Conflicts in West Asia: Implications of escalating Gaza war for India

India and the Middle East

India has been moving towards enhancing and accelerating its economical maturation and improvement to realise its imaginable and rise its population’s modular of living. Accordingly, important diplomatic vigor has been invested successful enhancing economical relations with antithetic regions of the world, particularly successful the neighbourhood and the extended neighbourhood. The absorption has been connected improving trade, commerce and investments, bringing planetary concern to India, and paving the mode for Indian companies to marque their beingness successful antithetic parts of the world. Consequently, determination has been a important spurt successful India’s outer commercialized and commerce implicit the years.

The Middle East has been 1 of India’s astir important regions for outer economical engagement. Several domestic, regional, and planetary factors person contributed to the region’s emerging presumption arsenic India’s apical economical partner. Bilateral trade, vigor imports, important two-way travel of investments, connectivity projects, outflow of Indian labour and workforce, inflow of remittances and summation successful defence commercialized are among the important factors contributing to the economical engagements betwixt India and the Middle Eastern countries.

Within the region, the Gulf Cooperation Council (GCC) states, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, are among India’s astir important economical partners.

Besides, determination are notable commercialized and commercialized relations with Iran, Iraq, Israel, Türkiye, Egypt, Syria and Jordan. Further, India has been moving to heighten economical ties with the countries successful North Africa, particularly Algeria and Morocco, and had bully economical relations with Libya earlier the civilian warfare devastated the North African nation.

Enhancing connectivity 

The quest for connectivity and the imaginable for expanding partnerships successful niche and emerging areas has further strengthened India’s economical and commercialized relations with the determination countries. The International North-South Transportation Corridor (INSTC) passing done Iran connecting India to Central Asia, Russia, and Eastern Europe meant that New Delhi has agelong invested successful the Chabahar Port improvement and enlargement project. 

Since December 2018, India Ports Global Private Limited (IPGPL), a associated task institution formed by Jawaharlal Nehru Port Trust (JNPT) and Kandla Port Trust (KPT), has been operating the container/multipurpose terminals installation astatine the Chabahar Port.

In September 2023, during the G20 Summit successful New Delhi, India, on with Saudi Arabia, the United States, UAE, Germany, France, Italy and the European Union, signed an MoU to make the India-Middle East-Europe Economic Corridor (IMEC) to “stimulate economical improvement done enhanced connectivity and economical integration betwixt Asia, the Arabian Gulf, and Europe.” Besides, India has joined hands with Israel, the US, and the UAE to signifier the I2U2. India, France, and the UAE person formed a trilateral statement to heighten commercialized and strategical determination cooperation.

India has besides signed a broad economical concern statement (CEPA) with the UAE that came into effect successful May 2022 and has revived the talks connected the India-GCC escaped commercialized statement (FTA) to research the anticipation of further enhancing commercialized relations with the determination bloc.

Implications of the Middle East crisis

With specified immense economical ties and immense aboriginal potential, the Middle East is among the astir important regions for India’s outer economical relations. However, the warfare successful Gaza, its enlargement into Lebanon, the threats to the oversea way successful the Red Sea owed to Houthi targeting of planetary shipping and astir critically, the escalation successful tensions betwixt Iran and Israel tin airs a superior menace to the bilateral economical engagements.

While the wars successful the Gaza Strip and Lebanon had lone had a constricted interaction connected India’s economical relations with the Middle East, it has surely enactment a interruption connected the fiscal and commercialized projects that flowed from the Abraham Accords.

The enthusiasm for the India-Abraham Accords economical practice discussed done I2U2 with a absorption connected nutrient information and cleanable vigor and the operationalisation of the IMEC that were based connected the anticipation of improved Arab-Israeli relations person already been dampened by the continuation of the Israeli subject cognition successful the Gaza Strip and the rising Palestinian decease toll. 

The continuing Israeli battle connected the Gaza Strip and its rising quality outgo has meant that Saudi Arabia, which was successful the past exploring the anticipation of formalising relations with Israel, has taken a steadfast basal connected eschewing immoderate talks of ceremonial relations without discussing a imaginable pathway for solution of the Palestinian problem. As a result,  advancement connected the improvement and operationalisation of IMEC volition apt stay dilatory until the ongoing struggle ends.

The anticipation of enlargement of the warfare to the Gulf portion owed to the engagement of Houthis successful Yemen and the hostility betwixt Iran and Israel means that India’s economical interests tin beryllium severely harmed if the Middle East struggle does not upwind down. The imaginable for disruption successful the Red Sea means disruption and outgo escalation of planetary commercialized with Europe, and with the IMEC, the imaginable alternate to the Red Sea route, yet to afloat materialise, the warfare tin person superior implications for India’s planetary trade. 

Moreover, the confrontation betwixt Israel and Iran could disrupt vigor travel and summation lipid and state prices, which would devastate the system owed to the imaginable for outgo escalation of indispensable commodities and a emergence successful inflation. Fiscal absorption to support the lipid and state affordable, particularly for the home sector, would mean superior disruption successful budgetary planning.

What lies ahead?

The concern successful the Middle East continues to beryllium explosive, with the warfare successful the Gaza Strip refusing to extremity and expanding into Lebanon and threatening to escalate into a full-fledged warfare betwixt Israel and Iran. Thus far, the script has remained bleak. Still, the interaction connected India has been constricted arsenic New Delhi has been capable to equilibrium its relations with Israel, the Arab Gulf states and Iran without importantly altering its presumption connected the contented of coercion oregon enactment for a Palestinian state. 

Moreover, the economical outgo has been constricted arsenic the IMEC and I2U2 are successful the aboriginal stages, and India has, implicit the years, notably diversified the sources of its hydrocarbon imports. Nonetheless, the imaginable for escalation remains a superior menace to India’s economical engagement with Middle Eastern countries, including expatriates, remittances, concern and connectivity projects.

The predetermination of Donald Trump arsenic the adjacent president of the US tin beryllium a imaginable game-changer successful the ongoing conflict, going by the connection of the president-elect connected ending the conflicts successful Ukraine and Gaza. Although this whitethorn beryllium viewed arsenic a bully sign, going by the erstwhile tenure of the Trump medication (2017–2021), the likelihood of accrued unit connected Iran and escalation betwixt the US and Iran cannot beryllium ruled out. India would request to beryllium prepared for immoderate eventuality and support its planetary partners engaged to instrumentality contingency measures to safeguard its economical and strategical interests.

Post Read Questions

Why is West Asia 1 of the astir important regions for India’s outer economical relations?

How mightiness the ongoing warfare successful Gaza impact India’s economical relations with West Asia?

What are the implications of Yemen’s Houthi attacks connected planetary shipping successful the Red Sea for planetary and Indian trade?

How tin India support and grow its economical ties with West Asia amidst rising determination instability?

(The writer is an Associate Professor of Middle East studies astatine Jawaharlal Nehru University, New Delhi. Views are personal. @MuddassirQuamar. In the 2nd portion of the article, the writer volition analyse the effect of the Middle East situation connected bilateral commercialized and Indian expatriates successful the region.)  

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