Strengthening Ties: The Growing Relationship Between India and Gulf States – News

Published: Thu Aug 1, 2024, 10:49 PM

Two years ago, India witnessed what could best be described as a golden moment in international trade: the first consignment of jewellery products was airlifted from India to the United Arab Emirates. The shipment of goods was made in line with the historic India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed between the two nations on February 18, 2022.

The agreement was aimed at significantly increasing bilateral trade and investment, marking a milestone in the already strong relations between India and the UAE. CEPA is expected to increase bilateral trade to $100 billion over the next five years, underscoring the deep economic interdependence between the two countries and setting the stage for even greater cooperation in various sectors.

Relations between India and the Gulf states are characterised by strong economic partnerships and growing trade, especially in the energy, infrastructure and technology sectors.

The statistics speak for themselves: The Gulf Cooperation Council (GCC) was India’s largest trading bloc in the 2021-22 financial year, with bilateral trade worth over $154 billion, according to data from the Indian Ministry of Commerce and Industry.

India’s exports to the GCC countries amounted to about $44 billion and imports to about $110 billion during the year. This economic interdependence is particularly visible in the energy sector. The Gulf region supplies more than 50% of India’s oil requirements and about 40% of its gas requirements. This energy partnership is crucial to India’s growing economy, providing a stable supply of energy that fuels its growth.

Apart from energy, cooperation in infrastructure and technology has flourished. Indian companies are deeply involved in numerous infrastructure projects in the Gulf, including construction, urban development and smart city initiatives. The participation of Indian companies in Expo 2020 in Dubai was a testament to this growing partnership. Such cooperation is mutually beneficial, offering skilled labour and technological know-how to the Gulf countries, while providing significant opportunities for growth and expansion for Indian companies.

Cultural ties and a significant Indian diaspora in the Gulf further strengthen mutual understanding and ties. According to new data, close to 9 million Indian expats live and work in the Gulf Cooperation Council countries, making the region a major travel destination and the India-Gulf migration corridor one of the busiest in the world.

This diaspora plays a key role in the economies of both India and the Gulf states, contributing to the development of employment markets and economic activity.

A recent report revealed that while India received close to $90 billion in remittances from around the world in 2022, the UAE was the second-largest source of remittances. Millions of Indians living in the six-member Gulf Cooperation Council bloc send money to families back home, supporting India’s growth in almost all sectors while significantly strengthening the country’s foreign reserves.

The Indian community also acts as a cultural bridge, fostering deeper interpersonal bonds and cultural exchange. Indian festivals are celebrated with enthusiasm in the region, reflecting the harmonious coexistence of different cultures.

Strategic alliances on regional security, counter-terrorism and maritime stability further strengthen the partnership between India and the Gulf states. Both regions share concerns about terrorism and regional instability, which has led to closer cooperation in intelligence sharing and counter-terrorism activities.

At a time when both regions are facing the complexities of the 21st century, the India-Gulf partnership is a testament to the strength of cooperation and mutual respect.

The author is a freelance writer working with Milabalyawmi.