GCC relations with India changing dynamics beyond traditional links

GCC relations with India changing dynamics beyond traditional links
Updated 25 January 2015

GCC relations with India changing dynamics beyond traditional links

GCC relations with India changing dynamics beyond traditional links

India’s relationship with the Gulf Cooperation Council (GCC) countries is growing like never before in the history as the progressive approaches are more satisfyingly expanding for both the parties in absolute terms as well as when compared it with Indian relations with other regional group of countries.
Indeed the changing dynamics of their relationship has gone much beyond energy security and traditional trade and commerce to the rich diaspora factor handsomely contributing in the form of remittances, which is an important contribution toward the substantial Indian foreign exchange reserve.
Among the other important factors are ongoing massive infrastructure development schemes with the involvement
of the Indians living in the GCC countries and overall economic prosperity of India, for which the overseas Indians look up to their home government with so much of expectations like inclusive growth and violence-free India rather than divisive politics.
The rapid economic developments that exploded in the Gulf countries triggered by the spectacular oil price-rise in the early 1970s had major consequences for the Indians and it is therefore significant for the huge Indian diaspora in the GCC as it resulted in the movement of Indian manpower to these countries as the total number of overseas Indians there these is around seven million, with a strong 2.8 million community alone in Saudi Arabia.
Notably, Indians living in the Kingdom as one of the most preferred community due to their expertise, sense of discipline, law abiding and peace loving nature, constitutes the largest concentration of Indian passport holders anywhere in the world and largest number of expatriates in the Kingdom that contributes handsomely toward the ongoing developments in India with the highest contribution in remittances, which is well acknowledged.
As remittances sent by the Indian community in GCC countries became a significant byproduct being so huge and ever growing, these unsung contributions from the rich diaspora to the government of India have been of vital importance in providing the means of livelihood to millions of dependent family members in India on the one hand and to keeping India’s balance of payments manageable on the other.
For example, last year, at $70 billion, India was the largest recipient of remittances from its diaspora abroad of any country in the world and of that about $38 billion came from the GCC countries only.
Significantly, as the number of overseas Indians in the GCC increased steadily over the past decades, the amount of remittances hugely went up.
Indians living in the GCC countries today constitute about 38 percent of the total expatriate population in the region, making them the largest expatriate community both cumulatively in the GCC as a whole and individually in each GCC country.
Notably, Yusuffali M.A., an Indian businessman and managing director of the Abu Dhabi-headquartered EMKE LuLu Group of companies that owns the Lulu Hypermarket chain in the GCC with an annual turnover of $ 4.5 billion globally has become a trusted name in the region.
Yusuffali has carved  a niche for himself as a leading businessman. His group employs the largest number of Indians outside India, especially in the GCC.
Yusuffali was also among VIPs who descended to Riyadh to condole the demise of Custodian of the Two Holy Mosques King Abdullah on Saturday, cutting short his Davos World Economic Forum summit.
Living in any of the GCC countries one would know how vital the Indian community is to the logistics and mechanics of the daily functioning of life in each of the GCC countries — Saudi Arabia, the UAE, Qatar, Oman, Kuwait and Bahrain.
Interestingly, the processes which propelled such large numbers of Indians into the GCC countries took place organically responding to the laws of demand and supply with little or no governmental role in pushing them to the region for livelihood.
Furthermore, the diaspora factor and the growing economic interaction have resulted in another significant development that is the ever growing flight connectivity between India and the GCC countries.
It is almost 50 percent of the total flight connections between India and the rest of the world put together. Besides the rich diaspora, energy security for India was a key factor in growing relations.
As of now, indeed world geo-economic factors dictates geopolitics and for India to become a global power it needs to register a sustained growth rate at around 8-10 percent for at least a decade and the to this end energy security will be a key factor as India is an energy deficient country. Therefore, India had to look West, to west Asia and to be specific the GCC.
According to the Embassy of India in Riyadh, the GCC’s substantial oil and gas reserves are of vital importance for India’s energy needs. 
Moreover, as close interaction between the Indians and the people of the Gulf region began with the dawn of history and dates back to several millenniums, India shares a historical heritage with the Arabian Peninsula, especially with Saudi Arabia, a major GCC country.
 For centuries traders and sailors from India, especially spice traders from South India, sailed across the Arabian Sea in boats made of Malabar wood and traders from the Arabian Peninsula crossed the Hindukush and the Arabian Sea to exchange commodities and ideas.
In the two-way trade, these sailors and traders also served as the major link between West Asia and the Mediterranean on one hand and the Indian coast on the other, and over the decent length of time the scholastic, cultural exchanges and religious ties apart from trade and commerce were established, which remain vibrant even today to further bolster bilateral ties.
Now, India enjoys traditionally cordial relations and cooperation with the GCC.
India’s historical ties with the GCC, coupled with increasing imports of oil and gas, growing trade and investment opportunities and presence of about seven million Indian workers in the region are of vital interest to India.
As India’s economic linkages with the GCC have increased steadily, especially due to the growth in oil imports and increasing diaspora, these continue to make steady progress to-date.
According to Indian embassy data, during 2012-2013, India’s exports to the GCC were $51.05 billion.
The bilateral trade during the period was $159.15 billion, marking a 7.86 percent increase over the previous year and growing at a steady pace, the embassy statistics suggest.
Hence, the GCC offers tremendous potential for cooperation in human resources, trade, investment and energy efficiency, and as far as their relation is concerned, the energy, trade and diaspora factors taken together constitute India’s largest socioeconomic partner in the world. Thus, the GCC as a collective entity has tremendous significance for India.