Dr. Chipman,
Distinguished participants in the Manama Dialogue,
Ladies and Gentlemen.
I would like to begin by thanking the International Institute for Strategic Studies (IISS) for inviting me to this prestigious event, the first time for an Indian Minister for External Affairs. I would also like to thank the Kingdom of Bahrain for the excellent
sponsorship of this meeting.
The Gulf region is India’s extended neighbourhood. It has historically been an important artery for the flow of goods and ideas and movement of peoples from and to India. Just one subject – seaborne trade – is enough to illustrate the learning that has happened
in the two directions. In addition to these historical civilisational links, there are several factors of contemporary importance in our relationship with the countries of the Gulf.
Let me list the vital stakes that India has with the Gulf countries. As a region, the Gulf is our largest trading partner. Our bilateral trade with the Gulf has increased from US$ 167 billion in 2011-12 to over US$ 180 billion in 2012-13. The traditional dominance
of oil imports persists but there are encouraging trends. For instance, our exports to Saudi Arabia increased by over 70% last year to reach nearly US$ 10 billion.
Two-third of India’s oil and gas requirement comes from the Gulf and thus the region plays a vital role in our energy security. About 7 million Indians live and work in the Gulf and their remittances contribute 40% of our total inward remittances of US$ 70
billion a year and thus play a critical role in our external finances. The contribution of Indian expatriates to the socio-economic development of their host countries is well recognized and they are respected for their technical competence, sense of discipline,
non-involvement in regional political issues and for their law-abiding nature.
The Gulf region is also a potential source of sizeable investments for us. The GCC members have significant surplus capital and India is one of the few countries, having the capacity to absorb large capital flows for infrastructure development. The Gulf is
now a significant platform for the operations of Indian companies. It is also a hub for outbound Indian passengers and tourists, with 700 flights a week between UAE and India alone.
Relevant to the theme of this meeting, there are new areas of growing importance in our bilateral partnership with the Gulf such as counter-terrorism, money laundering and anti-piracy. Defence is another emerging area of cooperation. We are adding joint military
exercises, friendly visits of naval ships and broad-based MoUs on defence cooperation to the traditional templates of bilateral cooperation. This is not surprising as the vital security interests of the two sides are interlinked. We also remain engaged on
issues of WMD proliferation and disarmament in the Middle East given the global impact of WMD proliferation, including on India’s own security interests, and given India’s consistent commitment to the global and verifiable elimination of all weapons of mass
destruction. I will return to this theme in a little while.
The attention of the international community has been riveted in the past couple of years on West Asia, in particular on the aftereffects of the so-called Arab Spring. In India too, we have been engaged with these developments, and their impact on the countries
in the Arabian Peninsula as any instability in this region could affect our vital interests. India is a vibrant democracy and we find that such a political system best suits our national temperament and needs. We are in favour of democratic pluralism and religious
moderation but it is up to the people of the region to decide the pace and the means to achieve those goals, keeping in mind their traditions and history. We are also against armed conflict or external intervention as a way of resolving political issues in
the region or elsewhere in the world.
Two and half years after the Arab Spring, the earlier, exaggerated expectations of progress towards democracy have turned out to be misplaced. Initial optimism has given way to serious concerns about the aftermath of those much-hyped events. Let me list a couple
of concerns as we see them from India. The first is that of the hijacking of genuine demands for democracy and pluralism by radical elements driven by narrow agendas. We see this for example in Syria. The second is the exacerbation of sectarian divides. The
horrific sectarian killings in Iraq and Libya are a daily reminder of this danger. All those who live in plural societies, and we are all plural these days in some way or the other - can be affected by this growing divide. Jockeying to shift the strategic
balance to the advantage of those unaffected by the Arab spring has further added to the climate of political uncertainty generated by the aftermath of the Arab spring. Such a climate of political upheaval makes developing stable bilateral cooperation difficult.
Egypt, a vital partner in the Arab world, is a case in point.
The most serious situation today, however, is Syria. The Syrian uprising, which began in Daraa on 18 March 2011 and later spread to other cities in stages, has now developed into a full-fledged civil war with external dimensions. Nearly one-fourth of the country’s
population has been displaced. The humanitarian impact of the war has been heartrending. India condemns violence by all sides and supports dialogue and negotiations between the Government and the insurgents, leading to the formation of a Transitional Governing
Body, followed by elections, as envisaged under the Geneva Communique of June 2012. Any external military intervention is unlikely to help. Apart from the question of legality, there are concerns about the spillover effects of any such action and the possibly
undesirable consequence of fueling extremism. The only silver lining in recent weeks is the rapid progress achieved on destruction of Syria’s chemical weapons and we do hope that the cooperation seen among the major powers and the Syrian government that led
to the agreement of time-bound destruction of Syria’s chemical weapons can now extend to the trickier area of a political resolution of the conflict. I am happy to share with this distinguished audience India’s decision to provide US dollars 1 million as well
as experts and training for the destruction of Syria’s chemical weapons. This is in keeping with India’s active participation in the Chemical Weapons Convention and our firm commitment to the global and verifiable elimination of all weapons of mass destruction.
The peaceful resolution of the crisis over Syria’s chemical weapons shows that global, non-discriminatory regimes on non-proliferation and disarmament matter and that they have a crucial role in resolving international security challenges.
The Iranian nuclear issue has been festering for several years, creating uncertainty across and beyond the region. Recent developments, however, are encouraging. We welcome the agreement in Geneva reached on 24 November between Iran and the E3+3. This agreement
is consistent with India’s position that the issue should be resolved diplomatically on the basis of recognition of Iran’s right to peaceful uses of nuclear energy and in accordance with Iran’s international obligations as a non-nuclear weapon state. We also
welcome the agreement reached on 11 November between Iran and the IAEA, which is the competent technical agency to verify the exclusively peaceful nature of Iran’s nuclear activities, on practical measures for enhanced IAEA verification activity at Iranian
nuclear sites. That should help rebuild confidence in the peaceful nature of Iran’s nuclear activities. It is our hope that the interim steps that have been agreed in Geneva would build trust and confidence between Iran and the international community and
lead to a durable and long-term settlement of the Iranian nuclear issue.
I am pleased to share with this audience that we have not let the recent uncertainties come in the way of our growing engagement with all countries of the Arabian Peninsula and the broader Middle East. This mutually beneficial engagement is based on a clear-headed
assessment of our national interest and our bilateral complementarities. Our successful efforts to upgrade our relations with both Saudi Arabia and Iraq are an illustration of this approach. The cooperation we are getting on counter-terrorism for example is
a tribute to the mutual trust and understanding we have been able to build together. Further in the Middle East, another example is the bilateral engagement we have been able to construct with Egypt – my dear friend Nabil Fahmy was in India just a few days
ago - despite the rapidly changing political landscape in the region.
Before concluding let me dwell for a while on some of the long-term strategic facets of India’s relationship with the Gulf. Let us take energy security first. Four out of top five oil suppliers are from the region. This is a symbiotic relationship wherein,
on one hand, India’s energy security heavily depends on the Gulf region, and on the other, India is a dependable and long-term market for the Gulf countries. Serious efforts are being made to transform these relationships from a buyer-seller one to a more
broad-based one, with equity partnership in oil production, joint ventures in oil exploration, petrochemical complexes, fertilizer plants and partnership in strategic reserves storage facility being built up in India.
Due to the discovery of shale gas in US and its cost-effective extraction, the US dependence on the Middle East for oil/energy may decline. As a result, the current big oil consumer markets of India, China, Japan and ROK will gain even more importance for the
Gulf States. If technology evolves and geopolitics permits, as I am sure it soon will, a number of different pipelines either overland or undersea can begin carrying gas from the Gulf to India, the nearest large-sized market for gas exports for the Gulf. This
could herald the next phase of energy security cooperation between our two sides and could pull together Central, West and Southern Asia into a hub of energy driven economic cooperation.
Let me turn next to investment and economic cooperation. Despite being each other’s largest trading partners, the investments by India and the Gulf in each other’s territory has remained well below potential. While FDI investment from the Gulf countries into
India stands modestly at around US$ 3 billion from April 2000 to August 2013, the portfolio investment figure is higher. Sovereign Wealth Funds of the Gulf countries can be a game changer for infrastructure investment in India, which would add a stable and
profitable element to the portfolio of assets held by them. In the other direction, the Oman India Fertilizer Company (OMIFCO) with an investment of US$ 969 million is India’s largest joint venture abroad and a successful example of the possibilities of economic
integration between India and the Gulf. Bilateral cooperation in the field of higher education, skill development, agriculture, tourism, health-care, power, and infrastructure projects can add heft to the existing trade ties, for too long centered on oil.
The third facet of our long-term cooperation has to be defence and security. Our security cooperation with the GCC countries is developing to mutual benefit. An example is the 2011 Agreement on Security Cooperation with UAE which provides for cooperation to
combat terrorism, organized crime, drug trafficking, weapons smuggling, money laundering, economic crimes and cyber crimes. The region sits astride strategic Sea Lines of Communications (SLOCs) and any disruption to these SLOCs can have a serious impact on
the Indian economy, including in terms of energy supplies. It is important to keep the region out of bounds for pirates and other nefarious non-state actors. India has the capabilities and the will to not only safeguard India’s own coastline and island territories,
but also contribute to keeping our region’s SLOCs open and flowing. The Indian Navy has continuously deployed one ship since October 2008 in the Gulf of Aden for anti-piracy duties with Operational Turnarounds (OTRs) at Salalah in Oman.
Let me conclude my presentation by underlining the high priority we attach to our economic, political and security relations with the Middle East in particular the countries of the Gulf region. These relations are poised to grow, with increasing realization
of the existing enormous potential on both sides, even though the broader context in which we seek to pursue this cooperation might seem fraught and unpredictable. The region will find in India a steady and stable long-term partner, sensitive to its needs
and alive to opportunities to develop bilateral cooperation.
I thank you for your attention.