With Saudi Arabia coming in fourth, the UAE is India's third-largest trade partner overall and has been the country's main trading partner inside the Gulf on a constant basis.
Delhi, New: According to a research by the Italian Institute for International Political Studies (ISPI), under Prime Minister Narendra Modi, the Gulf area has grown in significance as a strategic partner of India and is now an essential component of its "extended neighbourhood."
Prior to the Lok Sabha elections, PM Modi made his second-to-last trip to Qatar and the United Arab Emirates (UAE).
India's ties with the Gulf nations have changed since Prime Minister Modi took office in 2014. According to Viraj Solanki, Research Fellow for South and Central Asian Defence, Strategy and Diplomacy, IISS, the Gulf has emerged as a key area of interest and influence for New Delhi in terms of foreign and security policy. This is stated in a paper for the ISPI.
Formerly, the connection was limited to energy, commerce, and Indian expatriates; over time, it expanded to include political ties, investment, and collaboration in defense and security.
India's current top goals include strengthening its regional presence and influence, resolving security issues in the area, particularly those involving the Arabian Sea and the Gulf, and luring investments to boost economic development.
In contrast to his August 2019 travel to Bahrain, Prime leader Modi's 2015 visit to the United Arab Emirates was the first one by an Indian prime leader in 34 years. This was his eighth trip to the Gulf state, including the UAE.
With 8.8 million Indian people living in the Gulf, India has a significant interest in its stability.
The biggest economic grouping in the area for India is the Gulf Cooperation Council (GCC). In FY2022-23, trade with the GCC accounted for 15.8% of India's overall trade, while trade with the EU accounted for 11.6%.
With Saudi Arabia coming in fourth, the UAE is India's third-largest trade partner overall and has been the country's main trading partner inside the Gulf on a constant basis.
A new framework for India-Gulf relations is focused on investment, political contacts, and defense and security cooperation. This is the outcome of India's expanding strategic and commercial interests in the Gulf area.
There has been a rise in economic collaboration between India and the Gulf as a result of the rising Gulf investments in India. Notably, Saudi Arabia and the UAE have declared investment ambitions in India of USD 100 billion and USD 75 billion, respectively, as the country's economy becomes more and more appealing.
At USD 15.3 billion, the UAE is now India's seventh-largest source of foreign direct investment (FDI). As of March 2022, Saudi Arabia had invested USD 3.2 billion, while Qatar had invested more than USD 1.5 billion in the previous year.
The Qatar Investment Authority also said in August 2023 that it will invest $1 billion in Reliance Retail Ventures. Furthermore, Saudi Aramco said in February 2024 that it was in serious talks to expand its downstream interests in India with Indian firms.
In addition, a joint task committee was established in September 2023 by Modi and Crown Prince Mohammed Bin Salman to expedite the Ratnagiri project.
India joined the India-Middle East-Europe Economic Corridor (IMEC) and interacted with the I2U2 alliance. An intergovernmental framework agreement on IMEC was also inked by India's counterparts and the UAE during PM Modi's February visit to the UAE.
The ISPI report also emphasized how Prime Minister Modi's personal relationships with Gulf leaders—including President Sheikh Mohamed bin Zayed Al Nahyan of the United Arab Emirates—have strengthened India's political ties with those nations by fostering mutual trust and a readiness to cooperate on delicate matters. Increased collaboration in defense and security, especially maritime security, naval cooperation, and counterterrorism, is another outcome of this.
Expanding India's links with the Gulf would benefit the country much more, but if the Middle East's security situation deteriorates, researcher Solanki said in the ISPI study that New Delhi will also have difficulties forming political and commercial relationships.
Red Sea shipping strikes and the start of the Israel-Hamas conflict had an immediate effect on India's economic expansion and energy security.
that the NDA created a coalition government with the BJP's allies, and Modi was selected as prime minister as a result.
It is probable that India would grow in importance as a "strategic partner" to the Gulf nations. The research also said that strengthening and advancing India-Gulf ties will need managing shared issues and concentrating on expanding political, economic, and security objectives.
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