India and GCC Deepen Economic and Strategic Ties
Balaji Chandramohan
As India expands its politico-economic reach in the international system, especially in Asia’s geopolitics – it is looking for economic partners in the Gulf region as part of its aspirations. This will be welcomed by the countries in the region collectively, as they tend to recognize New Delhi’s credentials as a responsible power in the comity of nations. Institutionally, cooperation will be strengthened between India and the Gulf Cooperation Council (GCC), which will have vital significance for India. The GCC is a union of six countries in the Gulf region — Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain. The council is the largest trading bloc for India.
Experts note that the Gulf region’s substantial oil and gas reserves are of immense importance for India’s energy security and its growing population’s demands. India’s economic ties with the GCC have been steadily increasing, especially due to the growth in oil imports.
On the other hand, India’s exports to the GCC have shown steady growth in recent times. India exports a wide range of products to the region, including food processing, jewellery, synthetic fibers, textiles, pharmaceuticals, and engineering goods, all offering substantial potential.
Further, in an effort to improve their trade relations, India and the Gulf Cooperation Council (GCC) have agreed to pursue a Free Trade Agreement (FTA) between the two regions. Negotiations are set to increase in the upcoming months.
Meanwhile, India has started important geo-economic outreach to the Gulf region, which includes facilitating financial connectivity, such as integrating India’s UPI system with the UAE’s JAYWAN card. The RuPay card is also being considered.
Investment opportunities from Sovereign Wealth Funds in Saudi Arabia, UAE, Qatar, and Kuwait are being closely observed from New Delhi. It is also a fact that the Gulf region forms an important cog in the world’s geo-economics, as it connects Europe to the markets in Asia and to the wider Indo-Pacific region.
Additionally, the GCC countries collectively host a large Indian expatriate community, facilitating cooperation in terms of trade and investment. Through collaborative initiatives in trade, investment, infrastructure development, open exchange of information, and people-to-people ties, this partnership not only bolsters economic growth within the region and India, but also contributes to a more stable and prosperous global economy.
India and the GCC also share a desire for political stability and security in the region, which may help India expand its outreach to other regions globally in terms of the economy. India recognizes that the Gulf region is one of the most volatile in Asia, where special focus is required if it is to strengthen its credentials as a stable economic partner.
Institutional exchanges between India and GCC countries began with the first-ever India-GCC Political Dialogue, held on the sidelines of the United Nations General Assembly on September 26, 2003. Both sides recognized the significance of this dialogue, which marked a new era in India-GCC relations at the start of this century.
Subsequently, India and the GCC signed a Memorandum of Understanding (MoU) on the Mechanisms of Consultations on September 10, 2022, during Indian Foreign Minister Dr. S. Jaishankar’s visit to Riyadh (September 10-12, 2022) to facilitate better trade. This was followed by the first India-GCC Senior Officials Meeting, held on March 20, 2023, in Riyadh.
The dialogue also highlighted emerging opportunities in education and connectivity, especially through the India-Middle East-Europe Economic Corridor, which presents significant potential for growth by linking energy-rich markets of Europe to Asia.
In 2024, the first-ever India–GCC Joint Ministerial Meeting for Strategic Dialogue was held on September 9, 2024, in Riyadh, emphasizing the importance of combining geo-economics with strategy.
The ministerial meeting also adopted a Joint Action Plan 2024-2028 for undertaking various joint activities in diverse areas, including health, trade, security, agriculture and food security, transportation, energy, culture, and others.
India’s outreach to the GCC was further strengthened when Indian External Affairs Minister Dr. S. Jaishankar visited Riyadh, Saudi Arabia, from September 8-9, 2024, to attend the first-ever India–GCC Joint Ministerial Meeting for Strategic Dialogue, which had important economic implications. This marked the inaugural meeting between India and the GCC at the Foreign Ministers level, attended by the Foreign Ministers of all GCC countries and Jasem Mohamed Albudaiwi, Secretary General of the GCC.
Dr. Jaishankar’s participation in the multilateral dialogue underscored a significant qualitative leap in bilateral and multilateral relations between India and the Arab Gulf states. The India–GCC Joint Ministerial meeting emphasized the growing economic partnership between India and the GCC, focusing on collaboration in economic trade, foreign investment, infrastructure development, and people-to-people ties.
The meeting envisaged the Joint Action Plan for 2024-2028, outlining various joint activities in sectors such as health, trade, security, agriculture, food security, transportation, energy, and culture. The scope of cooperation may expand further, subject to mutual consensus.
The Indian Foreign Minister also used the opportunity to hold several bilateral meetings with the Foreign Ministers of GCC countries. Jaishankar pointed out that the GCC is a “cornerstone of global energy supply” and called for deepening collaboration, which he said would help “stabilize markets, drive innovation, and enhance energy security.”
Following the Indian External Affairs Minister’s visit, the UAE reinforced its economic priorities with India, as Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, visited India from September 9-10, 2024, at the invitation of Prime Minister Narendra Modi.
During his visit, he met with President Droupadi Murmu and Prime Minister Narendra Modi. Besides the political significance, the visit included participation in a business forum in Mumbai, strengthening economic ties between India and the UAE. Four significant agreements were signed between Indian and UAE entities in the energy sector.
As part of the state visit, a Memorandum of Understanding (MoU) on the operations and maintenance of the Barakah Nuclear Power Plant between Emirates Nuclear Energy Company (ENEC) and Nuclear Power Corporation of India Limited (NPCIL) was proposed.
In addition to multilateral cooperation, bilateral relations between India and the UAE have seen a notable upswing in recent years, with approximately 3.5 million Indians forming the largest expatriate group in the UAE. The two countries are among each other’s top trading partners, with bilateral trade reaching USD 85 billion in the 2022-23 financial year. India’s relations with the Arab Gulf countries are a vital pillar of its foreign policy, given the shared interests between the two sides, the presence of about 9 million Indian workers in the Gulf, and significant trade exchange. Security and strategic relations, as well as energy provision, remain crucial areas of collaboration.
As both India and the Gulf States look towards the future, there is growing anticipation of further deepening ties to advance economic cooperation, regional stability, and international security.
In conclusion, as India aspires to a better position as a global economic powerhouse, it will naturally look to the Gulf countries as part of its economic aspirations. In that context, as the GCC countries also recognize India’s emergence as one of the fastest-growing economies and a market for their exports, they will increasingly gravitate towards New Delhi. Therefore, India–GCC economic cooperation will translate into substantial geo-economic cooperation, which may strengthen existing political relations in the years to come.
[ The opinions expressed in this article are those of the author and do not reflect the views of COGGS. ]
