IDSA Issue Brief

IDSA ISSUE BRIEF 1

Accelerating India's “Look

West Policy” in the Gulf
Prasanta Kumar Pradhan
Prasanta Kumar Pradhan is Associate Fellow at the Institute for Defence
Studies and Analyses, New Delhi

February 03, 2011

Summary
Adoption of the Look West policy in 2005 reflects India's increased desire for
engagement with its West Asian neighbours. The Gulf region is important for
India because of increased cooperation in the fields of trade, business, politics
and security. Several high level visits have been exchanged and important
agreements signed between the two sides on a number of issues. Bilateral
engagement has also gathered momentum because of similar perspectives on
terrorism and piracy. India's endeavours for deeper engagement with the
region has been well accepted by the Gulf countries that realise India's potential
as a large, stable, democratic country and an emerging political and economic
power in Asia and the world.
Accelerating India's “Look West Policy” in the Gulf 2

Several important developments have taken place in India’s relationship with the Gulf
region since India adopted the “Look West policy” in 2005. While announcing the new
policy, Prime Minister Manmohan Singh said that “the Gulf region, like South-East and
South Asia, is part of our natural economic hinterland. We must pursue closer economic
relations with all our neighbours in our wider Asian neighbourhood. India has successfully
epursued a ‘Look East’ policy to come closer to the countries of South-East Asia. We must
come closer to our western neighbours in the Gulf.” He authorised the Commerce and
External Affairs Ministries to begin negotiations with the Gulf Cooperation Council (GCC)
to conclude a Free Trade Agreement (FTA), and also approved negotiations with all
individual member countries of the GCC for a Comprehensive Economic Cooperation
Agreement (CECA) covering the services and investment sectors.1

India considers the Gulf region as part of its ‘extended neighbourhood’. Several high
level visits have taken place from India and the relationship has become stronger over
the last few years. The relationship has been marked by the growth of trade and business,
increased cooperation in the fields of security, regional and international affairs and
improved political understanding. While it is too early to assess the success or failure of
the policy, the increasing number of visits and agreements signed during the last five
years has helped to define India’s priorities and long term interests in the region.

High level visits from India

Prime Minister Manmohan Singh visited Oman and Qatar in November 2008 and signed
important agreements with both the countries. India signed three Memorandums of
Understanding (MoUs) with Qatar on defence and security, investment, energy and
manpower development. The agreement on defence and security covers maritime security,
piracy, intelligence sharing on terrorism, money laundering, narcotics and transnational
crimes, including training and exchange of visits. The agreement on law and security
enforcement lays out the framework for sharing of information and databases on threats
posed by extremists and other legal matters. During the visit, Prime Minister Manmohan
Singh requested Qatar to supply an additional five million tonnes of liquefied natural gas
(LNG). Qatar is already the largest LNG supplier to India, and supplied 8.25 billion cubic
metres (BCM) of LNG in 2009.2

Manmohan Singh visited Oman from November 8-9, 2008. India and Oman signed an
MoU for establishing a joint investment fund with a seed capital of US$ 100 million,
which will be expandable to US$ 1.5 billion. The joint fund is designed to identify projects
in infrastructure, tourism, health, telecommunications, utilities, urban infrastructure and

1
“PM Launches ‘Look West’ Policy to Boost Cooperation with Gulf”, Press release, Prime Minister’s
Office, July 27, 2005, available at http://pmindia.nic.in/prelease/pcontent.asp?id=278
2
BP Statistical Review, 2010.
 IDSA Issue Brief 3

other sectors in both the countries. A manpower agreement was also signed between the
two countries. This agreement seeks to protect the interests of the Indian workers in Oman,
particularly those of women and those engaged in household sector which does not come
under the purview of labour laws.

Vice President Hamid Ansari visited Kuwait in April 2009. Three agreements were signed
during the visit - Educational Exchange Programme for the period 2009-2011, Agreement
on Cooperation in Science & Technology and Cultural Exchange Programme for the period
2009-2011. All the three agreements signed are intended to increase India’s soft power in
the country.

In February-March 2010, Prime Minister Manmohan Singh visited Saudi Arabia. During
his visit the Riyadh Declaration was signed with the Saudi King Abdullah bin Abdulaziz
Al Saud. The implementation of the Delhi Declaration, signed in 2006 during King
Abdullah’s visit to India, was also reviewed. In the Riyadh Declaration, the two leaders
condemned terrorism and extremism, agreed to enhance cooperation in the exchange of
information relating to terrorist activities, money laundering, narcotics, arms and human
trafficking, and to develop joint strategies in combating these threats. Both leaders also
agreed to develop a broad-based economic partnership including infrastructure, energy
and enhancing bilateral trade. The Riyadh Declaration has been termed as “a new era of
strategic partnership” by both countries.

The Prime Minister proposed a strategic partnership between the two countries in the
energy sector. He said that it is time to move beyond the traditional buyer-seller relationship
and to forge a comprehensive energy partnership. India invited Saudi Arabia to participate
in the crude storage facilities in India. The Saudi side also assured the Indian Prime Minister
of the Kingdom’s “desire and readiness” to provide India with its “present and future”
oil needs.

The recent visit of President Pratibha Patil to the United Arab Emirates (UAE) in November
2010 underlines the importance of the Gulf region for India. President Patil visited UAE
on an official four-day state visit to discuss business, political and community-related
issues. President Patil stated that “India is committed to pursuing a common strategic
vision for promoting regional peace and security and for the enhancement of our relations
in the political, economic, security and cultural fields.” President Patil said that while
UAE would continue to be important for India’s energy security, the relations have a
broader strategic dimension in political, trade, economic and cultural fields.3 President
Patil discussed investment opportunities in India with the UAE leaders and said that
India was looking at $1 trillion in investments in the infrastructure over the next five

3
"UAE, India seek new horizons,” The Khaleej Times, November 21, 2010, available at http://
www.khaleejti mes.co m/display articl e.asp?x file =data/theuae/2010/Nov ember/
theuae_November562.xml&section=theuae&col=
Accelerating India's “Look West Policy” in the Gulf 4

years and that the government was planning to disinvest up to $8.7 billion in public
sector undertakings.4 During the visit, she also inaugurated the Indian Workers Resource
Centre (IWRC) in Dubai which is a free, walk-in resource centre providing Indian workers,
especially semi-skilled and unskilled labourers, direct access to welfare services in the
United Arab Emirates.5
e
Apart from the Gulf Arab countries, Iran figures prominently in India’s Look West policy.
Iran in a number of ways is an important country for India. Though the relationship
between the two has gone through many difficult phases it has strengthened after a couple
of high level visits exchanged between New Delhi and Tehran. Iran has been defined as a
part of India’s “proximate neighbourhood.” Its geopolitical and strategic location, long
coastline along the Gulf, and its influence over the Straits of Hormuz make it an important
country in the region. For India, Iran is an important source of energy to cater for her
growing energy needs. Iran has the third largest proven oil reserves and second largest
proven gas reserves in the world. Iran’s close geographical location with India would be
beneficial for transporting oil and gas at relatively lower cost. Another potential area of
cooperation between India and Iran is in maritime security. The Indian interest in the
Indian Ocean region and the proximate neighbourhood focuses on the need for regional
peace and stability, mutually beneficial relations with littoral states, accessibility of oil
and gas resources, the freedom of navigation through the Gulf and the Straits of Hormuz,
and access to regional markets for Indian goods, technology, investment, labour and
services.6

India’s priorities in the Gulf

Energy security: Securing long term energy supply is of primary importance for India
in the region. India is currently the fourth largest energy consuming country in the world
and it may go up to third position in next couple of decades. India’s annual GDP growth
at the rate of eight per cent would require further industrial growth which would demand
more energy supply for the country. Gulf countries are already the main crude suppliers
to India with Saudi Arabia at the top supplying 14,049.15 million tonnes followed by Iran
and the UAE at 10,193.27 and 5,448.84 million tonnes, respectively.7 The growing energy
necessity has undoubtedly dictated India’s initiative of building up a ‘strategic energy
partnership’ with the region to secure long term energy supply for the country.

4
“Huge investment opportunities in infrastructure,” The Hindu, November 26, 2010, available at http:/
/www.thehindu.com/business/Economy/article915480.ece
5
“Pratibha launches Indian Workers Resource Centre,” The Hindu, November 25, 2010, available at
http://www.thehindu.com/news/national/article910925.ece
6
Speech by Foreign Secretary Ms. Nirupama Rao at IDSA-IPIS Strategic Dialogue, New Delhi, on
“India and Iran: An Enduring Relationship,” on July 5, 2010, available at http://idsa.in/
KeynoteAddressIndiaandIrananenduringrelationship_nirupamaroy
7
Export Import Data Bank, Department of Commerce, Government of India.
IDSA Issue Brief 5

Trade and investment: The Gulf remains a favourite trading partner for India and the
trade figures have been consistently going up especially with countries like the UAE,
Saudi Arabia and Iran. The UAE is India’s foremost non-oil trading partner in the world
with a total trade of 43,469.50 million dollars.8 Saudi Arabia is the fourth largest non-oil
trading partner with a total trade of 21,004.57 million dollars.9 The Gulf countries look at
India as a fast growing economy which holds the potential to compete with the major
world economies. Realising the trade potential of the Gulf countries, India has entered
into a negotiation with the GCC to finalise a Free Trade Agreement. Both the sides have
already met for four rounds of negotiations on the FTA.

Attracting Foreign Direct Investment from the cash rich Gulf region is also a priority for
India. The Gulf countries have huge potential for investing in different sectors in India for
mutual benefit. According to the Department of Industrial Policy and Promotion, from
April 2000 to October 2010 the UAE was the top investor in India from the region with
investments worth US$ 1,815.29 million, followed by Oman which has invested US$ 326.55
million. During the same period, Saudi Arabia invested US$ 31.59 million, Bahrain US$
26.78 million, Kuwait US$ 15.70 million and Qatar US$ 1.13 million.10 India offers the
foreign investors opportunities in various sectors such as infrastructure development,
science and technology, information technology, biotechnology, healthcare, higher
education etc.

Forging strategic ties: While the oil and energy trade dynamics define India’s relationship
with the Gulf countries, there is a growing realisation that it is time to move beyond the
traditional buyer-seller relationship. India is looking forward to enhance strategic ties
with the region. India needs to engage the Gulf countries to further its own influence in
the region as well as the world. India has already discussed its intention of joining the
United Nations Security Council (UNSC) as a permanent member with the Gulf countries.
By forging ties in sectors other than energy and trade with the Gulf region, India is
developing a warm relationship with the Muslim world. This would help in building up
India’s engagement with organisations like the Organisation of the Islamic Conference
(OIC) and the Arab League.

Military cooperation: Particular attention has been paid on military cooperation to deal
with common security threats. The growing threats of Islamic extremism, terrorism and
maritime piracy have become concerns for both India and the Gulf countries. There is a
growing concern over the rise of criminal activities, money laundering and illegal arms
trade between the two regions.

8
Ibid.
9
Ibid.
10
Fact Sheet on Foreign Direct Investment (FDI) from August 1991 to October 2010, Department of
Industrial Policy and Promotion, Ministry of Trade and Commerce, Government of India.
Accelerating India's “Look West Policy” in the Gulf 6

India has signed defence cooperation agreements with the UAE, Oman, Qatar and Saudi
Arabia. The defence agreements are aimed at providing military training, cooperation in
military medical services, joint exercises, joint development and manufacture of
sophisticated military hardware, cooperation in product support, services, defence science
and technology etc and jointly combating pollution caused by the military at sea.
e
The Indian Navy has been at the forefront of conducting military exercises with the Gulf
region. The Indian Navy has conducted exercises with the navies of Kuwait, Oman,
Bahrain, Saudi Arabia and UAE. Besides, the Indian Air Force has also come forward to
conduct ariel exercises with their counterparts. In September 2008, India conducted its
first joint air force exercise with the United Arab Emirates at the Al Dhafra base in Abu
Dhabi. In October 2009 the Indian Air Force conducted a joint exercise with Oman
codenamed ‘Eastern Bridge’ at the Royal Air Force of Oman (RAFO) base at Thumrait.
The exercise, though ostensibly conceived to increase interoperability between the RAFO
and the IAF, also served to underline the strategic reach of the Indian Air Force.

Fighting piracy: The recent spurt in the piracy activities off the Gulf of Aden in the
Indian Ocean has affected both India and the Gulf countries. For India, the security of the
Indian Ocean is important as large number of oil tankers pass through these waters.
Cooperation with the Gulf countries in fighting piracy would also strengthen India’s
presence in the strategic waters of the Indian Ocean. India has already deployed its naval
ships to deter the pirates.

Strengthening soft power: India has emphasised on strengthening the soft power
relationship with the countries of the region. There is a conscious effort on the part of
India to bring back Indian cultural influence in the region which India enjoyed in the
past. In recent years India has attempted to strengthen cultural ties with the Gulf countries
by signing and renewing the existing cultural exchange programmes. India signed an
Executive Programme for Cultural Cooperation for 2007-2010 in 2007. An Executive
Programme for the Cultural and Information Exchanges between India and Kuwait was
signed for the years 2009-2011 in April 2009. India signed an MoU on Cultural Cooperation
with Oman in July 2010 for a period of five years.

Cooperation in the field of education is an emerging area of cooperation between India

and the Gulf region. Under the Education Exchange Programme 2009-2011, signed between
India and Kuwait, both the countries have agreed to exchange information on studies
and researches in the fields of education and learning and exchange specialists in the
fields of general education, adult education, special-needs education, and social and
psychological services. An MoU on education was signed between India and Oman in
December 2007 which encourages cooperation between the two countries through visits
of academics, officials and students from universities and academic institutions, organising
seminars, scientific programmes and training courses, and exchange of books scientific
documents and library materials. India has also pledged to assist Saudi Arabia in setting
IDSA Issue Brief 7

up an ICT Centre of Excellence as well as institutes of higher learning, involving both

education and research in the field of technology. India and Saudi Arabia signed a
memorandum on higher education in the year 2006 which calls for exchange of teaching
faculty and students, encourage direct scientific and educational communications among
the institutions and exchange of delegations between the two countries.

Protecting interests of diaspora: Protecting the interest of the five million strong Indian
diaspora has been an important element of India’s policy priorities in the Gulf. The Indian
maids working in the households are in the most vulnerable situations as they are not
covered under the local labour laws. India has taken up the issue with the governments of
the region and has appealed for the safety and security of the Indian house maids in the
region. India has signed labour agreements with the Gulf countries which call for protecting
the workers from exploitation by the employers (like sexual harassment, physical abuse,
holding the payment, overtime work without extra incentives etc.), checking the illegal
and unauthorised recruiting agencies and unhealthy working and living conditions. The
Indian diaspora in the Gulf is a major source of foreign currency. According to the World
Bank report on the Remittances and Migration, India is the top remittance receiving country
in the world with US$ 55 billion of remittance in 2010.11 The Reserve Bank of India estimates
that for the period of 2006-07 to 2009-10, the Gulf region accounted for an average of 27
per cent of the total remittance inflows to India. The UAE and Saudi Arabia are the major
source countries for the remittance. In the year 2008-09, the remittances from the Gulf
reached US$ 14, 430 millions constituting 30.7 per cent of the total remittances received
during that financial year surpassing that of the North America.12

Gulf Reciprocates

India’s Look West policy has received the required and necessary reciprocation from the
Gulf. Impressed by the economic development of India and the growing stature of the
country in the region and beyond, the Gulf countries have looked upon India as a
responsible and trusted player. The GCC countries have adopted a ‘Look East’ policy
focusing on India and China – two major Asian giants. The rise of Asia in general and
India in particular has impressed the Gulf countries that have started trusting India and
its increasing profile. A number of leaders from the Gulf have also visited India in
recognition of the importance they attach to the country. The visit of King Abdullah of
Saudi Arabia in 2006 to New Delhi was a landmark visit as it improved the bilateral
relations between the two countries. Since then a number of heads of States and high level
delegations have paid visits to India and have openly expressed their desire to improve

11
Migration and Remittances Factbook 2011, The World Bank, Washington DC, 2011, p.13.
12
Reserve Bank of India Monthly Bulletin April 2010, on “Remittances from Overseas Indians: Modes
of Transfer, Transaction Cost and Time Taken,” available at http://rbidocs.rbi.org.in/rdocs/Bulletin/
PDFs/01ART120410.pdf
Accelerating India's “Look West Policy” in the Gulf 8

their relationship with India. For them India has emerged as a reliable partner beyond
trade and business.

Conclusion

The Look West policy has certainly accelerated India’s engagement with the Gulf region.
e
As India has huge stakes in the region, the policy should be supplemented with more
proactive Indian involvement in the various sectors. With the rapid economic growth
and rising profile of India, devising such policy of engaging with the extended
neighbourhood has become imperative for India.

The focus of the Indian interest in the Gulf region remains in the fields of trade, energy
supply and protecting interests of India workers there. India is robustly pushing its soft
power in the form of education and culture in the region emphasising exchange and
cooperation. But India has adopted a cautious approach while dealing with the political
and military issues. India is careful so as not to be blamed as an interventionist big power
in the region. India has been looking at the Gulf as a region to augment its economic and
political power and not to exercise it. Strengthening the relationship in the areas of
education and culture has been intended to maintain India’s soft power dominance by
spreading Indian culture and contributing to human resource development in the region,
while the defence and strategic partnerships have been driven by the need to tackle the
increasing threats of terrorism and piracy, and to deal with the changing political and
strategic environment in the region and the neighbourhood. By attempting to forge
strategic ties, India has expressed its desire to engage the Gulf region in all possible new
sectors while, at the same time, strengthening the all-important energy and trade ties
between the two.