Over the past decade, India has made concerted efforts to cultivate stronger economic and diplomatic relations with the Arab world, ranging from the oil-rich Gulf Cooperation Council (GCC) to the Levant region. The GCC, a treasure trove of natural resources, holds the key to India's energy security, providing a lifeline of crude oil that fulfilled 55.3% of its demands in the year 2022-2023. This energy demand has transformed the Gulf monarchies into titans of the global economy, and India, a colossus in South Asia, has emerged as a coveted partner. Religions do not pay the bills, but oil purchases do and the numbers do not lie; bilateral trade surged, tripling to a remarkable $180 billion in 2020-2021. With India's vast consumer market holding immense appeal, the GCC's investments have become a vital catalyst for India's economic growth, fostering a strong and enduring partnership that will shape the strategic dynamics of the region.
To fulfill India’s political, economic and demographic stakes, under Prime Minister Narendra Modi, India has cemented a revitalized outreach toward the Arabian Gulf. With India rising as the largest trading partner of the GCC, it is described as the Bharatiya Janata Party's (BJP) biggest diplomatic achievement. The United Arab Emirates (UAE) proudly claimed its position as the fourth-largest investor in India in the dynamic fiscal year of 2022-23. Saudi Arabia's $3 billion infusion in 2022 and Qatar's $1.5 billion commitment in 2023 are merely the tip of the iceberg. The Comprehensive Economic Partnership Agreement with the UAE signed in 2022 aims to boost trade to $100 billion in five years, while the Joint Working Group with Saudi Arabia will channel $100 billion in investments, including a joint mega oil refinery project in Maharashtra. Furthermore, India has secured a $78 billion liquefied natural gas pact with Qatar Energy, spanning 20 years, solidifying its position as Kuwait's largest trading partner and Oman's second-largest crude oil market. This multifaceted engagement highlights India's growing economic clout and its ability to forge mutually beneficial partnerships, as the ancient proverb "fortune favors the bold" aptly describes this new era of cooperation.
Along with economic ties, India has been able to foster defense and security relations with the Gulf Arab states. By casting a wide net of cooperation, India has secured its vital interests in the region, including the protection of sea lines of communication, the elimination of piracy threats and the exercise of the international law Freedom of Navigation (FON) in critical sea bodies like the Gulf of Aden and the Gulf of Oman. In 2023, India deployed its front-line ship in the Gulf of Oman for anti-piracy operations, which is geopolitically vital for India, while Oman plays a crucial role in sustaining India’s presence in the Gulf of Aden for maritime security missions. The Indian Army's first military exercise in the UAE and Saudi Arabia in 2024, “Sada Tanseeq,” along with joint exercises like “AI Najah IV” with Oman in 2022 and "Desert Cyclone" with the UAE in 2024, demonstrates New Delhi's intent to build strategic trust among GCC countries, thereby cementing its position as a reliable security partner in the region.
For decades, Pakistan has tenderly nurtured its relationships with Arab states, but India's growing influence in the region threatens to upend this delicate dance. As the Arab world grapples with the tumultuous forces of conflict and upheaval – from the bloody civil war in Yemen to the Syrian crisis and the Qatar diplomatic debacle – the ruling elites of the Arab Gulf have embarked on a path to diversify their economies and expand their political alliances beyond the Asian region. Pakistan's well-intentioned neutrality, however, has unwittingly played into Indian hands, as the latter has seized the opportunity to present itself as a stalwart defender of Arab interests, notably by voting three times against the Iranian nuclear deal at the United Nations. This deft maneuvering has earned India a coveted place in the orbit of the Arabic world, leaving Pakistan to ponder the consequences of its diplomatic inertia.
Likewise, Pakistan has experienced major setbacks in the context of the Kashmir issue. The Gulf states have adopted a neutral stance over Kashmir. In 2019, when India abrogated Article 370 in Indian-occupied Kashmir and stripped it of its autonomous status, the UAE called it an internal matter. Not only that, in 2020, the Indian Foreign Ministry announced that Gulf partners like Kuwait did not support any narrative that could be seen as interference in India’s internal affairs.
Additionally, the China-Pakistan Economic Corridor (CPEC) has always been a thorn in India's side, as it views China’s access to the Port of Gwadar as a future Chinese military base. Recently, Oman provided a special economic zone to India, bolstering the role of the Indian Navy in maintaining maritime security, especially amid the ongoing Red Sea crisis. This move is a clear strategic gambit by India to counter Chinese maritime ambitions in the Indian Ocean and to deter the Chinese and Pakistani navies near Gwadar. If it turns Duqm port into a military base, it could spell trouble for CPEC operations and disrupt trade routes from Gwadar to the Gulf.
Moreover, the I2U2 alliance emerged in 2021 among countries including India, Israel, the UAE and the U.S., aiming to resolve challenges through cooperation in areas like economy, energy, security, food and maritime security. India plans to boost itself as a sophisticated and powerful naval force, and its participation in strategic alliances like I2U2 has notably enhanced its maritime position in the Indian Ocean. The stakes for Pakistan have never been higher, as this strategic move by New Delhi poses a direct threat to Pakistan's interests in the Indian Ocean and the Arabian Gulf.
As the economic partnership between India and the Arabian Gulf flourishes, Pakistan’s declining economic growth has greatly affected foreign direct investment from the Arab States. While Pakistan’s slow progress in telecommunications, IT and petroleum has caused it to lose favor, India has been capitalizing on these opportunities and reaping the benefits. In 2023, both India and UAE announced plans to raise their bilateral trade from $50 million to $100 million, whereas, in the same year, Pakistan announced that it is likely to receive investments worth $25 million from the UAE and Saudi Arabia within five years. This sharp decline from a high of $200 million in late 2018 to a mere $25 million today underscores a dramatic shift. With Pakistan’s internal turmoil further straining its export relations, India has seized the opportunity to become a dominant player in the Arabian Peninsula, leaving Pakistan to grapple with a shrinking economic footprint.
With far-reaching consequences for Pakistan, India’s increasing influence in the Arab Gulf signifies a seismic shift in regional dynamics. Robust trade links, energy security cooperation and growing investments serve as the foundation for India’s strategic alliances in the Gulf, which encompass diplomatic, defense and economic facets. This move aligns with India’s pursuit of energy resources and greater geopolitical influence. Consequently, the expanding India-Gulf nexus presents both opportunities and challenges for Pakistan. As India’s geopolitical clout grows, Pakistan’s influence in the region risks being eclipsed, potentially undermining its strategic depth and economic interests. This situation presents a clarion call for Pakistan to reassess its regional strategy. To navigate these changing dynamics, Pakistan needs to enhance its diplomatic and commercial efforts and expand its global partnerships to secure its position.
