Pax Indica: India and the World of the Twenty-first Century (27 page)

Trade is undoubtedly a vital aspect of the Indo-Arab relationship. For several centuries, India provided the necessities, comforts and luxuries needed by the people of the Gulf and occasionally re-exported by them to other markets. Well before the invention of the internal combustion engine and the sudden importance of oil and gas from Arabia, Indian foodstuffs, textiles and jewellery constituted the main exports to the Arab world, while India in turn imported huge quantities of dates and pearls.

Later, hydrocarbons entered the equation, boosting both need and quantity. As a result, India’s trade with the Arab countries is booming as never before. A look at our figures of trade with the Arab world is illuminating. For instance, the Gulf region has emerged as the most significant trading partner of India in dollar terms. During 2006–07 the total two-way trade was $47 billion; by the year 2010–11 it had reached more than $130 billion. Trade with the non-Gulf Arab countries totalled more than $15 billion. Total trade with Arab countries was about $90 billion in 2007–08 and is nearing $150 billion today. It is clear that
commerce with the Arab world has assumed an importance for India that can simply not be jeopardized.

It is also clear that here, too, there is no room for complacency. Both in the foreign and in the trade ministries, India and its trading partners need to identify and focus our work on multipliers and leverages. Negotiations with the Gulf Cooperation Council (GCC) to conclude an India–GCC free trade agreement have, for instance, become bogged down, with little sign of urgency on either side to resolve the impediments to an agreement. The successful conclusion of an FTA would complement our ongoing and rapidly expanding bilateral economic engagement with individual member countries of the GCC, but the talks have proceeded at best fitfully.

India has always shown its willingness to share with our Arab brethren our experience and expertise in institution and capacity building, governance, science and technology (including, especially, information technology), medical research and biotechnology, health care and higher education. This cooperation has also featured the training of Arab officials, diplomats, soldiers and scholars. While the more affluent Arab countries tend to pursue the training of their elites in the developed West, many developing countries in the Arab world are appreciative of the Indian connection.

There are, of course, some areas where what India offers is in no way inferior to competing products or services from the advanced West. While agreements on cooperation in information and communication technology exist with a number of Arab countries, India and Egypt have even concluded an agreement on the peaceful use of outer space. Antrix Corporation, the commercial arm of the Indian Space Research Organisation (ISRO), was awarded a contract in July 2008 for the launch of Algeria’s satellites. Antrix has completed a remote sensing project involving setting up of an earth station in Algeria using Indian CARTOSAT imagery.

The fundamentals of India–Arab relations thus both pre-date and transcend the importance of oil and gas, though there is no doubt that Arab countries—as vital sources of hydrocarbons, whether from the Gulf or more recently from Egypt, Sudan and the Maghreb—have become essential to India’s energy security needs. Indian companies have secured
concessions or have otherwise invested in the oil sector significantly in Sudan, Egypt and Libya. Less publicized, perhaps, is the enormous importance to India’s food security of countries such as Jordan, Morocco, Tunisia and Algeria as providers of rock phosphate and phosphoric acid and potash, all of which translate into fertilizer for our farmers.

Besides the hydrocarbon and fertilizer sectors, Indian companies have executed or are in the process of completing a variety of projects, including those financed by concessional lines of credit. Examples include a thermal power plant in Sudan, a cement plant in Djibouti, an architecturally complex bridge in Jordan and a variety of projects in Libya. Egypt has emerged as a significant Indian investment destination with Indian investments estimated at over $500 million. A series of India–Arab investment projects conclaves, starting in 2008, have paved the way for stronger trade and investment relations between the two regions. The conclaves provide an enabling institutionalized platform for businesses and investors from India and the Arab countries to cooperate and build partnerships.

There is much more scope for Arab investment in India; the Arab world’s surplus resources have still largely been directed to the West. Indian diplomats have attempted to persuade Arab countries that they should contemplate massive investments in our infrastructure, energy and industrial sectors, but success has been modest (though the UAE’s Abu Dhabi Investment Authority and Dubai Ports World have been active in India). India is also seeking Arab investments in its human resources through the upgrading of India’s institutions of primary education and higher learning. India’s invitation to Arab investors to participate in the new phase of development and prosperity on which we have embarked has not yet found the number of takers New Delhi had hoped for.

The Gulf region and the UAE in particular are key targets for investment promotion. The Gulf Cooperation Council countries are rich in financial resources and in technological capabilities and expertise that have emerged over the last forty years of extraordinary all-round development. The UAE as a country and the GCC as an economic grouping are already India’s number one trade partners. India’s trade with the UAE touched $67.1 billion in 2010–11 and with
the GCC members as a whole it reached $130.9 billion. India now sees the UAE and the GCC as our premier investment partners as well, in the hope that we can, through our joint efforts, build up the projects and institutions that will transform the face of India. Given the long history of our fruitful interaction, Indian ministers, myself included, have sought to portray a potential investment partnership as one more step in the mutually beneficial relationship that has bonded our people over several millennia, which promises, in its implications, to be more extraordinarily transformational and fruitful than any interaction that has gone before.

And yet, it is apparent that the mere fact of having had centuries-old contact does not mean that we do not have to endeavour to sustain and nurture our present-day relations. If anything, past proximity requires more hard work by all concerned so that neither is lulled into complacency.

Partition and the creation of a ‘Muslim Indian’ state called Pakistan certainly confused some Arab Muslims, who felt their religious affinity should imply a transfer of allegiance to Pakistan. Though this sentiment is mainly aroused only in times of war or conflict on the subcontinent, and the positive image of India has survived above and beyond the idea of Pakistan (especially since Indian expatriate workers of all faiths have a far better reputation for hard work and integrity than their Pakistani counterparts, whether merited or not), it complicates perceptions of the country in some Arab minds. (There are also strategic and security relationships with Pakistan to be considered; a contingent of Pakistani troops long protected the Saudi royal family, and the UAE was, in the 1990s, the only state persuaded by Islamabad to grant full diplomatic recognition to the Taliban regime in Kabul.) Though the bedrock of goodwill between our two regions allows us to build a strong edifice of substantial contemporary relations, it is difficult to argue that these have fully been built. Even though India considers the Arab region very important in shaping our political, economic, defence and security policies at both the regional and global level, it is far from establishing the kind of strategic partnerships essential to give these relations true geopolitical heft. Though India declares often enough that the Arab world is a key part of its strategic neighbourhood and both sides speak
desultorily of the importance of strategic cooperation, there have been few, if any, meaningful consultations at a high level to this end.

There have been evident positives: India’s approach on issues affecting the Arab world has been consistent, and New Delhi has been able to demonstrate that its policies towards the region are based on principles, not expediency. They are also backed up with tangible action: India is a major troop contributor to United Nations peacekeeping operations in Arab lands, from the United Nations Interim Force in Lebanon to the United Nations Disengagement Observer Force on the Golan Heights. Indian peacekeepers have also served more recently with the UN Mission in Sudan and UN operations in Western Sahara. India has also been a strong supporter of the United Nations Relief and Works Agency for Palestinian Refugees, and a significant aid donor to the Palestinian National Authority (it is among the very few countries to station a diplomat in Ramallah).

The principles animating New Delhi’s positions on such issues as the legitimate demands of the Palestinian people, the Suez crisis or the Algerian independence movement have stood the test of time. The overt support of many Arab countries for Pakistan at times of conflict with India has not swayed New Delhi from this course. India has endeavoured to follow the spirit of South–South solidarity and cooperation in its dealings with the Gulf and Arab world and has never failed to bear in mind its fundamental interests in the region. The result has been to promote a pattern of contact, especially at the people-to-people level, that has few parallels. It is not surprising, for instance, to note that the number of flights from Indian airports to the Gulf region far exceeds the total number of flights from India to the rest of the world.

Whereas the world has heard of our ‘Look East’ policy in Southeast Asia, of which more later, as far as the Arab world is concerned, we are proud that we have a ‘Look West’ policy too, in which the word ‘West’, for once, does not refer to Europe or America. Our traditional bonds have been revitalized in recent years. For India the basic constants remain that the Arab world is an important source of our energy security and is home to nearly 6 million Indians. The Arab world’s rich resources and the growing demands of India’s rapidly expanding economy make us natural partners. In keeping with our desire to strengthen our relations
with the countries of the region, India has been trying to put in place a structure of multifaceted cooperation covering all sectors. There is a consistent pattern of exchanging high-level visits between India and the Arab countries, bilaterally manifesting the importance of each relationship, and each seeking to open up new facets for cooperation. Several such visits and joint commission meetings have facilitated many institutional arrangements in the areas of trade and investment, energy cooperation, security cooperation, cultural, scientific and educational cooperation and bilateral arrangements.

One example of such high-level engagement occurred when the then secretary-general of the League of Arab States and my good friend, H.E. Mr Amre Moussa, in 2012 a contender for the Egyptian presidency, visited India in November–December 2008 and signed a memorandum of cooperation between India and the League of Arab States on the establishment of an Arab-India Cooperation Forum. This is a very comprehensive document that looks at deepening Indo-Arab relations in many sectors including energy, education, human resource development and trade and investment. In 2009, the Indian Ministry of External Affairs (MEA) worked with the Indian Council for Cultural Relations (ICCR) and the Federation of Indian Chambers of Commerce and Industry (FICCI) to organize the first Indo-Arab cultural festival in New Delhi with the support of various Arab missions and governments. The Government of the UAE has recently selected Indian books for translation into Arabic to enhance understanding of our country’s history and literature. The study of Arabic in India has also made significant strides, with many Indian scholars of Arabic available to provide continuing momentum to the process.

India desires to strengthen cooperation to explore opportunities across the entire spectrum of potentialities that exist in its relationship with the Arab world. We wish to work together today with an eye on tomorrow: to consolidate our ties in emerging sectors of the economy so that we can develop a framework for future generations. Our economies are complementary. In many areas, countries in the Arab world have the capital, while India offers the opportunities, especially for the development of infrastructure. The more the long-term linkages that India and the Arab world develop, the greater will be our mutual
stakes and interests in each other’s success and prosperity. When in government I used to assure India’s Arab friends that it is not only financial investments that we were thinking of: we are invested, I would say, in the future of our relationship.

And yet it should be said that our strategic aspirations have not yet been fulfilled in the region. Few consultations have taken place at a high political level on matters of mutual geopolitical interest—though intelligence sharing and meetings by India’s national security adviser with his Arab counterparts have indeed occurred. There has been no serious effort to develop a habit of strategic dialogue with the countries of the region, even though there are obvious implications for India in issues of Gulf security, and developments in the subcontinent can hardly leave the Arab world indifferent. Despite being one of the very few countries with an ambassador in Tel Aviv
and
a political officer in Ramallah, India has not attempted to play a significant role in the Middle East peace process. It named a special envoy for West Asia in 2007, but allowed his role to lapse in 2009 without replacement. As a result, a country which once was an indispensable player in international discussions and conferences on the region—and which still retains credibility with both sides of the Israel–Palestinian divide—has essentially been ignored by the UN-led quartet and has not bestirred itself to exercise its geopolitical influence in favour of a Middle East peace settlement.

Because India’s dependence on Gulf oil will increase in the coming decade, the Gulf states will continue to be central in India’s foreign policy. This raises the question of what, if anything, India can do to ensure the security of its energy supplies from the region, especially at a time of diminishing Western interest in expending resources for the security of the region (since high oil prices have made a number of alternative sources of oil and gas affordable for the West). India’s ability to control and protect the flows of energy that these states supply to India is limited, since it would require a strong ‘blue water’ navy with effective submarines and long-range aviation to help keep ‘choke points’ like the Straits of Hormuz open. These are capabilities the Indian Navy must acquire, and is in the process of doing so.