India’s Gulf Trade and Ties: How Hindutva Hatred is Harming India’s Economy?

Mr. Narendra Modi has worked tooth and nail to strengthen India’s Gulf trade and ties, in his six years as prime minister. And for the most part, India’s initiatives have been reciprocated well by their regional counterparts.

However, over the past weeks, the world has witnessed immense outrage in the Arab world against India over the derogatory comment about Prophet by high-ranking BJP spokespersons. 

So, is India’s Hindutva movement jeopardizing its economic relationships with the Gulf countries?

India’s Gulf Trade and Ties Explained

India has maintained good economic and diplomatic ties with the Gulf nations. PM Narendra Modi especially has prioritized India’s relationship with the Arab countries.

In fact, PM Modi’s first international visit in 2022 was to Kuwait and the UAE. So India’s financial stakes in the region are high, and this is why:

Import and Export: Strong Trade Ties

India shares strong economic trade ties with the Arab nations, particularly those in the Gulf Council Corporation (GCC).

According to the Indian Ministry of Commerce, India’s export to the GCC countries rose by almost 58% in 2021-22; accounting for an estimated USD 44 billion. This made up about 10.5% of India’s total export in the same financial year.

On the other hand, with a total import of USD 110.73 billion from the Gulf countries, India recorded an import increase of 85.8% from 2020-21. This accounts for 18% of the total Indian imports in 2021-22.

Indian Living and Working in Gulf Countries

Around 13.46 million Indians are living abroad, or 32 million if you add persons of Indian descent who are citizens of another nation; according to figures released by the Ministry of External Affairs in 2020.

More than half of the 13.46 million NRIs live in the Gulf countries, with the UAE, Saudi Arabia, and Kuwait hosting the largest numbers of Indians—roughly 3.42 million, 2.6 million, and 1.03 million, respectively. In contrast, there were 7,45,775 and 7,79,351 Indians in Qatar and Oman.

Furthermore, 50% of India’s total personal remittances sent by NRIs come from Indian working in the Gulf nation. Of these, Qatar (6.5%), Oman (3%), Kuwait (5.5%), and Saudi Arabia (11.6%) are the most significant contributors.

Oil Supply

India purchased 212.2 million tonnes of crude oil from 42 different nations in 2021–22; according to the PPAC (Petroleum Planning & Analysis Cell) report of the Union Ministry.

However, the Gulf nations provided most of the oil that India imported during this time; with Iraq being the top supplier, contributing 22% of India’s oil imports.

Saudi Arabia and the United Arab Emirates came after Iraq. And, now Kuwait is also emerging as one of the principal oil exporters to India.

“The GCC has emerged as a major trading partner of India. It has vast potential as India’s investment partner in the future. The GCC’s substantial oil and gas reserves are of utmost importance for India’s energy needs.”

The Indian embassy in Riyadh, the GCC, consisting of the UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain

However, the growing extremism and hate speech against the Muslim community is jeopardizing India’s trade and ties with not only the Arab nation but also defenders of human rights everywhere. Furthermore, the statement made by Nupur Sharma and Jindal when India is pursuing a free trade pact with the GCC is mounting enormous challenges for the government.

India Facing Sharp Backlash by Gulf Countries

India and Gulf nations share an intimately intertwined relationship on both the cultural and economic fronts. Especially the GCC countries, which include the UAE, Qatar, Oman, Saudi Arabia, Bahrain, and Kuwait, have gained immense prominence in the Indian economy.

However, over the last weeks; three Gulf countries, including Kuwait, Iran, and Qatar have criticized India over the ongoing Islamophobic discourse. At the same time, countries like Oman and Saudi Arabia have also condemned the extremist remarks very strongly.

The Qatari government was the first to issue a very strong statement; saying it is expecting a public apology and condemnation of such remarks by the Indian government. Criticizing the comment, the statement read; “Allowing such Islamophobic remarks to continue without punishment constitutes a grave danger to the protection of human rights.“

And the ongoing condemnation and outrage are threatening India’s carefully cultivated relationships with the GCC that are both economically and strategically vital. In the past weeks, superstores in the Gulf nations were removing Indian products from their shelves. The hashtags, boycott of Indian Products, and anti-India tweets also trended on Twitter in many Arab countries for several hours.

The Raising Hindu Extremism in Secular India

The Indian constitution’s 42nd amendment made the country formally “secular” in 1976, but while PM Narendra Modi has been in office, Hindu nationalism has grown at an alarming rate.

Attacks on Muslims and Christians are frequent, and significant news outlets frequently present insulting and intolerable viewpoints regarding minorities.

To win over right-wing organizations like the Rashtriya Swayamsevak Sangh (RSS), a potent right-wing Hindu nationalist paramilitary outfit, Modi first championed Hindutva ideology.

His party renounced the socialist and secular policies adopted by his predecessors and embraced Hindu supremacism, branding it a “New India.“

But despite initial triumphs, Modi’s economic reforms slowed growth, contrary to predictions. Promises to create jobs did not come to pass, and the BJP’s demonetization plan handed him the death blow in terms of support.

And now, the growing Hindutva movement is jeopardizing India’s economic relationship with trusted allies like the GCC.

High Stakes on India’s Gulf Trade and Ties

Since the Modi government, the economic ties between India and the Arab state have improved significantly. And in the bid to gain an edge over China, New Delhi has strengthened its position in the Gulf via commerce.

India’s domestic politics can no longer be delinked from its international image and economic and diplomatic ties with other countries when so much is at stake.