Custodian of the Two Holy Mosques King Abdullah's visit to India is an emphatic sign in not only Indo-Saudi relations but also in ties between Gulf countries - and indeed the broader Arab world - and India.
The members of the Gulf Cooperation Council (GCC) look up to King Abdullah to set the trend in political relations between Arab countries and the rest of the world. Thus, the king's presence at the Republic Day celebrations in New Delhi today is seen as reaffirming Saudi Arabia's keen interest in building the relations with India, which has emerged not only as an economic powerhouse but also as a regional power.
Indo-GCC relations took a turn for the better following the Sept. 11, 2001 attacks in the US that forced a rethinking of priorities in ties between the Arab world and the US. Since then, the GCC countries have been looking eastward and moving away from the strong focus they once gave to relations with the US and the West in general.
It is in this context that the GCC countries have welcomed King Abdullah's visit to India. They see it as an exemplary Indian move which recognizes the importance of political, economic and cultural relations with not only Saudi Arabia but also the rest of the Arab countries in the Gulf. Gulf-based Indian businessmen expect the visit to give a fillip to the changing business environment in Saudi Arabia and hope that the visit will remove what they see as impediments to a free and liberal commercial environment.
On the political front, India has always supported the broader Arab causes and issues in the Middle East that are backed by the GCC states. In return, India has always lobbied for a neutral, if not sympathetic, approach by Gulf states whenever the Kashmir dispute was being dealt with at the wider Muslim level. However, it was not always easy for GCC states to comply, given their strong relations with Pakistan, a fellow Muslim country which offered the comfort of military and security assistance if the need arose.
This is an equation that India always understood, and the GCC states, over the years, have appreciated New Delhi's acceptance that it was not always possible for Muslim countries to turn away from an issue raised by a fellow Muslim country.
At the same time, in the last 10 years, the GCC states, taking the cue from Saudi Arabia, have adopted a position that the Kashmir problem had to be solved through bilateral talks between India and Pakistan and that the Gulf states would support the process but without intervention. That shift in thinking opened the door for wider Indo-GCC cooperation. India does not have a record of intervening in the internal affairs of other countries, and this stand is highly respected by the GCC, given the presence of large numbers of Indian expatriate workers in all its six states.
The GCC states and India have also found new common ground: All face the scourge of terrorism. There are fears throughout the region that terrorism could hit any country at any time, and there is also an awareness that regional cooperation in sharing intelligence and data is one of the means to pre-empt some of the threats.
India, which has a long list of wanted criminals, has signed extradition agreements with the UAE and Kuwait, and is pursuing efforts to work out similar agreements with other GCC states.
Indian businessmen in the Gulf are convinced that the various bilateral agreements that are being signed during King Abdullah's visit will open fresh avenues for them in Saudi Arabia. This is particularly so with Dubai-based businessmen who do major business with Saudi Arabia, using the UAE as the transit route for Indian goods and services destined for the Kingdom.
"Indian businessmen based in the UAE and elsewhere in the Gulf are pinning high hopes on the outcome of the king's visit to India," said E.K. Rajendran, a Dubai-based businessman. "They expect that the regulatory regime, trade laws and bureaucratic process will be eased in Saudi Arabia so that they could set up businesses in the Kingdom itself rather than operating from elsewhere in the Gulf to deal with Saudi Arabia. Indeed, Saudi Arabia is changing quickly as it interacts with the international community and absorbs the impact of globalization."
Dozens of Indian companies have already moved to take advantage of the 100 percent foreign ownership of companies in the Kingdom. However, some say, there are still some gray areas that need to be clarified before there is a steady flow of Indian businesses opening in Saudi Arabia.
Ram Baxani, director of ITL-Cosmos, the first registered commercial entity in the UAE, noted that the "narrowing of differences and the emergence of common views at the political level" would be great for business. "Once that happens, then people down the line will also tend to interact closer with each other, including businessmen and bureaucrats," said Baxani.
According to him, "the first beneficiaries of the changes favoring India in Saudi Arabia will be Indian businessmen based in the UAE" because "they are closest in geographical terms to the Kingdom and also well aware of the social and cultural environment there."
Experts argue that Indian technology and manpower, coupled with Saudi and other GCC investments, hold massive potential for international business and could boost regional cooperation in a manner that suits everyone's interests.
The GCC states are also interested in exploring possible military deals with India, but it is widely believed that it will take some time before any major deal can materialize because of the strong military ties between the Gulf states and the US and their defense agreements.
India has maintained balanced relations with Iran and in 2003, Delhi signed a military cooperation agreement with Tehran. India has explained to the GCC that its relations with Iran would not be at the expense of its ties with other Gulf states and Indians would not be a party to any issue that raises questions of regional security.
Similarly, India has also assuaged the GCC states - and indeed the broader Arab world - that its relations with Israel have no bearing on its support for the Arab cause in the conflict with the Jewish state.
The GCC states are indeed watching Indo-Israeli relations. Israel is India's second largest military supplier after Russia, and India is the largest market for Israeli arms exports. It now seems more or less accepted by the GCC states and the Arab world at large that India's relations with Israel could even be used as a leverage in the quest for peace in Palestine.
A UAE-based Indian businessman, Paras Shahadpuri, who heads a company dealing with electronic products imported from Japan, said he felt that since the king's visit "is bilateral," Indian businessmen in the UAE might only benefit from "spillovers" from decisions taken during the trip. "Most Indian businessmen in the UAE are not dealing in Indian products and services," said Shahadpuri. Therefore, if there is any India-specific decisions on trade, then it would be mostly beneficial to businesses based in India, he said.
At the same time, "if there are any changes in Saudi Arabia's regulatory regimes aimed at inviting foreign direct investments, then all businessmen based in the UAE and elsewhere in the Gulf would benefit," Shahadpuri said. He noted that there were "numerous" American, European, Asian and Far Eastern companies operating out of the UAE along with Indian firms. "All these companies will take advantage of Saudi moves aimed at directing FDIs," he added.
(P.V. Vivekanand is a veteran Indian journalist based in Sharjah.)
