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Summary

International Relations Class 17

## BENEFITS OF I2U2 TO INDIA (5:10 PM):

- This is the first time India is engaging in West Asia at a **plurilateral** **level(** generally4-6 member countries).
- India earlier engaged only in a bilateral manner in West Asia.
- India stayed away from West Asia politics to ensure energy safety and the safety of its diaspora.
- Expansion of scope for the India-USA cooperation beyond the Indo-Pacific region.
- This is crucial because India has traditionally opposed American intervention in the region.
- India has generally been apprehensive of the West's role in West Asia.
- Though the body claims itself as a geo-economic grouping, its geostrategic logic to counter China cannot be ignored.

## Challenges with I2U2:

- The rest three members are critical of Iran, and they might adopt an anti-Iran agenda through the platform.
- This could impact India's long-standing relations with Iran.
- Presently, I2U2 would enable India to build mutually beneficial economic partnerships with the other three countries without any adverse impact on India's strategic autonomy.

## INDIA SAUDI-ARABIA RELATIONS (5:30 PM):

## Importance of Saudi Arabia:

## I. Energy Security:

- Saudi Arabia is the second largest supplier of crude oil(18% to India; Iraq is the largest supplier.
- Saudi Arabia also supplies 30% of Indian LPG imports.

## II. Remittances & Diaspora:

- 2.4 million Indians live in Saudi Arabia which is 7% of the kingdom's population.
- India is the largest recipient of remittances from the kingdom.

## III. Trade & Investments:

- In the financial year 2022-2023, the bilateral trade stood at $52 billion which is 23% higher on a year-to-year basis.
- Saudi Arabia is the fourth largest trading partner of India and India is its second largest trade trade partner.
- During the September 2023 state visit by the Crown Prince & Prime Minister Mohammad Bin Salman( MBS), two points were discussed:
- I. The two countries discussed the possibilities of trading in local currencies.
- We signed a similar agreement with UAE and we are pushing for **de-dollarization**in BRICS.
- II. Explored the opportunity for cooperation in payment systems, including the acceptance of **Rupay Cards**in Saudi Arabia.
- Currency usability will largely benefit the Indian diaspora and Haj pilgrims.
- During MBS's visit in 2019, the kingdom promised to invest $ 100 billion in India.
- A trilateral project to establish the world's largest green field refinery to be built on the Maharashtra coast between **ARAMCO, ADNOC,**and Indian PSUs.
- Saudi will invest $ 50 billion of the $100 billion in the project -the **Raigad refinery cum Petroleum Complex.**

## Socio-Cultural Cooperation:

- Saudi Arabia is home to two of Islam's holiest sites- Mecca & Medina, so it is the leader of the Islamic world.
- Indis is home to the second largest Muslim population in the world after Indonesia.
- Hence, the socio-cultural importance arises.

## Strategic Importance:

- The two countries have a strategic partnership, cooperate in counter-terrorism, and have a common foreign policy agenda in Afghanistan.
- Both countries have repeated the need for inclusive government in Afghanistan which represents the " All Spectrum of the Afghan people".
- The two countries have also identified defense, energy security, space, and semiconductors as focused areas of cooperation.
- Saudi has assured India that it would remain a "Reliable partner" and exporter of crude oil supplies.
- Saudi recently joined the BRICS which hopes to restructure global governance models.

## India- Middle East- Europe Economic Corridor(IMEC)

## Rail & Port connectivity corridor:

- Member countries are the USA, Saudi Arabia, UAE, India and the EU.
- IMEC is being perceived as a counter to China's BRI.

## STATEMENTS BY PM MODI (6:00 PM):

- He described Saudi Arabia as " one of the most strategic partners to India".
- As two of the world's fastest-growing economies, our partnership is important for the stability of the entire region- global economic stability.

## Evolution of bilateral ties:

- The two countries have centuries-old economic and socio-cultural ties.

## Modern Cooperation:

- **2006-:**
- Saudi King visited India.
- The **Delhi Declaration** was signed.
- **2010:**
- Indian PM paid a visit to Saudi and the  **Riyadh Declaration** was signed.
- We entered into a **Strategic Partnership Agreement.**
- The above two declarations are the stepping stones of modern India-Saudi relations.
- **2016:**
- PM Modi's visit to Saudi was referred to as a **turning point** in our relations by our Ministry of External Affairs.
- He was also awarded the highest civilian honor- **King Abdulaziz Sash.**
- **2019:**
- MBS was on a tri-nation visit to India, Pakistan & China.
- India-Pakistan relations were at their lowest point in the backdrop of the **Pulwama attack.**
- The momentum of the relations was taken forward and he announced $100 billion in investments in India.
- The India-Saudi Arabia **Strategic Partnership Council(SPC)** was formed under **Vision 2030** of the kingdom.
- The Vision 2030 has been put forth by MBS with the primary aim of economic diversification.
- |  |
  | --- |
  | **Some reasons for the Vision 2030:**  - Saudi's apprehension after the **Arab Spring.** - **Arab Spring** refers to a series of anti-government protests that started in Tunisia in 2010 and spread to many other Arab nations. - The main reasons were human rights violations, corruption, poverty, unemployment, etc. - Regimes were changed in Tunisia. Egypt & Yemen - Much of the Saudi economy is dependent on fossil fuels which are finite. - The global interest in renewable energy is pushing Saudi to diversify its economic portfolio. |
- Under the vision, Saudi has envisaged forming SPC with 8 countries including India.
- India Saudi SPC comprises two main pillars namely:
- I. Political, Security, Social & Cultural Committee.
- II. The Committee on Economy & Investment.
- In September 2023, MBS visited India to participate in the **G 20 Summit**and then stayed back for a state visit.
- Recently, PM Modi and MBS co-chaired the first meeting of the India-Saudi SPC.
- The ties between the two countries are no longer limited to bilateral cooperation.
- The cooperation is also expanding to multilateral platforms like:
- Saudi Arabia has become a member of the BRICS and IMEC corridor.

## Major Breaks in India-Saudi Arabia relations:

- From bilateral to plurilateral.
- Cooperation of Afghanistan- both have called for a more representative govt.
- Cooperation on counter-terrorism.
- |  |
  | --- |
  | - Saudi Arabia supported Pakistan in fostering the Taliban. - Saudi Arabia, UAE, and Pakistan were the only three nations that recognized the Talian government in 1996. |
- Exploring local currency settlement of bilateral trade
- The USA was the regional hegemon and close ties between Saudi and the USA, so much so that Saudi Arabia has been under the security umbrella of the USA.
- In 1945, the USA guaranteed American security for the Kingdom in return for crude oil.
- The agreement has not ended officially, but we see considerable receding of the American umbrella.
- MBS denied American requests to increase oil production during the Russia- Ukraine war.

## INDIA-GCC COOPERATION (6:35 PM):

- In 2022, India and GCC signed an MOU to institutionalize an annual dialogue.
- India and GCC are to expedite negotiations for an FTA.
- GCC is India's largest trading partner block with over $150 billion in trade.
- GCC countries contribute to almost 30% of Indian oil imports and 70% of gas imports.
- GCC is a  major source of FDI into India- over $18 million in investments.

## Bilateral Issues between India & Saudi Arabia:

## I. Rising islamophobia in India:

- The annual prayer meeting of the **Tablighi Jamaat**was termed a **Super Spreader** during the first wave of the COVID-19 pandemic.
- That too when we saw other religious festivals and
- Derogatory remarks against Prophet Mohammad in India which UAE and Organization of Islamic Cooperation(OIC) criticized publicly.

## II. Saudi's ideological support for Islamic terrorism:

- The Taliban was trained in the **Wahhabi ideology**of the kingdom.

## III. Saudi-Pakistan relations:

- They are historical allies tied by a common theological bridge(Sunni Islam).
- saudi has traditionally supported the Pakistani view on Kashmir.
- |  |
  | --- |
  | - However, in the context of the abrogation of Article 370, Saudi opposed Islamabad's aim to use the platform of OIC to internationalize the issue. - Saudi in fact termed it an internal matter of India. |

## IV. Saudi's aggressive foreign policy in West Asia:

- It can be seen through steps like imposing an economic blockade on Qatar and engaging in a proxy war with Iran in Yemen.
- It damages regional stability which is against Indian interests.

## V. China in West Asia:

- China is a leading buyer of Saudi oil.

## VI. Indian diaspora:

- Indians there are subjected to restrictive visas, stringent labor laws, violation of human rights, absence of minimum wage provisions, etc. causing exploitation of Indian workers.
- However, these concerns are being increasingly addressed by the kingdom.

## INDIA UAE RELATIONS (7:00 PM):

- **2015:**
- A strategic partnership agreement was signed between India and UAE.
- This was a major event as UAE has traditionally supported the Taliban in 1996 and Pakistan over Kashmir.
- **2022:**
- We entered into a Comprehensive Economic Partnership Agreement (CEPA).
- This was the first FTA signed by the Modi government in 9 years.
- It is the first CEPA ever in the UAE, while India has CEPAs with Japan, South Korea, etc.
- CEPA entails trade in goods and services.
- So it is comprehensive in nature against many of the **Early Harvest Agreements(EHA)** or interim agreements concluded by India.
- EHA is an interim agreement till both sides conclude in a comprehensive manner.
- It was negotiated through a fast-track three-month negotiations between the two countries.
- We have been negotiating such an agreement with the EU since 2007, the UK after Brexit 2020, the USA under Trump, etc.
- It caters to India's concerns such as **stringent rules of origin** clause which would prevent goods from other countries from entering into the Indian market using the route of UAE.
- |  |
  | --- |
  | **Why India is so serious about Strict Rules of Origin?**  - The Indian manufacturing sector is still not fully developed. - If India has an FTA with a nation with strong manufacturing( China), the Indian market will get flooded with Chinese goods and Indian firms will face high losses. - It is possible that China will sign an FTA with the UAE, and first Chinese goods will enter into UAE and then Chinese goods will enter into India under the India-UAE CEPA. - Even this condition will be bad for Indian manufacturers. - This situation will be prevented if the India-UAE CEPA has strict rules of origin. |
- CEPA also has an **Automatic Trigger Safeguard Mechanism (ATSM)**to protect our nascent manufacturing sector.
- It excludes provisions such as the investor-state dispute settlement mechanism, with which India has had problems.
- In July 2023, PM Modi visited the UAE, and **two MOUs were signed:**

I.

## Local Currency Settlement System(LCSS)

to promote the use of Rupee and Dirham bilaterally.

- It would enable payments in the respective domestic currencies which would in turn help in the development of the **Rupee-Dirham foreign exchange market.**
- It would optimize transaction costs and settlement time for transactions including remittances between India and UAE.
- It would also avoid **exchange rate risks**- when a third currency is used for bilateral trade(US dollar).
- It would facilitate a more competitive price discovery and hence promote trade.

II. It links Indian UPI with the Instant Payment Platform (IPP), the UAE's counterpart.

- It would help safe and effective cross-border fund transfers.
- Strategic cooperation in fields of counter-terrorism, extradition treaty.
- India acquired the **Duqm port of Oman** for dual-use- civilian and naval.
- ![](https://static.toiimg.com/thumb/imgsize-23456,msid-62909848,width-600,resizemode-4/62909848.jpg)
- ![](https://timesofislamabad.com/digital_images/extra-large/2018-09-02/chabahar-port-can-handle-50-million-tonnes-of-cargo-while-gwadar-stands-at-400-million-tonnes-1535911084-7647.jpg)

## India UAE Economic relations:

- UAE is India's third-largest trading partner and second-largest export destination in financial year 2022-2023.
- India is the UAE's third-largest trading partner.
- UAE is among the top five investors (source of FDI in India).

|  |
| --- |
| - Recently we are seeing some divergences between UAE and Saudi Rabia, despite the fact that both monarchies are related. - This was seen when the UAE signed the Abraham Accords with Israel |

## INDIA-IRAN RELATIONS (7:35 PM):

- **Importance of Iran for India:**

## I. Connectivity:

- We have envisaged "Prosperity Through Greater Connectivity".
- Iran is essential to develop connectivity with its extended western neighborhood- Afghanistan and Central Asia.
- Chabahar port and INSTC are important connectivity projects.
- ![](https://www.researchgate.net/publication/343796661/figure/fig3/AS:927017725857792@1598029657430/Map-of-International-North-South-Transport-Corridor-INSTC.ppm)

## II. Geopolitical/ Geostrategic importance:

- To counter Chinese String of Pearls.
- To cooperate with respect to Afghanistan.
- It was Iran who led the **Regional Security Dialogue****at the NSA level** over Afghanistan.
- Both want inclusive government and peace in Afghanistan.

## III. For counter-terrorism:

- Iran is an important partner against groups like ISIS, Al Qaeda, etc.
- It is an important geo-political actor responsible for the overall stability of West Asia.
- |  |  |
  | --- | --- |
  | **Iran's Proxies/Supported Groups** | **Country** |
  | Houthi Rebels | Yemen |
  | Hezbollah | Lebanon |
  | Hamas | Palestine |
- Iran has a **Quds**force for extra-territorial wars.
- The USA needed the cooperation with Quds against ISIS.

## Energy  Security:

- Prior to the American Sanctions in 2003, Iran was among the largest crude suppliers to India.
- It has the world's second-largest reserves of natural gas.

## Evolution of India-Iran relations:

## Phase I- 1950-1979:

- A treaty of friendship was signed with Iran in 1950.
- Historically, we have shared close civilizational ties.
- We used to share land borders before partition.
- The relations were overall tepid during **Cold War** politics.
- Monarchial Iran was in an American camp while India was a leader of the NAM

## Phase II- 1979-1990:

- After the **Islamic Revolution in 1979, the** monarchy was abolished and Iran became a theocratic republic.
- Consequently, Iran came out of the American camp.
- It was expected that India-Iran relations would improve, but the opposite happened.
- Since it became a theocratic state, it wanted to assume the leadership of the Islamic world and therefore became a more ardent supporter of Pakistan over Kashmir.
- India and Iran were hence pulled apart.

## Phase III- 1990-2003:

- After the Soviet withdrawal from Afghanistan in 1989, there was civil war and instability in Afghanistan.
- Afghanistan became the ground for sponsoring cross-border terrorism in India.
- Since Afghanistan shared borders with Iran, Iran was careful regarding instability.
- India and Iran grew closer with the Taliban taking over Kabul.
- Both had common objectives in Afghanistan.
- This phase saw improvement in bilateral relationships.
- **2001:**
- The then-Indian PM visited Iran for the **Tehran Declaration.**
- **2003:**
- The Iranian President was invited as a chief guest to Indian Republic Day celebrations.
- The Iran-Pakistan-India(IPI) was envisaged

## Phase IV- After 2003:

- Iran's secret nuclear weapon program came to light and since then the USA began to interpose India-Iran relations.

## The topic for the next class is the continuation of India-Iran relations