GCC’S New Avatar and Invigorating India’s Interests

Chair: Ishrat Aziz
Discussants: A. K. Pasha and Anwar Alam

Even with differences among some individual member states and the hostile Gulf environment, GCC countries have still managed to maintain good relations with India. It has emerged as a successful regional organisation which has partners around the globe despite all the hurdles. In recent times, GCC has taken decisions that broaden the horizon of its engagements with the outside world, including India, both in economic as well as political fields. India should also take the opportunity provided by recent liberal moves and engage more vigorously to further enhance its interests in the region.

Economic relations have been the backbone of India-GCC ties. Political and strategic relations between India and GCC have not been smooth because of a number of reasons but trade and business have continued to grow at a steady pace. Today, GCC is the second largest trading partner of India, after the United States. According to Associated Chambers of Commerce and Industry (ASSOCHAM), India's total trade with GCC countries is estimated at US $28 billion during 2007-08 and it could top US $40 billion by 2010. The volume of trade can be gauged from the fact that India’s total trade with GCC countries rose from $5.55 billion in 2000-01 to $23.42 billion in 2005-06. The period witnessed resilience in both exports and imports. GCC countries are also the major source of petroleum energy for India.

In August 2004, India and the GCC signed a framework agreement on economic cooperation to explore the possibility of a Free Trade Area between them. Later, in November of the same year, a three-member GCC negotiating team visited India and held discussions on a broad range of issues, including the possibility of initiating negotiations towards a FTA and non-tariff barriers affecting Indian exports to the region.

Despite mutually beneficial trade and business relations between India and GCC, political relations have been rather slow and lacks enthusiasm. However, India has initiated a few steps in this direction to engage GCC countries politically and strategically in a more rigorous manner. The Government of India appointed a senior diplomat Chinmaya Gharekhan as its special envoy to the Gulf region to promote cooperation in trade and investment, Information Technology, education, culture and tourism.

Due to cordial relations with GCC countries, India has managed to gather the support of two countries – UAE and Oman – in its bid for the permanent membership of the UN Security Council. India has been granted the status of a ‘dialogue partner’ by the GCC. India is the first from the developing world and only the fourth country after USA, European Union and Japan to have got this privilege.

Despite cordial relations, there are some constraints between India and the GCC. These include continuous political support of Gulf countries for Pakistan on the Kashmir issue, their provision of material support to Pakistan against India in past Indo-Pak wars, and India’s growing relationship with Israel.

Points in the Discussion

• Recently, there has been a change in the GCC countries’ stand on the Kashmir issue which has remained a major impediment in India-GCC relations. GCC countries now want the Kashmir issue to be settled through Shimla agreement and emphasise on bilateral negotiations between India and Pakistan.
• Regarding the impact of communal violence in India on the India-GCC relationship, it was observed that India should first put its own house in order. It was also suggested that the paper should look into the GCC’s perspective of the impediments in the relationship.
• There is a need for building up a strategic and security partnership with the GCC in the Indian Ocean region. As both India and GCC have stakes in the region, this will be a positive endeavour.
• There is a need to improve people to people contacts between India and GCC but, at the same time, we must be careful of the fact that Indians are not always treated well in GCC states. India should use its soft power, increase civil society contacts, and engage the 5 million strong Indian diaspora in building a strong India-GCC relationship.
• In the economic field, there should be increased participation of the private sector, exchange of technologies, cooperation in agriculture etc. which would help in improving the relationship.
• Bilateral visits of the leaders and officials should be increased between India and GCC. It has been observed that leaders from GCC states have taken greater interest in India and are visiting India more often than vice versa.

Prepared by Dr. M. Mahtab Alam Rizvi, Research Assistant at the Institute for Defence Studies and Analyses, New Delhi.