Why Marhaba NaMo is a big win for India
In what has become Prime Minister Narendra Modi's trademark, he sets out an ambitious agenda for his foreign visits and manages to deliver beyond expectations. This has happened again with his visit to the United Arab Emirates (UAE) earlier this week. It was symbolically an important visit. This was the first visit by an Indian prime minister to the UAE in 34 years after the then Prime Minister Indira Gandhi visited the Emirates in 1981. Former Prime Minister Manmohan Singh was to travel to the UAE in March 2013 but the visit was cancelled at the last minute. For Modi himself, it was his maiden visit to an Islamic country and so was keenly watched by his political opponents at home.
True to his style, Modi visited the Sheikh Zayed mosque and praised the tenets of Islam even as he managed to secure land allotment from the UAE government for construction of a temple in Abu Dhabi. Much like his previous visit, he reached out to the expatriate community in the UAE in a way that only he can. But this time his audience was largely the blue-collared workers of the UAE, around 2.6 million in total. His outreach involved not only an address to a packed stadium but also a visit to the Indian worker's camp in Abu Dhabi.
But it was the substance of the joint statement issued by Modi and Crown Prince Mohamed Bin Zayed Al Nahyan that managed to re-define the contours of a relationship that had long been bereft of political heft. Both sides denounced and opposed terrorism in "all forms and manifestations, wherever committed and by whomever, calling on all states to reject and abandon the use of terrorism against other countries, dismantle terrorism infrastructures where they exist, and bring perpetrators of terrorism to justice."
At a time when violence has been rising on the border with Pakistan and National Security Advisor level talks are to begin, the target was clearly Pakistan as the two nations came down strongly on countries sponsoring terrorism against other states. That Modi could get the UAE, one of the countries closest to Pakistan, to deliver such a message, shows how well Modi has read the changing strategic realities in the Middle East. This is a real diplomatic triumph and the UAE endorsing India's concerns on terrorism and extremism underscores the challenges facing the Gulf kingdoms at a time when the Islamic State is rising and sectarian divide in the region is widening.
Trade and investment has also got a boost with Modi's visit. The UAE's decision to step up its investment in India including through the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of USD 75 billion, will be a welcome news for the Modi government at a time when many are questioning the credibility of the government in the realm of economics. The UAE will be helping Indian companies to invest in infrastructure development in the Gulf country and will be tapping into India's expertise in small and medium enterprises.
India's policy toward the Middle East has often been viewed through the prism of Indian-Iranian relations. The international community, and the West in particular, has been obsessed with New Delhi's ties to Tehran, while missing India's much more substantive simultaneous engagement with Arab Gulf states and Israel. India's engagements with the Arab states in the Middle East have gained momentum in the last few years, even as Iran continued to hog the limelight.
India wants to secure energy supplies and consolidate economic and trade relations with the Gulf States, while these states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, or the members of the Gulf Cooperation Council) have adopted a "Look East" policy which has allowed them to carve out a much more substantive relationship with India than in the past. The economic dimension of India's Gulf policy has become more pronounced in recent years. As a group, the GCC is India's second-largest trading partner, the largest single origin of imports into India, and the second largest destination for exports from India. The UAE itself was the third largest trading partner of India in 2014-15, after the US and China, with a bilateral trade of $60 billion. The GCC countries supply 45 percent of India's petroleum with the UAE being the sixth largest source of oil.
The GCC countries remain a major destination for Indian investment, even as India is making a concerted attempt to encourage GCC investment in India. India hopes that major GCC states such as Saudi Arabia, the UAE, and Oman would participate in India's planned infrastructure expansion. With a rising demand for infrastructure development, India is looking for large investments from the Gulf, which is flush with funds due to the recent surge in oil prices. The Gulf States meanwhile are interested in human resources from India in order to develop sectors as varied as information technology, construction, transportation, and services.
Energy is clearly the driving force in Gulf-Indian relations. The GCC countries supply 45 percent of India's petroleum; the Saudis are responsible for a quarter of those supplies, and Kuwait, Oman, and the UAE are other major suppliers. Qatar remains India's exclusive supplier of natural gas, annually supplying five million tons of LNG to India. The Iranian government's decision to renege on some oil supply commitments, after India's vote against Iran at the IAEA, has also spurred New Delhi to diversify suppliers.
Developments in the Middle East will have a great bearing on the future of India's ties with the region. Indian policy seems to be favouring the status quo as regional stability is essential for Indian interests in the region. The rivalry between Saudi Arabia and Iran for regional leadership is likely to intensify along sectarian lines in the coming years. Given India's growing stakes in the Gulf, it will be forced to maintain a delicate balance between these two regional rivals. India's cautious response to the Arab Spring and its aftermath is a testament to India's belief that its policy of engaging various stakeholders in the region is the only one that helps New Delhi in preserving and enhancing its interests in the short to medium term.
Modi's visit to the UAE has once again underlined India's continuing stakes in a region that is growing through a period of momentous change. Much like the UAE, India would also like a stable balance of power to emerge in a region riven with multiple fault-lines. Modi has done well to build on that convergence.