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Kuwait, despite its small size, is a heavyweight, with some of the world’s largest oil reserves and a significant sovereign wealth fund
Prime Minister Modi’s recent praise as “one of the wisest leaders in the world” by Kuwait’s foreign minister suggests a genuine desire for closer cooperation and a recognition of India’s growing global status. (X/@narendramodi)
Forget the stories of yesteryear; India’s position in the Gulf is no longer a dream; it is reality. Prime Minister Narendra Modi’s focus on strengthening ties with this strategically important region has paid dividends, transforming India from a somewhat hesitant partner to a key player. It’s a fascinating story driven by economic pragmatism, shared security concerns and recognition on both sides of the enormous potential for cooperation.
Once seen primarily as a source of energy and a place for Indian expats to toil, the Gulf is now firmly embedded in India’s ‘extended neighbourhood’, and frankly, it’s about bloody time.
Saudi Arabia and the United Arab Emirates are leading the charge
India’s relations with Saudi Arabia and the United Arab Emirates have undergone nothing less than a revolution. Earlier, the entire conversation was mostly about oil prices and the welfare of Indian workers. These elements remain, of course, but they are now part of a much richer rolodex. The large number of high-level visits speaks for itself. Prime Minister Modi’s trips, especially to the UAE, are becoming almost routine, a far cry from the past. The records confirm this: his last visit to the United Arab Emirates was his seventh to the Gulf nation.
The economic angle is undeniable. Saudi Arabia and the United Arab Emirates have pledged massive investment in India – a staggering $100 billion and $75 billion respectively. These are not small change numbers; but investments that will reshape industries and create opportunities. Trade figures paint a similar picture.
The UAE has consistently been India’s top trading partner in the Gulf and its third largest globally. Saudi Arabia is not far behind in fourth place. In the financial year 2022-23, trade with the Gulf Cooperation Council (GCC) accounted for a whopping 15.8 percent of India’s total trade, surpassing 11.6 percent with the European Union.
It is clear as day: the economic axis is shifting, and India is firmly positioned at the heart of it. This economic boom is built on a foundation of common interests, a desire for diversification on the part of the Gulf and India’s booming economy proving an irresistible lure.
Kuwait: The missing piece finally falls into place
For too long, despite its economic importance and the sizeable Indian diaspora living there, Kuwait has felt like a somewhat underdeveloped aspect of India’s regional strategy. Consider the political inertia of 1990, when Saddam Hussein’s invasion of Kuwait saw Delhi’s initial response – weakened by past relations with Baghdad – lacking unequivocal condemnation. This reluctance understandably cast a shadow over bilateral relations for several years.
But the upcoming visit by Modi, the first by an Indian prime minister in 43 years, signals a significant change. This is not just about ticking a box on the list of countries to visit in West Asia; it is about strengthening India’s presence throughout the region. Despite its small size, Kuwait is a heavyweight, with some of the world’s largest oil reserves and a significant sovereign wealth fund.
The timing is particularly wise, given the shifting geopolitical landscape in West Asia. Kuwait’s foreign minister’s recent praise of Modi as “one of the wisest leaders in the world” suggests a genuine desire for closer cooperation and a recognition of India’s growing global status.
The large number of Indian expats in Kuwait, over a million strong and comprising a hefty 21 percent of the population, underscores the deep bonds between people. They are the backbone of many Kuwaiti industries, and their remittances contribute significantly to India’s economy. In 2023 alone, Indian expats in Kuwait remitted about 2.1 billion Kuwaiti dinars, about $6.3 billion, which is nearly 5 percent of total remittances to India.
Economic ties are already significant, with bilateral trade to exceed $10 billion by 2023-2024. India’s exports reach new highs and Kuwait’s investments in India exceed $10 billion.
But the potential for growth is huge. As India pushes for energy diversification, Kuwait, currently its sixth largest crude oil supplier, could play an even more critical role, particularly in exploring renewable energy and green technology collaborations.
Kuwait’s role in India’s energy diversification
While the Gulf has traditionally been India’s primary energy supplier, India is wisely trying to diversify its supply lines. Kuwait, along with Saudi Arabia and the United Arab Emirates, could be a key partner in this endeavour. While oil will remain critical for the foreseeable future—the Gulf still accounts for over 50 percent of India’s crude imports—the future lies in cleaner sources of energy. Recognizing this global shift, Kuwait is embarking on its own energy diversification strategy, investing heavily in solar energy projects and exploring other renewable energy sources.
This is a golden opportunity for collaboration. India, with its ambitious renewable energy targets and growing technological expertise, can collaborate with Kuwait, share knowledge and potentially invest in joint ventures. Kuwait’s sovereign wealth fund, one of the world’s largest, is already investing in India, and renewable energy is a good sector for continued growth.
From doubtful partner to regional powerhouse
Looking back just ten years, the difference in India’s position in the Gulf is like night and day. Under Prime Minister Modi, India has adopted a much more proactive and assertive foreign policy. The focus has shifted from a primarily transactional relationship to one based on strategic partnerships, encompassing defense, security and technology, in addition to the traditional pillars of energy and trade.
India’s participation in groupings such as I2U2 (India-Israel-UAE-US) and the ambitious India-Middle East-Europe Economic Corridor (IMEC) demonstrate its growing influence and its willingness to play a significant role in shaping the region’s future.
Why is there a sudden interest from the Gulf countries?
First, India’s undeniable economic rise is a key driver. It represents a large and growing market, a significant consumer of energy resources and an increasingly attractive destination for investment. The Gulf states, keenly aware of the need to diversify their economies beyond hydrocarbons, see India as a crucial partner in realizing their long-term strategic visions, such as Saudi Arabia’s ambitious Vision 2030.
Second, India’s growing geopolitical position calls for attention. Its proven foreign policy independence, its deft navigation of complex international scenarios (witness its stance on the Russia-Ukraine conflict), and its expanding military capabilities position it as a secondary player on the global stage. This makes India a valuable partner in a region grappling with instability.
Third, and crucially, Pakistan’s influence in the Gulf has demonstrably waned. Economic vulnerabilities and periods of strained diplomatic relations have diminished its standing. Conversely, Arab monarchies are now prioritizing their engagement with India, recognizing its growing global influence and economic potential. India’s firm stance against terrorism, a common concern in the Gulf, further strengthens this alignment.
Finally, Prime Minister Modi’s proactive and personal approach to diplomacy has been an important catalyst. His ability to create personal connections with Gulf leaders has cultivated trust and fostered goodwill. The frequent high-level exchanges and focus on strengthening cultural ties have cemented India-Gulf ties, exemplified by the symbolic inauguration of the BAPS Hindu Temple in Abu Dhabi.
The relationship between India and the Gulf has undergone a profound change in recent years. Moving beyond a primarily transactional dynamic focused on energy and labor, it has evolved into a multifaceted strategic partnership that encompasses trade, investment, security and cultural understanding.
Recognizing India’s growing importance and overlapping strategic interests, the Gulf states are evidently keen to cultivate even stronger alliances. This enhanced partnership is not only beneficial to India but also promises to reshape the geopolitical contours of the Middle East, where India is poised to play an increasingly pivotal role.
Opinions expressed in the paragraph above are personal and solely those of the author. They do not necessarily reflect the views of News18.
