U.S, Iran Stand Off: Gulf, Development and its Impact on India

Geographically, the Gulf is India’s extended neighborhood and the only link with the no-less vital Central Asia, with Pakistan denying this country transit rights and Afghanistan having sunk into chaos. Historically, a relationship between the subcontinent and the Gulf goes back to ancient, pre-Islamic days. Britain controlled the Gulf littoral tightly because of its overwhelming strategic importance for the defence of India, the brightest jewel in the crown. Remarkably, however, this control was exercised not from London but from Calcutta (now Kolkata) first and then New Delhi. Instability in Iraq and the threat of the repetition of Iraqi episode in Iran, endangered the India’s strategic concerned in the West Asian region as a whole. India’s emerging closer ties towards dramatic nuclear agreement with the United Stats questioned, its historical and cultural relationship with Iran and the Gulf in the context of growing India’s energy demands. Despite of a significant convergence of interest between India and the United States on several issues, India is still very much dependent on the Iran and Gulf for its multidimensional concerns of energy, workers, trade and security. India’s pluralistic, democratic and the multi-ethnic nature of its unique feature must not be compromised only for the sake of newly aligned strategic relation with the United States (and Israel). India will have to balance its relationship between the old and new friends. One can not develop one’s relation with the later at the expense of former.

Geographically, the Gulf is India’s extended neighborhood and the only link with the no less vital Central Asia, with Pakistan denying this country transit rights and Afghanistan having sunk into chaos. Historically, a relationship between the subcontinent and the Gulf goes back to ancient, pre-Islamic days. Britain controlled the Gulf littoral tightly because of its overwhelming strategic importance for the defence of India, the brightest jewel in the crown. Remarkably, however, this control was exercised not from London but from Calcutta (now Kolkata) first and then New Delhi. Even after the end of the British rule in the subcontinent, the Reserve Bank of India was the currency issuing authority in the Gulf; in the mid-1950s this arrangement was terminated at the instance of India, not of the littoral states. The discovery of oil in the early years of the twentieth century had boosted the Gulf’s strategic and economic importance. Since the first oil shock of 1973, to say nothing of the Islamic revolution in Iran in 1979 and the first Gulf War in 1991, it has swiftly increased and is at a very high pitch today amidst the brisk competition between China, India, Japan and South Korea for securing oil and gas.

Two events in 1978 and 1979—the installation of the Islamic regime under Ayatollah Sayyid Ruhollah Musavi Khomeini in Iran and the Soviet invasion of Afghanistan in support of the pro-Soviet Marxist regime in Kabul—complicated India’s relations with West Asian countries. From the India perspective, theses two events and the Iran-Iraq War changed the balance of power in West Asia by weakening Iran as a regional power and a potential supporter of Pakistan, a situation favorable to India. At the same time, proxy superpower competition in Afghanistan strengthened the hand of India’s adversary Pakistan by virtue of the military support Pakistan received from the United States, China, and Arab states led by Saudi Arabia. In the 1980s, India performed a delicate diplomatic balancing act. New Delhi took a position of neutrality in the Iran-Iraq War, maintained warm ties with Bagdhad, and built workable political and economic relations with Tehran despite misgivings about the foreign policy goals of the Khomeini regime. India managed to improve relations with West Asian countries that provided support to the Afghan mujahideen and Pakistan by redirecting India petroleum purchases to Saudi Arabia and the Gulf Countries. New Delhi, which traditionally had had close relations with Kabul, condemned the Soviet invasion only in the most perfunctory manner and provided diplomatic, economic, and logistic support for the Marxist regime.

In the early 1990s, India stepped back from its staunch anti-Israeli stance and support for the Palestinian cause. Besides practical economic and security considerations in the post-cold war International System, domestic politics played a role in this reversal. In December 1991, India voted with the UN majority to repeal the UN resolution equating Zionism with racism. In 1992, following the example of the Soviet Union and China, India established diplomatic relations with Israel. Recently, India has improved relation with Israel and United States rapidly. Indo-US nuclear deal of 18 July 2005 is very clear indication of this particular nature of relationship of both.

U.S, Iran Stand Off: Implication on India

After the second Gulf war 2003, Iranian Nuke issue has become the dominant issue in the international politics. It seems to be challenge to the entire world community and particularly to the Washington statecraft in order to manipulate the issue in accordance with the protection and promotion of its (U.S.A) vital national interest in this specific region. The Bush, white House issued its latest National Security Strategy Doctrine and identifies Iran as the “single country” that poses the greatest danger to the U.S. today. United States questions on the credibility, legitimacy, sources and the intention of the Iranian nuke as well as the regime of Iran as it had done in the Iraq episode. United State President, Junior Bush advocates that all options are on the table and military option is one of them. Iran argues as a NPT signatory that it has inalienable rights to develop research, production and use of nuclear energy for peaceful purpose (Article 4 of NPT) and to that it has the “right to participate in, the fullest exchange of equipment, materials and scientific and technological information for peaceful uses of energy. There is no doubt about the legitimacy of the Iranian Nuclear Program and development of nuclear energy for the peaceful purposes.

India’s twice vote in the International Atomic Energy Agency (IAEA), made the burning issue in the domestic politics on its stand and questioned whether it is pragmatic sift in its foreign policy or it’s a bandwagon with U.S. because of forthcoming Indo-US nuclear deals on the expense of civilizational linked Indo-Iran relationship, a reference to the interactions of Persian and Indus Valley civilations over a period of millennia.. India voted twice against Iran in IAEA on September 24, 2005 and subsequently on February 2 and March 3, 2006. India’s stands as Prime Minister Manmohan Singh explain that Iran had undertaken international obligations voluntarily- both the obligations of membership in the Non-Proliferation Treaty (NPT) and the undertaking to suspend its sensitive nuclear activist- and should abide by its commitments. He also noted concerns about the origins of fabricated uranium hemispheres, a thinly veiled reference to Pakistan.

A July 2005 Joint Statement resolved to established a Indo-US “global partnership” through increased cooperation on economic issues, on energy and the environment, on democracy and development, on non-proliferation and security, and on high-technology and space . U.S. policy is to isolate Iran and to ensure that its nuclear program is used for purely civilian purposes. India has never shared U.S. assessments of Iran as an aggressive regional power. In January 2003, then Iranian president Mohammed Khatami visited New Delhi as a chief guest at India’s Republic Day parade. During his visit, important energy deals were signed and a strategic partnership was established between both countries. In its annual report, the Ministry claims, “ The Year 2004-2005 saw further deepening and consolidation of India-Iran ties,” with increased momentum of high-level exchanges and institutional linkages between their National Security Councils. However, the Indian government rejected any attempts to link the two issues, and opposition and leftist Indian political parties denounced the remarks as a serious affront to India’s sovereignty. The Indian government has made clear that it does not wish to see a new nuclear weapons power in the region and, in this context, it has aligned itself with international efforts to bring Iran’s controversial nuclear program into conformity with Non-Proliferation Treaty and IAEA provisions.

At the same time, India’s traditional status as a leader of the nonalignment movement and its friendly linked with Tehran, have presented difficulties for Indian policymakers. There also exist in India influential leftist and opposition parties which maintain a high sensitivity toward indications that India being made a junior partner of the United States. Theses political forces have been critical of proposed Indo-US civil nuclear cooperation and regularly insist that India’s closer relations with the United States should not come at the expense of positive ties with Iran. The current India National Congress-led coalition government has thus sought to maintain a careful balance between two sometimes conflicting policy objectives. India’s main opposition, the Bharatiya Janata Party, has voiced its approval of the present government’s policy toward Iran’s nuclear program.

Both India and Iran have strong convergence of interest in different aspect. Iran sees India as a strong partner that will help Tehran to avoid strategic isolation, particular at a moment when Tehran has been designated a member of the “Axis of Evil”. Tehran also sees India as helping it to break out of the anti-Iran pincer allegedly created by the United States in the region, and as an ally against Arab nationalism and extremist Wahhabite Islam. For India, the establishment of a strong relationship with Iran is part of wider effort to pursue India’s interests pragmatically and patiently with all significant states and especially with those in India’s neighborhood. India also regards the Iranian connection as serving a variety of tangible and specific Indian interest. Perhaps most important, the nexus with Iran is seen as helping India with its energy needs. As the fourth largest economy ( in terms of Purchasing Power Parity) in the world, and one almost 70 percent dependent on foreign oil for its needs, India’s preferred choice for the transit for natural gas from Central Asia, Until such time as the developments in Pakistan and Afghanistan stabilize.

Additionally, for India, obviously, is the utility of the relationship in terms of India’s rivalry with Pakistan. In this respect, the Iran nexus is seen as facilitating Indian efforts to contain and encircle Islamabad, an opportunity seen as deriving in part from Pakistan’s weakened posture in Afghanistan. At the same time, the Indo-Iranian relationship sends a message to Washington that U.S. ties with Pakistan entail costs and one of them is strengthened Indo-Iranian nexus. India’s long-term program to deepen and widen its influence in the Indian Ocean region is depending on the Indo-Iran good relation. India’s ties with Iran would also have implication on the pursuit of Indian national interest in Afghanistan and, more broadly, in Central Asia and Caspian Basin. In Central Asia, ties with Iran will be helpful in gaining India access to markets, energy, and potential client states. India, unlike has no direct land access to Central Asia and the Caspian Basin. Last but not least, the Iran relationship is helpful in illustrating India’s willingness to live amicably with the Muslim world.

Notwithstanding, these connections, India and Iran had always friendly friendship. Iran has always been prompt in coming to assist Pakistan, whenever there were hostilities between India and Pakistan. Both in 1965 and 1971, Pakistan had benefited from Iranian largesse though it could not put into proper usage. Pakistan Air Force received German made F 86 Sabres after the 1965 war from Iran. Islamabad also received a squadron of F5 fighter from Iran during the Bangladesh war. Interestingly, when India tested nuclear weapons in May 1998 and Pakistan followed suit in a few days. The Iranian response to these two tests was noteworthy. After the Indian tests, President Khatami declared that he was concerned about the aggravation of the security situation and expressed fears of the escalation of arms race. However, when Pakistan tested weapons after a few days, the Iranian reaction was totally different. The Iranian Foreign Minister Kamal Kharaazi rushed to Islamabad to congratulate Pakistan on its achievement of exploding the first Muslim bomb. But a few people, by a selective citation of events have been trying to prove that Iran is an “all-weather friend”. While the Iranians bailed out India in the 1993 UNHRC summit, the same Iran, along with other OIC members in the 2003 Putrajaya summit, condemned in harsh terms the democratically held elections in Jammu and Kashmir.

India and GCC

India and Gulf Cooperation Council (GCC) has strong economic and cultural relations. India’s interests in the Gulf include the safety and security of over four and half million Indian migrant workers residing in the GCC states, and continued supply of oil and gas from the region. GCC combined Saudi Arabia, Oman, United Arab Emirates, Kuwait, Qatar and Bahrain. Indo-Saudi relation strengthened when the Saudi King was honored at India’s national Republic Day celebrations, which was first visit of a Saudi monarch to India since King Saud’s brief visit to the subcontinent in 1955. Relations subsequently froze, as Riyadh sided with Washington during the Cold War, and New Delhi drifted closer to Moscow. Saudi-Indian ties strained further after the Indian government failed to condemn the 1979 Soviet invasion of Afghanistan while the Saudi government helped bankroll the opposition Afghan mujahideen. However, with the Cold War over, such impediments to Saudi-Indian relations evaporated. During the state visit, king Abdullah and Indian Prime Minister Manmohan Singh signed an Indo-Saudi “Delhi Declaration” calling for a wide-ranging strategic partnership, putting energy and economic cooperation on overdrive, and committing to cooperate against terrorism.

The two countries have significant interests beyond oil. While India is nor a Muslim-majority country, it still hosts the second-largest Muslim population in the World, a constituency that remains interested in Saudi Arabia as the site of the holy shrines at Mecca and Medina. New Delhi has also cultivated Riyadh for strategic reasons. To India strategists, any ally that can act as a counterweight to Pakistan in the Islamic world is significant. Initially, New Delhi sought to cultivate Tehran, but such efforts stumbled in recent years as the Islamic has adopted an increasingly aggressive anti-Western posture. Saudi Arabia now fills that gap. Indeed Iranian nuclear ambitions have helped draw New Delhi and Riyadh closer.

India has had social and mercantile contact with the region comprising the seven Emirates, which now from the United Arab Emirates (UAE), since at least 3000 B.C. The relationship between India and UAE enjoyed a strong and friendly relationship based on historical contacts, shared traditions and values. People-to-peoples contacts and barter trade for clothes and spices from India in exchange for dates and pearls from the region have existed for centuries. Sharjah and Dubai were (is) the main hubs for trade with the western coast of India and in particular, the Malabar Coast. Following the accession of H.H. Sheikh Zayed Bin Sultan Al Nahyan as the Ruler Abu Dhabi in 1966 and the rapid development of Abu Dhabi thereafter and subsequently of the other Emirates, after the creation of the federation in 1971, India-UAE relations flourished. Today UAE is home to over one million Indians. A large Indian expatriate community resides and engages in the UAE in economically productive actives.

The relationship has evolved into a significant partnership in the economic and commercial sphere with UAE emerging as the second largest market globally for India products. At the same time Indians have emerged as important investors within the UAE and India as an important export destination for the UAE manufactured goods. Indo-UAE trade, valued at US$180 million per annum in the 1970s, is today valued over$18 billion. This emergence of UAE as a re-export centre is reflected in our growing trade. The bilateral trade has shown significant growth over the past few years with our exports to UAE for the period April 2006-February 2007 being US $10,671.88 million as compared to US $ 7,331.38 million in the same period in 2005-6. India’s imports, from UAE for the same period was US$ 7,500.61 million while it was US$ 3,787.91 million in the same period in 2005-6. Total trade for the period April 2006-Februaly 2007 which is favoring India was US $ 3,171.27 million and for the same period in 2005-6 was$11,119.29 billion. The major items of India’s exports to UAE have have been RMG cotton including accessories, gems & jewelry, manmade yarn, fabrics, manufacturers of metals, cotton yarn, marine products, machinery &instruments, plastic &linoleum products, tea and meat & preparations. Similarly, major items of imports from UAE include petroleum and petroleum products, gold & silver, metal ores & metal scrap, sulphur and unroasted iron sited India to examine Anti Aircraft L-7—40.

An Indo-Bahrain historical relation is no exception in the West Asian region. Indian nationals’ accounts 300,000 of the Kingdom’ total population of 750,000. In the high-level meeting held after a gap of nine years, both the nations agreed to hasten the proposed Memorandum of Understanding for cooperation in provision of better health and medical services in the Kingdom. The draft proposed by the kingdom’s Ministry of Health covers training, research and development, hospital policies and procedures, health insurance, food and drug administration and traditional and alternative medicine in November 2007. The two sides agreed to promote joint ventures in manufacturing industries like petrochemicals, aluminum, iron and steel, Information Technology, financial services, insurance, professional training and medical services. Bahrain agreed to look into the Indian proposal for recognition of academic and professional degrees awarded by Indian universities and institutions in accordance with the regulations of the kingdom’s Ministry of Education. It was decided to hold the fifth session of the committee in New Delhi in November 2009.

India and Oman are linked by geography, history and culture. 50 years of Indo-Oman diplomatic ties were celebrated from January 2005 to February 2006 with a number of unique events and functions to emphasize the historic and varied nature of the bilateral relations. Both countries signed Treaty of Friendship (1953), Memorandum of Understanding (MoU) on Joint Cooperation for Combating Crime (1996), and Extradition Treaty and MoU on cooperation on Audit Services (2004). Indians constitute the largest expatriate community living in Oman. The contribution of Indians to the development of Oman, particularly in the fields of commerce, healthcare, education, horticulture, finance, construction and communication is widely acknowledged There are 15 Indian schools in the Sultanate. All schools follow CBSE (Central Board of Secondary Education) pattern, except one, which is affiliated to the KSB (Kerala State Board).

Emerging Indo-Kuwait relation is also significant. Indians are among the largest and most vibrant expatriate nationals in Kuwait. Their contribution especially in the development of its trade health care and education is commendable. Remittances from these constitute a significant contribution to the Indian economy. There are over 5 lakh Indians living and working in Kuwait whose presence in itself plays a positive role in fostering India-Kuwait relations. Recently, the Government of India has taken several initiatives and measures to encourage foreign investment inflows, particularly the flow of Foreign Direct Investment (FDI). Major thrust areas include infrastructure development, particularly energy, power, telecom and township development.

India and Qatar have been enjoying friendly bilateral relations since the beginning. Both countries share many interests and have common views on major global and regional issues. There are about 1.5 lakh Indian workers in the country. Both countries signed an Additional protocol to the 1985 bilateral agreement on the Regulation of Employment of Indian Manpower between the two countries in November 2007. Already the two countries co-operated and collaborated in many ways, including training of personnel, joint exercises and services to service information sharing. Both countries decided to sign bilateral defense agreement, similarly Qatar had defence co-operation accords with such countries as the US, the UK and France.

It is important to mention here the changing perception of India and Indians in the Gulf. While characteristics such as India being the world’s largest democracy, home to 150 million Muslims, fourth largest economy in the world in terms of purchasing power parity and world’s largest provider of peacekeepers are well documented, India’s strategic importance is being viewed in what the country is shaping to be fourth largest consumer energy by 2010, which is indicative of the economy’s momentum: hi-tech plans to develop super-computers, complete nuclear fuel cycle facilities and placement of own satellites in orbit: replicating IT success in biotechnology, biogenetics and pharmaceuticals: and more importantly, a strategic partner of the United States, which is willing to share nuclear technology for civilian use and even share roles in joint space missions.

Bahrain-based intellectual Abdullah Madani wrote in his column about the Gulf’s “recognition of India’s advancement in numerous vital areas and its political willingness to learn and benefit from India. This is a new Gulf rhetoric, given the prevailing preconceived idea in the region that India is no more than a backward nation that is only capable of supplying poor quality goods and unskilled labour. In fact, there is now a sound base for the two sides to establish a long-term strategic partnership.Of course, there is a pervasive feeling all around that economic sense is common sense. The GCC has finally realized the significance of reinforcing and expanding cooperation with India, while maintaining its strong ties with Pakistan, a key element that was missing in its diplomacy armour in the past. This marked a big leap in the GCC’s new “Look East” policy. In April 2004, the GCC chambers of commerce and industry called for prioritizing economic cooperation with Asian countries with large populations and developing economies, especially Indian and China.

Changing policies in GCC

Notwithstanding, these positive relation between the India and GCC, has only the bright aspects in the relationship. September 11 episode, has posed a new kinds of threat in the international relation and these multilateral relation is not exception. Gulf countries started implementing very strict policies regarding expatriates and increasing unemployment of their own nationals. In order to meet the challenge, the GCC countries are taking various measures, including nationalization of the workforce. Jobs in many sectors are no longer open to expatriates, especially in Oman and Bahrain, which have lesser oil revenues, growing unemployment and a willingness among nationals to accept occupations dominated so far by foreigners. In Oman’s private sector, the number of expatriates has fallen by 24.4 per cent since January 2003. Statistics reveal that more than 134,000 expatriates left their jobs over the last three years. By 2004, the country’s single largest industrial enterprise, Oman LNG, achieved 73 per cent Omanisation of its staff through a plan to initially use foreign expertise and then train Omanis to take over. The total number of expatriate workers in the private sector with valid work permits stood lower at 415,135 at the end of July 2005 compared with 549,338 at the end of January 2003.

The government has banned expatriates from selling and transporting fruit and vegetables in several regions of the country. Expatriates cannot engage in frankincense trade or in the sale of mobile phones in certain cities. Running beauty parlors and photo studios is now for nationals only and even the sale of ‘abayas’-the traditional Arabic full-length robe for women-is reserved for Omani women. The government also intends to restrict the selling of perfumes, gifts, textiles and accessories and the running of cyber cafes to its nationals. Since January 2003, the number of expatriates engaged in agriculture and fishing sector, fell 32 per cent, from 66,000 to 45,000 in July 2005. More than 59,000 expatriate workers left the wholesale, retail trade and car repairs sector, making the total number of expatriates working in these areas as low as 89,461 as against 148,516 in January 2003.

According to an official study, up to 20,000 locals were unemployed in Bahrain. Further, a survey revealed that almost 70 per cent of Bahraini men and women have no qualms about taking on domestic work. The survey found most willing to work as babysitters, nurses for the elderly, drivers or gardeners. However, there was a strange twist-only 10 percent of respondents were willing to employ Bahrainis in those positions due to inadequate skills, cultural problems and “security threat”.

Saudi Arabia is no exception either. Facing a population explosion and growing unemployment, the government decided in 2003 to reduce its foreign workforce by more than half in 10 years. Following a study, the Interior Ministry’s Manpower Council announced a 20 per cent ceiling on the number of expatriate workers and their dependents in the kingdom. The directive also meant that workers from a single country would account for no more than 10 per cent of the workforce by 2013. According to Saudi Interior Minister Prince Nayef, “The employment of expatriates should not be at the expense of Saudi job-seekers. More than 100,000 young Saudis enter the job market annually.” He added that expatriates were also increasing the government’s burden in terms of “pressure on infrastructure facilities and increasing crimes.

As part of its ‘cultural diversity policy’, the UAE announced in 2003 that it intends to scrutinize visa applications of Asian workers because of official concern about their growing numbers in the country, its reliance on foreign workers and its changing demography. Officials stress that there is no specific quota for any nationality, but, when a company applies for an employment visa for a new worker, the ministry checks its records. If it found that the majority of those waiting to be recruited are of the same nationality, the company is asked to recruit nationals from other countries.

Such was the concern that the then UAE President, Sheikh Zayed bin Sultan Al-Nahyan, said, “This imbalance continues to pose a grave problem which threatens the stability of our society and the prospects for future generations.” In line with this approach, officials even suggested that they were not averse to making life less comfortable for expatriates to stem the flow.



References:

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Berlin L. Donald (Oct.2004) India-Iran Relations: A Deepening Entente”, Asia-Pacific Center for security Studies.
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Mitra Pramit and Vibhuti Hate (2006), “India-Iran Relations: Changing the Tone?”, Center for Strategic and International Studies, No.92.
Pant V. Harsh (Fall, 2006), “Saudi Arabia Woos China and India”, Middle East Quarterly, Vol.13, No.4.
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Sisodia, N.S and Ashok K. Behuria (eds., 2007), West Asia in Turmoil, Implications for Global Security, New Delhi: Academic Foundation.

India, Israel and Russia: An Emerging Triangle

The end of Cold War restructured the bipolar international system into the unipolar one and led to the readjustment as well as revisit to the foreign policy doctrine of its unit in order to protect and promote the national interest in new context. India was not exception. While re-establishing diplomatic relation with Israel and opening the door for the closer relation with the West particularly to the United States, India crossed the traditional idealistic rubicon and adopted pragmatic and realistic foreign policy. India and Israel have established considerably good relation in multi-dimensional aspects. Both have improved the trade relation in various fields including agricultural products, medicine, energy, Science and technology etc. They established a joint commission on trade. Both have joint mechanism in the field of combating terrorism as well. India which had the closer and timetested friendship with erstwhile Soviet Union made normal relation with New Russia in accordance with the national interest priories and developed its relation in several aspect as well. At the same time similar experiences of India, Israel and Russia in the field of modernization of defence and cross border terrorism, gave the triangular shape of relationship while recognizing the common interest in different dimension such as defence, security, science and technology, mechanism to combat terrorism.