Let multi-alignments, rather than a singular focus, be the basis of its policy recalibration.
India must remain nimble, constantly ready to respond to the escalating security concerns in the Middle East. However, this agility should not entail impulsive shifts in foreign policy or inconsistencies with its long-term objectives. The calibrated shift must consider the emergence of multiple regional powers, each supported by a cohort of allies from both within and outside the region. The emerging multipolar situation, with more than one global or regional power calling the shots and, at times, punching above its weight, will not, however, be without its own set of peculiarities and imponderables.
With Iran, Saudi Arabia, and Israel emerging as the new regional powers, the Western bloc, currently led by the US, will need to reassess its allies and adversaries. This re-evaluation will necessitate acknowledging both formal and less recognized entities, including armed local groups in the countries of West Asia. For a time, the West, particularly the US, may struggle with the realization that it no longer holds undisputed military and economic influence in the Middle East. The Gulf Co-operation Council (GCC) member-nations such as the United Arab Emirates (UAE), Qatar, and Oman, besides Egypt, and the Palestinian National Authority are other critical players with whom India’s ties have the potential of being strengthened. Each of these countries, individually as well as along with their neighbours, is capable of significantly influencing the regional dynamics.
India’s relationship with each of these eight countries, starting with Israel, the Palestinian National Authority, Iran, and Saudi Arabia is discussed in this piece, with the remainder to be covered in the next. The impact of the duality in India’s policy viz. strengthening ties with both the Arab world and Israel—will be a subject in both parts of this analysis. It is also important to explore issues critical to India, such as energy security, the large Indian diaspora in West Asia, the significant remittances they send back to their families in India, and the growing importance of Indian commercial interests in certain Middle Eastern countries.
ISRAEL
After a rather frosty relationship in the initial years following its creation in 1948, with India totally supporting the Arab nations and the Palestinians, Prime Minister Narasimha Rao in 1992 took the significant step of formally establishing diplomatic relations with Israel. Since then, India has increasingly warmed up to Israel in both economic and security matters. Today, it is India’s second-largest supplier of arms and technology, and there is a noticeable bonhomie in their relationship. This perhaps influenced India’s initial stance in siding with Israel in the early days of the ongoing conflict, following Hamas’ firing of hundreds of missiles from Gaza and taking 250 Israeli civilians as hostages.
Finding the subsequent Israeli retaliation disproportionately severe, and with the world community—including its Western allies—calling for restraint in attacks on civilian settlements, India has adopted a more nuanced and balanced approach to its support. Since then, while condemning Hamas for its indiscriminate initial attacks on Israeli territory, India has reasserted its historical support for the two-state solution regarding Palestine and supported the UN and other efforts to achieve both an interim and a lasting ceasefire, aiming to bring the warring sides to the negotiation table. India has also increased its naval operations against the Houthis and others engaging in acts of piracy, without joining the American and British military actions against the Houthis in the Red Sea. Such a calculated response must remain the hallmark of its policy, lest the decades of neutrality and careful balancing turn into wasted effort.
For India, Israel is not only a major supplier of sophisticated military hardware and systems but also an important source of assistance in agricultural technology, medical start-ups, and as an investor in Indian real estate. Indian tech companies find Israel’s high-tech economy and culture of innovation suitable for investments. During Prime Minister Narendra Modi’s visit in July 2017, agreements were signed to enhance collaboration in science, agriculture, defence, and to set up a $40 million technology innovation fund. There is now extensive co-operation in counterterrorism, intelligence sharing, homeland, and cyber security. This is happening at a time when Israel also maintains a close economic and defence relationship with China, which, according to Netanyahu, is mainly interested in its technology. Fortunately, in the overall favourable milieu of rapprochement with Israel building up among the Middle East nations, augmenting bilateral relations between Israel and India is no longer an issue of major concern. However, as India proceeds, it must invariably remain cognizant of not wavering from the path of extending political support to the cause of Palestine. Alongside, India needs to continue its growing efforts at building up bilateral relations with most of the Arab nations.
No doubt, Russia has now become India’s favoured supplier of crude oil. Nonetheless, India’s dependence on the Middle East for its huge and growing need for hydrocarbons is expected to remain significant in the decades ahead. The transition of the Indian energy sector to renewables and electric mobility is anticipated to be gradual. Much of India’s crude refining capacity has been developed to process crude oil that meets Arabian specifications. Logistically, there is a clear advantage in terms of distance and proximity, especially for refineries located on the west coast of India.
There are 9.5 million Indian workers in the Gulf, and their annual remittances play a crucial role in replenishing India’s foreign exchange reserves and maintaining the value of the Indian rupee. Foreign Direct Investment (FDI) inflows from the Middle East, particularly from the UAE, Saudi Arabia, and Qatar, seem highly promising. With Bilateral Investment Protection Agreements (BIPAs) being signed with these countries—Prime Minister Modi oversaw the signing of one in the UAE last fortnight—the anticipated equity inflows of $75 billion from the UAE, the $100 billion announced by Saudi Arabia in 2019, and $35 billion from Qatar should be possible.
PALESTINIAN NATIONAL AUTHORITY
Ever since Prime Minister Nehru’s time, India has extended total support to Palestine, a stance that has remained an article of faith for the country. This strong affirmation had, in fact, prevented India from establishing normal relations with Israel until 1992, when India initiated diplomatic relations with Israel. Until then, the Palestinian issue had been central to India’s foreign policy in the Middle East and, to some extent, with the United States. However, the rapprochement between Israel and Egypt in 1979, with Jordan in 1994, and later, in 2020, the signing of formal normalization agreements with Gulf Arab states—UAE, Bahrain, Sudan, and Morocco (also known as the Abraham Accords)—under President Trump’s initiative, has seen the salience of Palestine in India’s external affairs decline. The suspension by Israeli Prime Minister Netanyahu of plans to annex parts of the occupied West Bank was viewed as a contribution to the Palestinian cause. Nevertheless, the Palestinian leadership expressed disappointment at such recognitions by the Arab states. Its Foreign Minister, Riad Maliki, called it violative of the 2002 Saudi Arab Peace Initiative, which set two preconditions for such normalization: a full Israeli withdrawal to the pre-1967 lines and the establishment of an independent Palestinian state with East Jerusalem as its capital. The failure of the Arab League to address the actions of the UAE and other member states had led to Hamas in the Gaza Strip and Fatah in the occupied West Bank co-operating in renewing the Palestinian unity talks.
The Palestinian Authority looks to India for its continued and steadfast support for the two-nation theory. India would do well to not move away from this stance. Its public endorsement, as demonstrated by President Pranab Mukherjee’s visit to Palestine in 2015, Prime Minister Modi’s visit in 2017, and the return visit the same year by President Mahmoud Abbas of Palestine , as well as the economic co-operation and financial assistance, must remain fully intact. India should surely lend a hand in the rebuilding of the war-ravaged Gaza once the ground situation permits.
SAUDI ARABIA
Saudi Arabia has become India’s fourth-largest trading partner with $28 bn in bilateral trade, though much of it is imported crude oil. Since establishing a formal mechanism in 2014 for defence cooperation, both countries have shared intelligence and counterterrorism efforts (targeting terrorists in Pakistan as well as radical Sunni groups in Syria that pose a threat to Saudi Arabia). In 2019, they signed another agreement for the procurement and joint production of military equipment, in addition to holding joint air and naval exercises. Following the Covid-19 pandemic years, these initiatives have been put into action.
The Saudis, fearing both the ideological stance and the emerging military strength of Iran—especially its nuclear capabilities—expect India to distance itself from Iran. This has hitherto been difficult to concede by India, given its traditional and extensive ties with Iran. However, this stance may soon need to be reconsidered. As if in anticipation of it, the Saudis have shown a shift in their position; they no longer explicitly side with Pakistan and did not criticise India in 2019 when it revoked the limited autonomy of Kashmir and introduced a new citizenship law, which allegedly discriminated against Muslims and stirred controversy. Despite its growing security-related and economic proximity with the US and rapid progress towards becoming a regional superpower, Saudi Arabia’s friendly postures have aided India’s rise in status in the Middle East. India must not let go of this route to elevation in position in the Arab World, though it warrants continued caution and careful balancing. To further cement its ties with this wealthy and influential centre of Islam, India may need to go the extra mile.
IRAN
After the revolution of 1979, which saw the deposition of its Shah and the orthodox Shia religious leadership come to power, Iran has survived decades of a wide range of Western economic and military sanctions, as well as growing isolation from its neighbours. In fact, by skilfully challenging the international order and forming unconventional alliances, it might have even thrived. Iran makes no secret of its perpetual state of conflict with the “Satanic” USA. A high degree of pragmatism in advancing its own interests has enabled it to achieve a degree of well-being without sacrificing its ideological objectives. This is evident in its relationship with India as well, which it recognises as gradually moving into the Western camp.
India and Iran have had historical relations, both at the government level and through people-to-people connections. The Parsis migrated from Iran, and several Indian businessmen have roots there. However, due to the “US factor,” the relationship has not fully evolved. In 2019, US sanctions compelled India to cease its crude imports from Iran. Yet, Iran has allowed Indian goods to transit to Central Asia, Afghanistan, Pakistan, and the Gulf. Allowing India to develop the Chabahar Port, the first terminal of which became operational in December 2017, located next to the border with Pakistan, would further facilitate Indian interests, besides possibly resuming Iranian oil imports. Upon being exempted from US sanctions, India is constructing a $1.6 billion rail link from Chabahar to Zahedan in the north. However, for various reasons, progress on this project has been tardy.
Going forward, India might face challenges given that China and Iran have a 25-year-long and $400 billion worth bilateral security and economic partnership. In 2020, Iran made adverse comments regarding India’s revocation of Article 370 concerning Kashmir. Understandably, this prompted the Indian defence and foreign ministers to hastily visit Tehran to assuage their concerns and assure them of India’s continued interest in strengthening bilateral ties. Yet, in the years ahead, there might be a dilution of these ties, largely due to shifts in both regional and global geopolitics.
Dr Ajay Dua, a development economist, is an ex-Union Secretary, Ministry of Commerce & Industry.
Part 3 of the article covering ties with GCC and its member-nations UAE, Qatar and Oman besides Egypt will follow.