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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( generally 4-6 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.

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.

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