Council (GCC). 

In the months that followed, the Indian Navy launched its own “Look West Policy” of increased maritime engagement of the Gulf states, recalling the longstanding maritime links that the subcontinent had with the Gulf. 

The GCC’s Look East Policy 

India’s Look West Policy has been complemented by the GCC member states’ “Look East” policy, with a focus on India and China, and other countries to their East. 

New Developments between India and Gulf Nations 

FTA:  

Two years ago, in March 2022, India and UAE has signed a comprehensive economic partnership agreement (CEPA). Later after a gap of 14 years, India revived FTA talks with the GCC in Nov, 2022. India and GCC are likely to sign CEPA on the same lines. In 2023, the announcement of the India-Middle East-Europe Economic Corridor (IMEC) during the G20 summit in New Delhi including Saudi Arabia, United Arab Emirates, Jordan, Israel, Greece, Italy, Spain, and other members of the EU underline the significant of the proposed corridor.  IMEC and India-GCC FTA are interlinked and will contribute to the success of each other.