Gulf became integral part of India’s ‘Extended Neighbourhood’

A recent report by the Italian Institute for International Political Studies highlights the growing importance of the Gulf region as a strategic partner for India. The Gulf region’s economic, energy, and geopolitical relevance has deepened its ties with India, making it an integral part of India’s ‘Extended Neighbourhood.’

India’s Relations with the Gulf Region

• Trade:
  • The Gulf Cooperation Council (GCC) has become India’s largest regional trading partner.
  • Trade with the GCC accounted for 15.8% of India’s total trade in FY2022-23.
  • Key trade partners include the UAE, Saudi Arabia, and other Gulf states, involving sectors like oil, gas, textiles, and machinery.
• Investment:
  • The United Arab Emirates (UAE) ranks seventh in terms of Foreign Direct Investment (FDI) inflows into India.
  • There have been significant Gulf investments in sectors such as infrastructure, technology, and energy, demonstrating the region’s growing financial commitment to India’s development.
• Defence & Security:
  • India has increased its engagements with the Gulf in various strategic groupings:
  • India-Middle East-Europe Economic Corridor (IMEC): Enhances connectivity and trade between India, the Middle East, and Europe.
  • QUAD: Security cooperation involving India, the US, Japan, and Australia, with implications for the Gulf region.
  • I2U2: A strategic partnership between India, Israel, the UAE, and the US focusing on economic and security collaboration.
  • These initiatives reflect India’s commitment to regional stability and security cooperation.
• Energy Security:
  • The Gulf region is critical to India’s energy needs, fulfilling 55.3% of India’s total crude oil demand in 2022–23.
  • Major suppliers include Saudi Arabia, the UAE, Kuwait, and Qatar, playing a vital role in ensuring India’s energy security and economic stability.
• Indian Diaspora:
  • The Gulf hosts a significant Indian diaspora, with more than 8.8 million Indian nationals residing in the region.
  • These expatriates contribute to both the Gulf economies and India’s through remittances, cultural exchange, and bilateral ties.