Diplomatic woes: Why the Gulf matters for India

The controversy is seen as a blow to India's diplomatic relations as it comes at a time Gulf states and India look to significantly enhance their economic ties.

New Delhi, Jun 07: Controversial remarks by Nupur Sharma and Naveen Jindal, now suspended BJP leaders have triggered fury among the Gulf nations leaving the Indian government to do the firefighting.

At least 14 countries, including Kuwait, Qatar, Iran, Iraq, Saudi Arabia, Oman, the UAE, Afghanistan, Bahrain, Maldives, Libya, Jordan, and Indonesia have lodged official protests against India, describing the comment as 'insulting'.

The West Asian countries also denounced the insults of the Prophet Mohammad, and demanded an apology from the government.

Several media reports, also suggested supermarkets in Kuwait pulled out Indian products from their shelves in protest.

While in India, the opposition parties stepped up pressure for the arrest of the two BJP leaders and accused the BJP of denting the country's image at the international level.

The controversy is seen as a blow to India's diplomatic relations as it comes at a time Gulf states and India look to significantly enhance their economic ties.

Why Gulf matters for India

The Gulf nations like Saudi Arabia and Qatar have a good relationship with India. New Delhi imports crude oil and natural gas from these countries and exports pearls, precious and semi-precious stones; metals; imitation jewellery; electrical machinery; iron and steel; and chemicals to these countries.

In 2020-21, India imported goods worth USD 110.73 billion from the six GCC (Gulf Cooperation Council) nations. Its merchandise exports stood at USD 44 billion to these nations.

Gulf nations have a large number of the Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries.

These NRIs send a significant amount of money back home.

According to a November 2021 report of the World Bank, India got USD 87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations.

Trade with GCC nations:

Saudi Arabia: It was the fourth-largest trading partner last fiscal. Total bilateral trade has increased to about USD 43 billion in 2021-22 from USD 22 billion in the previous fiscal.

Qatar: India imports 8.5 million tonnes a year of LNG from Qatar and exports products ranging from cereals to meat, fish, chemicals, and plastics. Two-way commerce between India and Qatar rose to USD 15 billion in 2021-22 from USD 9.21 billion in 2020-21.

Kuwait: It was the 27th largest trading partner of India in the last fiscal. Bilateral trade has jumped to USD 12.3 billion in 2021-22 as compared to USD 6.3 billion in the previous financial year.

UAE: It was the third-largest trading partner of India in 2021-22. India's bilateral trade with the nation increased to USD 72.9 billion in 2021-22 as compared to USD 43.3 billion in 2020-21.

Oman: It was the 31st largest trading partner of India in 2021-22. India's bilateral trade with the nation has increased to about USD 10 billion in 2021-22 as compared to USD 5.5 billion in 2020-21.

Bahrain: Two-way commerce with India stood at USD 1.65 billion in 2021-22 as against USD 1 billion in 2020-21.

Besides, India's bilateral trade with Iran aggregated to USD 1.9 billion in 2021-22 as compared to USD 2.1 billion in 2020-21.

Will diplomatic row impact India's relationship?

Experts believe that the present diplomatic row over derogatory comments won't impact India's relationship with the Arab countries.

The reactions from West Asian countries were expected as derogatory comments about someone or religious leaders are bound to have such impact. At the same time, they understand the Indian government has nothing to do with the remarks and it was done by certain individuals.

It is natural that they hold the ruling party accountable at the end of the day. Hence, ambassadors were called and they have clarified the things satisfactorily.