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India and the Gulf — cementing ties

Atul Aneja

With the political and business environment in the West deteriorating for them, many Arab countries have begun to look East. And India is an attractive destination.

SEVERAL POLITICAL and economic factors have converged to boost India's ties with the six oil-rich nations straddling the Persian Gulf. The second industrial conference between India and the Gulf Cooperation Council (GCC) countries that concluded in Muscat appeared to have appreciated this change. The political signals showing that both sides were keen on upgrading their relationship were amply visible. The meeting was set in motion in the presence of Union Commerce and Industry Minister Kamal Nath and his counterparts from the grouping. GCC Secretary-General Abdulrahman bin Hamad Al Attiya was also present.

Diplomatic sources told The Hindu that the September 11, 2001, attacks in the United States in which Arab country nationals were involved had triggered a chain of events that had helped to make the GCC more receptive to developments in Asia, especially India and China. Citizens of many Gulf countries have been struggling to get visas, once available in abundance, to the U.S. and Europe. A cultural backlash in the West has also targeted Arabs after 9/11, discouraging interaction.

The January visit to India by King Abdullah bin Abdulaziz of Saudi Arabia, undoubtedly the most influential of the GCC countries, has also sent the right signals within the grouping to build a closer relationship with New Delhi.

Besides, questions are being raised in the Arab world about the viability of doing business with the U.S. and Europe, after political considerations blocked a commercial deal that would have put the United Arab Emirates-based Dubai Ports World in charge of running six American ports. With the political, cultural, and business environment in the West deteriorating, many Arab countries have begun to look East.

Faced with rising unemployment rates and finite oil and gas reserves, GCC members are now serious about diversifying. Countries with smaller oil and gas deposits have already made a head start in this direction.Consequently, GCC businessmen during the Muscat conference focussed their attention beyond oil. Specifically, they sought Indian expertise in information technology, biotechnology, Small and Medium Enterprises (SME), and education.

With an estimated demand of at least $150 billion to develop infrastructure, India is looking for large investments from the Gulf, which is flushed with funds due to the surge in oil prices.

The buoyancy in the India-GCC relationship has already begun to show. India's non-oil trade with the GCC stands at $ 20 billion, equal to its trade with the Europe. A Free Trade Area agreement with the GCC, which will also cover investments and services, is likely to be concluded in early 2007.

However, this initiative alone may not be enough to sustain the momentum that India-GCC ties have begun to acquire. According to a diplomat, who did not wish to be named, the GCC needs "an integrated package" from India that would cover all aspects of the relationship.

India, he said, must offer sustained manpower resources, technology and R and D inputs to the Gulf countries to enable their assured development.

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