India's Growing Role in the Gulf Implications for the Region and the United States


Tihar Jail
Oct 2, 2009
India's Growing role in the Gulf Implications for the Region and the United States

The major countries of Asia are looming as important regional players in the
Middle East. A primary reason for the growing Asian footprint is economics, but
it is more than simply the need for petroleum and natural gas that draws in the
Asian states. They are attracted by opportunities for consumer sales and, in the case
of South Asia, the export of millions of laborers to build the emerging city-states of
the Arabian Peninsula. Thus, the paradox is that despite the threat of new conflicts,
billions of dollars have been invested in the region and vast wealth accumulated and
spent only a few hundred miles from ongoing military conflict.
The financial crisis, which began in earnest in September 2008, has raised
the prospects for a prolonged global recession, which will have a negative impact
in most economic activities, including the value of energy exports, investments,
tourism and consumer sales. Nevertheless, many observers believe that, in the long
run, the global economy will recover and the economic trend lines that were in effect
before September 2008, which showed growing economic activity between Asia
and the Middle East, will be resumed. A number of traumatic events could upset
this assumption including a new major Middle East war, severe social and political
chaos in the region, Asia or even Europe and the US, or a total re-evaluation of the
models of economic growth that are predicated on transparency, open markets and
relatively free trade.
The depth of Asia's involvement in the Middle East can be measured in a
number of ways, including the projected increase in the amounts of energy flowing
east to Asian markets over the coming decades, the value of Asian exports to the
Middle East, financial investment by Asian and Middle East countries in each
others' development, including construction and infrastructure, the number of
tourists in both directions and the number of Middle Easterners enrolling for
higher education in key Asian countries.
Perhaps the most visible element of the growing Asian-Middle East partnership
concerns expatriate workers in the GCC countries. Over 4 million Indians are to be
found at every level of occupation on the Arabian Peninsula. In addition to Indian
workers, millions of others come from South Asian countries. Without Asian labor,
the oil rich economies of the Gulf would be in deep trouble, and without the allpowerful
military presence of the US in the Gulf, they would be easy prey to regional
predators, of whom Saddam Hussein was the classic example.
It is the emergence of China and India as regional superpowers with
an increasingly global outreach that has had the greatest impact on the region.
In different ways, India and China will pose challenges and opportunities for the
current regional hegemon, the United States. Questions about energy access, the
security of the Arab Gulf, military cooperation, arms sales, oil and gas pipelines and
energy security all need to be considered. These issues must be analyzed against the
historical background of past Indian and Chinese influence in the region. India's
direct involvement in the Middle East, especially in the Gulf, is more extensive than
China's, due to proximity. But for the future, as China expands its geo-economic
reach westward into Central Asia and Pakistan with new infrastructure projects, as
well as increasing trade relations, it too will become a more important player.
India and China have achieved a remarkable diplomatic presence in the
Middle East, and unlike the United States or the former colonial powers (Britain,
France, and Italy), they have made very few enemies and have managed to build
good working relationships with all countries including close ties with Israel. Both
countries are engaged in Mid-East peacekeeping operations. China's participation
in Lebanon within the framework of the United Nations Interim Force in Lebanon
(UNIFIL) began officially on April 9, 2006. India has a much longer record of
post World War II Mid-East peacekeeping, beginning with its participation in the
United Nations Emergency Force (UNEF) established in 1956 to monitor the Sinai
desert. India has peacekeeping forces in UNIFIL, numbering 672 troops and staff
officers and provided two of the last four commanding officers, but has not added
any forces recently. Although India has historically had a more visible presence in
the Gulf than China, it is only recently that is has begun to demonstrate power and
influence. India has so far not had a major arms supply relationship with the Middle
East countries, except Israel, but has been cooperating on a military-to-military
basis with all of the small countries in the Gulf in recent years.
To explore the Indian perspective in more depth, the Gulf Research Center
(GRC) and The Nixon Center co-hosted a workshop at the GRC's headquarters
in Dubai in November 2008 on "India's Growing Role in the Gulf." Three papers
by Indian scholars were prepared for the meeting, which are published in this
monograph. The Nixon Center's participation was made possible by a generous
grant from the Carnegie Corporation of New York.We intend to organize a second
workshop in 2009 on "China's Role in the Middle East."


Tihar Jail
Oct 2, 2009
India's Economic and Political Presence in the Gulf: A Gulf Perspective
Samir Pradhan
Indian presence in the Gulf region is civilizational, which has developed into a
vibrant relationship over the years, primarily based on a complementary abundance
of entrepreneurial skill and wealth. With the emergence of India as a large economic
power in recent years and simultaneously the Gulf region witnessing spectacular
economic growth, economic trends are reinforcing mutual interdependence. While
India's economic presence in the region has transformed from barter exchanges
between merchants and Indian human capital foiling the Gulf 's oil-industrial
development, India's political presence has remained more or less subdued.
However, in the changing post-Cold War geopolitical environment and converging
security landscape spanning Afghanistan to the Arabian Gulf, India has become
strategically important for the Gulf countries as a major geopolitical player. This
paper analyzes Indian presence in the Gulf region and makes an assessment of the
emerging Gulf-India ties from the Gulf regional perspective.
For centuries, the Gulf region1 occupied a strategic position on the sea routes
between the Fertile Crescent2 and India, a center for the international pearl trade,
and at various times, a crossroads for regional trade between the Crescent and the
old Silk Route. Indian presence in the Gulf region predates that period as far as
the third millennium B.C., when trade and travel flourished between the erstwhile
Indian kingdoms and the Arab world. Archaeological evidence about the great
Indus Valley civilization period confirms this movement of peoples between the
regions. The historical legacies of international trade between the two regions points
to barter exchanges of textiles and spices in lieu of dates, pearls and semi-precious
stones. More importantly, during this period, the Indian business community,
especially wealthy individual merchants, set up their base in the region.
The major economic thrust came after the discovery of oil in the region and
the subsequent economic development of the desert economies propelling imports
of goods, services and manpower from the neighboring Asian region. As large
numbers of people from India migrated to the Gulf in their quest for wealth and
prosperity, so did the business communities in their effort to serve these expatriate
consumers as well as the wealthy import dependent Arabs.
The succeeding periods witnessed phenomenal migration of labor from India as
the oil-fueled development process in the Gulf gathered momentum. Simultaneously,
individual business houses from the subcontinent started to expand their base through
partnership with Gulf business communities. And the legacy continued, although
the pattern of economic engagement has transformed considerably over the years. In
essence, the Indian community has played a pivotal role in the transformation of the
Gulf economic scenario from primeval commercial exchanges to high-tech based
corporate practices and innovative consumer services.
The changed economic and geopolitical environment in the aftermath of 9/11
and the constrained business environment for the Gulf countries in the Western
world intensified the Gulf 's economic engagement with Asia in general and India
in particular. Asia's emergence as a global economic power and India's increasing
global economic clout also considerably changed the business patterns of the Gulf
countries. While the Gulf 's economic engagement with India has grown to the
current stage of intensive interaction, India's political presence in the Gulf remains
subdued. This has been primarily due to mutual negligence, domestic constraints,
international power relations and inward looking policies of past eras. However,
with a changed global geopolitical environment and increasing geoeconomic
interdependence, the Gulf region considers India not only a strategic economic ally,
but also a potential 'bridging power' that can play a constructive role for regional
peace and stability.
This paper explores India's economic and political presence in the Gulf region
and analyzes trajectories of Indo-Gulf relations from ancient times, through the
pre-oil era, to the present day's burgeoning ties. Highlighting India's invaluable
contribution to the overall transformation of Gulf desert markets into contemporary
and rapidly industrializing economic zones, this paper will attempt to provide further
research about a dimension of the Mid-East-Asian relations hitherto untouched by
scholars. This in no way belittles the sincere acknowledgement by Gulf States about
India's significant contribution to the region's economic development; rather possibly,
it could provide a knowledge platform to further boost the Gulf 's civilizational ties
with India. The remaining part of the paper will consist of three broad sections:
Section 1 gives a brief historical account of Gulf 's embryonic ties with India,
primarily facilitated through commercial exchanges and the settlement of Indian
business communities. Section 2 deals with India's economic presence in the Gulf
region through three dimensions – labor, commercial and business establishments,
and growing trade and investment linkages. Section 3 analyzes India's political
presence in the Gulf region from the perspective of changing international relations
and the Gulf region's view about India as a potential global power.
Gulf and India: The Early Globalizers
Authoritative research shows Gulf Arabs and Indians were early globalizers,
both complementing each other with wealth and skills, and in the process creating
the embryo of a globalized world market (Chanda 2007). Gulf-India trading
connections which began over 3,000 years ago have since blossomed into a global
network with India at its hub. Arab navigation and trading enterprises opened India
to the wider world, and the Arab quest for knowledge in early Islam helped transfer
Indian learning to Europe and vice versa. Arab traders in search of exotic food,
cloth and luxury items ventured out by boat and camel caravans, thereby developing
barter trade. Ptolemy Philadelphus, (285-246 B.C.) the king of Egypt who had sent
an envoy to the Mauryan court showed off his Indian connections by displaying
"Indian women, Indian hunting dogs, cows, Indian spices carried on camels and
many other strange objects in the royal possession" (Chanda 2008). In the same
period, adventurous Indian traders sailed up to the island of Socotra (based on the
Indian name Sukhtara meaning "Happy Star") off the coast of Yemen. The soldiers
of Alexander the Great were surprised to find a colony of Indian traders on the
island named as farj al-Hind or 'frontier of India.'
Recent archaeological discoveries in the ancient Red sea port of Berenike
provide evidence of Indian presence in the Egyptian part of the Roman Empire.
This early civilizational trading links emerged primarily due to the development
of monsoon driven sea trade. The Roman historian Strabo has documented that
merchant ships from Egypt carrying tin, lead, wine, coral, glass, gold and silver
coins used to ferry their cargo almost everyday to India - a route that was possible
due to seasonal monsoons.
By the 10th and 11th century, Arab traders and Indian artisans had set up a
rudimentary production supply chain involving ivory. Arab traders along the
African coast exported large quantities of elephant tusks to India, where artisans
carved them into jewelry, ornaments and religious icons for export to China and
the Mediterranean. It is argued that the most lucrative item in Indo-Arab trade was
the horse, which was in great demand in India by Gulf Kingdoms seeking to build
a cavalry. It was reported that each Arabian or Central Asian horse was sold for 220
dinars of red gold during the 13th and 14th centuries. Moreover, during this period,
more than 10,000 horses were exported to India annually from ports and trading
centers in and around the Gulf alone (Chanda 2008). There was also a famous cloth
fair near Mecca that used to be the hub for Indian textile industry to market their
products with European merchants with Arab traders mediating.
With the increasing trade volume and the need to wait for several months till
the arrival of the monsoon, Arab traders started to settle on India's Malabar Coast
in places such as Calicut, Cranganore and Quilon. The local population provided
them with warm hospitality, treating the Arab traders as harbingers of prosperity,
and calling them "Mapilla" or "sons-in-law." The succeeding period witnessed
migration and inter-marriage with locals and a growing influence of Islam. These
interconnections deepened with the Arab conquest of the Sind which opened the
door for even more intense exchanges between Gulf and India. Over this long stretch
of history, many Indians visited and settled in the Gulf and the West Asia region.
This process continued until the presence of the British colonial administration
saw increasing trade and manpower exchanges between Gulf and India and finally
culminated with a mass migration of Indians to the Gulf in search of fortune and
Gulf Arabs flying to India for medical care as well as leisure purposes3. This created
a new chapter in the Gulf-India millennial relations.
Economic Presence
Gulf 's Oil Development and India's Manpower Bonanza
The discovery of oil and manpower shortages in the Gulf precipitated
phenomenal labor migration to the region. Given the population pressure and
bleak economic prospects at home, Indian laborers flocked to the Gulf in search of
employment and higher wages. The presence of Indian laborers dates to 1935 when
BAPCO imported labor from India. The labor roster for October 1935 included
some 45 skilled and semi-skilled Indian employees (Secombe 1982). Labor
demand in Bahrain, Kuwait and Qatar grew rapidly and the call for Indian labor
supply increased thereafter. Meanwhile, the provisions of the Indian Emigration
Act made the export of unskilled Indian workers illegal. As documented, BAPCO
was even prepared to take on the responsibility of and pay guarantees for illegal
immigrants from India. In July 1936, BAPCO opened a recruitment office in
Bombay to adopt indirect recruitment policies – BAPCO invited emigrant
employees from India who defrayed their own expenses to Bahrain and employed
them there.
By October 1937, 236 skilled/semi-skilled Indians were employed in BAPCO
and the number of accompanying dependants had also grown significantly. It has
been argued that the British were instrumental in promoting the employment of
Indians in order to suppress the Persian claim of sovereignty over Bahrain (Secombe
1982). Simultaneously, there was increasing demand for Indian products as reflected
in the survey conducted by Weightman, the then political agent in Bahrain. There
were nearly 215 shops in Manama Bazar occupied by Indian traders. By 1941,
the community was large enough for the British to consider the establishment of
an Indian school for the education of children of Indians employed in Bahrain.
The situation was the same in other Gulf countries where the number of Indian
laborers was increasing day by day. In 1938, Thornberg, the Vice-President of
California Arabian Standard Oil Company (SOCAL), traveled to Bombay with
the intention of recruiting Indians of a better type for employment both in Bahrain
and Hasa in skilled work which, so far, is beyond the capacity of the local Arabs.
'Indians' dominated the monthly paid (largely skilled and semi-skilled) labor force
in Bahrain, Qatar and Saudi Arabia. In fact, Ibn Saud insisted on equal payment for
Indians and Arabs employed in Dhahran by Aramco.
In 1936, large numbers of Indian traders were present in Kuwait and the Shaikh
of Kuwait even expressed the desire to keep them out because of the apprehension
that Indians are able and capable of living more cheaply than his own people
and their business acumen may drive many Kuwaiti merchants out of business.
Consequently, they proposed to limit the number of Indians entering Kuwait and
decreed that no Indian could carry on business without an equal Kuwaiti partner.
However, such steps were soon overlooked when the Kuwait Oil Company (KOC)
increased its employees from 1,900 in January 1947 to 18,000 by January 1949,
of whom 4,053 were Indians. The majority of Indian workers (3,269) were skilled........

follow the above link in post one to read whole 84 page pdf file....

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