Why does the Gulf matter for India?

Posted By
10Pointer
Categories
World Affairs
Published
8th Jun, 2022

Context

India has hit out at the Organisation of Islamic Cooperation (OIC) over its statement condemning the comments made by two Indian leaders in retaliation to the insults on Hindu deities.

Why is the Gulf outraging?

Barring the Jewish state of Israel, the 10 other countries of the Gulf region — Saudi Arabia, Qatar, Iran, Iraq, Bahrain, Kuwait, UAE, Oman, Jordan and Yemen — together account for one-fifth of the world’s Muslim population.
They are among the strongest voices of the Muslim world.

About Organisation of Islamic Cooperation (OIC)

It is the second largest organisation after the United Nations with a membership of 57 states spread over four continents.
It is the collective voice of the Muslim world. It endeavors to safeguard and protect the interests of the Muslim world in the spirit of promoting international peace and harmony among various people of the world.
It has consultative and cooperative relations with the UN and other intergovernmental organisations to protect the vital interests of the Muslims and to work for the settlement of conflicts and disputes involving Member States.
It was established upon a decision of the historical summit which took place in Rabat, Kingdom of Morocco on 12th Rajab 1389 Hijra (25 September 1969) following the criminal arson of Al-Aqsa Mosque in occupied Jerusalem.

Gulf countries and India

India has enjoyed centuries of good relations with countries like Iran, while smaller gas-rich nation Qatar is one of India’s closest allies in the region.
India shares good relations with most of the countries in the Gulf.
The two most important reasons for the relationship are oil and gas, and trade.
Two additional reasons are the huge number of Indians who work in the Gulf countries, and the remittance they send back home.

India’s Relations with the Gulf Countries

Political: The governments of the Gulf countries are India-friendly and Indian-friendly.

Recently, the Prime Minister of India has received the ‘Order of Zayed’, the highest civilian order of the UAE and the ‘King Hamad Order of the Renaissance’, the third-highest civilian order of Bahrain.
In the recent past, Saudi Arabia and the UAE have not adopted hostile posture to India’s domestic developments such as removing the special status for Jammu & Kashmir under Article 370.

Economic: The Gulf countries are among India’s key suppliers of energy and annual remittances from Indians.

The United Arab Emirates (UAE) and Saudi Arabia are India’s third and fourth-largest trading partners respectively and the total bilateral trade of the Gulf countries with India for the year 2018-19 stood at USD 121.34 billion.
UAE also features in the top 10 sources of FDI inflows into India.

Huge remittances

More than 13.46 million Indian citizens work abroad. If Persons of Indian Origin are added, this number goes up to over 32 million.
Counting only the 13.4 million non-resident Indians (NRIs), the Gulf has the largest numbers.

The UAE (3.42 million), Saudi Arabia (2.6 million) and Kuwait (1.03 million) together account for over half of all NRIs.

In terms of remittances from abroad, India was the largest recipient in 2020 at $83.15 billion, according to World Bank data.
This was nearly twice the remittances to the next highest recipient, Mexico, at $42.9 billion.
The UAE accounted for 26.9%, Saudi Arabia for 11.6%, Qatar for 6.4%, Kuwait for 5.5% and Oman for 3%.
Beyond the GCC, remittances from the US accounted for 22.9%, second only to the UAE.