The way the Union government has quickly responded to the backlash from Arab countries cannot be seen in disjunction with the fact that a large number of Indians work in these nations.

Mohammed Bin Salman, the Crown Prince of Saudi Arabia, and Prime Minister Narendra Modi: The economic factor behind India’s hurry to do damage-control with Gulf countriesMohammed Bin Salman, the Crown Prince of Saudi Arabia, and Prime Minister Narendra Modi: Twitter/Narendra Modi
news Controversy Tuesday, June 07, 2022 - 15:15

The diplomatic backlash against India over the derogatory statements against Islam and Prophet Mohammed made by leaders of Bharatiya Janata Party (BJP) has continued to grow with more countries expressing outrage. Multiple countries who are part of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) – have condemned the controversial remarks. Statements have also been issued by a host of other Muslim nations including Iran, Indonesia, Jordan and Afghanistan, forcing the Indian government to engage in diplomatic firefighting. 

Spokespersons of the Indian Embassy in Qatar and Kuwait were quick to distance the Indian government from the controversial remarks, attributing them to “fringe elements”. Nupur Sharma, one of the national spokespersons of the BJP and the party’s Delhi media head Naveen Kumar Jindal, were suspended from the party following the outrage. The way the Union government has quickly responded to the backlash from Arab countries cannot be seen in disjunction with the fact that a large number of Indians work in these nations, with which India shares important trade and diplomatic relations. The fact that India is also largely dependent on these countries for its energy needs makes it all the more important for the country to take their protests seriously.   

Warnings have been raised about the possible repercussions of anti-Muslim policies domestically adopted in India. When an economic boycott was imposed on Muslim traders in Karnataka under the BJP government, Telangana Chief Minister and TRS (Telangana Rashtra Samithi) chief K Chandrasekhar Rao had condemned the situation in the neighbouring state and said, "Have they ever realised what will happen if 13 crore Indians working in other countries are sent back by those governments," he had asked, cautioning that “the cancer of communalism” would undo all the progress made by the country and the state. BJP MLC (Member of Legislative Council) in Karnataka Adagur H Vishwanath had also questioned what would happen if Indian citizens working in Muslim-majority nations were subject to a similar boycott. “So many of our people are working in different countries across the world, particularly working in Muslim countries. If all of this comes to a conclusion, what do we do, where do we go?” Vishwanath had asked. 

Remittances from Gulf countries

More than half the Indian nationals living abroad are in the Gulf Cooperation Council (GCC) countries. In total, there are an estimated 1.36 crore Indian nationals in foreign countries, of which more than 89 lakh were in the Gulf nations. The highest number were in the UAE (34,20,000, or more than 25% of total NRIs), shows data shared by the Ministry of External Affairs in February 2020. A total of 25,94,947 Indian nationals were in Saudi Arabia, 10,29,861 in Kuwait, 7,79,351 in Oman, 7,56,062 in Qatar, and 3,23,292 in Bahrain. In Iran, there were 4,000 Indian nationals, and in Indonesia, there were 7,500. 

While the number of workers migrating from Kerala to the Gulf countries has fallen considerably in recent years, the number of people migrating from Uttar Pradesh and Bihar has risen. In 2019, till November, 3.34 lakh people from India got emigration clearance to work abroad, with the top six nations being the Gulf countries preferred by 3.2 lakh immigrants, as per MEA data. The highest number of workers who emigrated were from Uttar Pradesh (31%) and Bihar (15%). 

In terms of remittances, the MEA had said that as per the RBI (Reserve Bank of India) data, during 2018-19, USD 76.4 billion was received as remittances in total. During the period 2019-20 (April-September) the figure was USD 41.9 billion. According to an RBI report on India’s inward remittances in 2016-17, 82% of the total remittances received by India came from seven countries—UAE, US, Saudi Arabia, Qatar, Kuwait, UK and Oman. The GCC countries “accounted for more than 50 per cent of total remittances received in 2016-17, notwithstanding a sharp decline in oil prices and fiscal tightening in these countries,” the report said.

Trade relations

The GCC was established in May 1981. Its members are Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the UAE. India has always maintained a close relationship with the leaderships of the Gulf countries through virtual meetings and physical tours. India's bilateral trade with all the six GCC countries, including the UAE and Saudi Arabia, has risen significantly in 2021-22 on account of increasing economic ties. Experts say the GCC's substantial oil and gas reserves are of fundamental importance for India's energy needs. 

Overall, India's exports to the GCC have increased by 58.26% to about USD 44 billion in 2021-22 against USD 27.8 billion in 2020-21, according to data from the Ministry of Commerce. The share of these six countries in India's total exports has risen to 10.4% in 2021-22 from 9.51% in 2020-21. Similarly, imports rose by 85.8% to USD 110.73 billion compared to USD 59.6 billion in 2020-21, the data showed. The share of GCC members in India's total imports rose to 18% in 2021-22 from 15.5% in 2020-21. Bilateral trade has increased to USD 154.73 billion in 2021-22 from USD 87.4 billion in 2020-21. These increasing figures assume significance as India is looking at negotiating a free trade agreement with the group.

Qatar

As the row over the BJP members’ comments escalates, Vice President M Venkaiah Naidu happens to be on a three-day visit to Qatar, a nation with which India shares a strong bilateral relationship Following delegation-level talks, Naidu observed that “nearly 40% of our gas requirements are met from Qatar” and said that India deeply values Qatar's role in its energy security. He also stated that Qatar’s investment in India has grown five times since March 2020, and thanked the nation’s leadership for “taking care of the 7.8 lakh Indians in Qatar.” Two-way commerce with Qatar rose to USD 15 billion in 2021-22 from USD 9.21 billion in 2020-21. “Qatar has also committed investments of over USD 2 billion in various Indian companies over the past two years," the MEA said. 

The total trade between Qatar and India, between April to October 2021, was 7.4 billion USD. This was an increase of nearly 60% compared to the corresponding period last year. In April 2021, Qatar Investment Authority, the sovereign wealth fund of Qatar invested 800 million USD in Swiggy. Few months later they also invested 175 million USD in Rebel Foods Pvt Ltd. Qatar had also provided medical and humanitarian support to India during the second wave of COVID-19. 

Kuwait

The country had supported India during the Covid-19 pandemic. Safe air and sea connectivity was established and Kuwait provided India with oxygen cylinders, concentrators, ventilators and other medical supplies. India has been among the top 10 trading partners of Kuwait. Bilateral trade with Kuwait has jumped to USD 12.3 billion in 2021-22 as compared to USD USD 6.3 billion in the previous financial year. 

Saudi Arabia

In October 2019, Prime Minister Narendra Modi and Saudi Arabia’s Crown Prince Mohammed bin Salman signed the Strategic Partnership Council Agreement, which institutionalised strategic relations between India and Saudi. India has received help from Saudi too during the pandemic. Saudi Arabia was India’s fourth-largest trading partner last fiscal. Total trade between India and Saudi Arabia has increased to about USD 43 billion in 2021-22 from USD 22 billion in the previous fiscal. 

United Arab Emirates

India implemented a comprehensive trade pact with the UAE on May 1, with an aim to boost bilateral trade to USD 100 billion in the coming years. The UAE was the third-largest trading partner of India in 2021-22. India's bilateral trade with the nation increased to USD 72.9 billion in 2021-22 as compared to USD 43.3 billion in 2020-21. India also receives foreign direct investments (FDI) from GCC member countries. FDI worth USD 12.22 billion was received from the UAE during April 2000 to March 2022. It was USD 3.2 billion from Saudi Arabia and USD 488 million from Qatar in the same period.

Iran

The country is considered an important partner by India, and the two nations have had several engagements in the field of health. During April-October 2021, there were regular high-level exchanges between the two countries. India and Iran also have regional connectivity projects including Shahid Beheshti Terminal, Chabahar Port and International North-South Transport Corridor. India's External Affairs Minister S Jaishankar has visited Tehran multiple times and held several meetings with Iranian leaders. While India was previously purchasing oil from Iran, it stopped in 2019 because of US sanctions on Iran. Amid rising global oil prices, Iran has offered to export oil to India. India’s External Affairs Minister Jaishankar recently questioned the sanctions on Iranian oil while refuting criticism over India purchasing oil from Russia. 

The top five product categories which were exported from India to GCC countries during 2021-22 included petroleum products, pearls, precious and semi-precious stones; premium metals and articles of imitation jewellery; electrical machinery and equipment; sound recorders and reproducers; television image and sound recorders; iron and steel; and organic chemicals. The main imported goods included petroleum products, premium metals, imitation jewellery, fertilisers, chemicals and plastics.

As per data from the Ministry of Commerce and Industry, over the past financial year, India has exported commodities to Yemen, Oman, Saudi Arabia, Iraq and Syria. The total value of exports stand at around USD 53.28 million, with a 58.16% year-on-year growth. The imports would amount to USD 1,47,828 million with major imports happening from Saudi Arabia. India recorded a 92.6% year on year growth in terms of imports. 

With PTI inputs

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