Ladies and gentlemen,

The Arab uprisings, and in particular the current West Asia crises in Iraq, Israel-Palestine, Libya and Syria have continued to challenge the traditional actors and alliances in the region. In the emerging order, there will be greater devolution of powers to the regional actors, although it is unclear how much space there will be for outside players, which will, however, continue to have leverages. Within this framework, is there scope for India to play a more strategic role? Undoubtedly, any instability in this region affects our vital interests directly.

I would like to emphasize on three points: one, to define our stakes in the Gulf & WANA region; two, to elaborate on the developments and cross-cutting issues in the region; and three, to seek to outline our efforts to promote our interests within the broader regional context.

This region is an essential part of our extended neighbourhood. Civilisational links remains an area of critical importance in our proximate neighbourhood. The Gulf region remains the largest trading partner for India. Bilateral trade with the Gulf was $181.4 billion (2012-13), and $22 billion (2012-13) with WANA. India’s top trading partners in the region were UAE ($ 74.72b), Saudi Arabia ($ 43.19bn) and Iraq ($ 21.35 bn).

The Gulf provides over 60% of our oil & gas requirement. Saudi Arabia and Iraq are largest suppliers of oil to India, and Sudan/South Sudan are other important oil suppliers. The region is a major source of phosphatic and other fertilizers (Algeria, Tunisia, Morocco) and thus contribute to our food security.

There are about seven million Indians who live and work in the Gulf, and another 45,000 Indians live in the WANA region. India receives annual remittances of over $30 bn from the region. The region is also a potential source of sizeable investments as India has the capacity to absorb large capital infusion, especially for infrastructure projects. The region is also a significant platform for operations by Indian companies.

The region is an important partner for India in counter-terrorism, intelligence sharing, homeland security, controlling money laundering, small arms trafficking, smuggling and financing of terror activities besides in anti-piracy effort.

The on-going turmoil in the Arab region is rooted in the Arab Spring, which began with popular and widespread unrest in Tunisia in December 2010, and rapidly spread to other countries in the West Asia, North Africa and the Gulf regions. In particular the after effects of the so-called Arab Spring and the spiralling internal violence in Syria and Iraq, have created a climate of political uncertainty in the countries in the region, and can have serious regional and global repercussions, which would also be felt directly by India. However, three years after the “Arab Spring”, the earlier exaggerated expectations of progress towards democracy have turned out to be misplaced. The initial optimism of democratization and regime change, has given way to serious concerns about the aftermath of the much-hyped revolutions. The “Arab Spring” has impacted the Arab World in different degrees – the first group include countries which saw a series of strong, popular and mass protests leading to regime changes such as Tunisia, Libya, Egypt and Yemen; the second tier of countries saw demonstrations that were contained by the ruling regimes through targeted but limited political and economic reforms such as Kuwait, Saudi Arabia and Oman, or by stern actions against protestors and demonstrators such as Bahrain and Jordan. The third group includes Qatar and UAE, which are yet to witness any such protests and have used this as an opportunity to enhance their regional influence.

The regional strategic balance is in flux, with Iraq perceived to have come under Iran’s sway, and divisions within GCC (regarding Syria and the region), evident through the withdrawal of the Ambassadors of Saudi Arabia, UAE and Bahrain from Qatar.

Religious extremism has become vastly more pronounced (AQ, ISIS, and Salafists). Large number of jihadi fighters, from more than 80 countries, have joined the conflict in Syria. Given the recent ISIS activities, Syria and Iraq are likely to shift from being a ‘destination’ for Islamic extremism, to become the newest breeding ground for extremism. Militia infighting in Libya has seen Islamists pitted against tribal and pro-democracy rebel groups, thus threatening regional stability. The easy mobility of extremists and rising number of foreign jihadis in the region has increased fears of the possibility of the spread of radicalism in the home countries of foreign fighters.

The Shia-Sunni divide has been exacerbated by the recent events. There has been a rise in sectarian killings in Syria, Lebanon, Turkey, Iraq, Iran, Libya, and even in the GCC. These developments may have implications for Gulf unity and the stability of the WANA region.

There are clear signs of a rivalry between Saudi Arabia and Iran and quest for pre-eminence in the region. Both countries have been at the forefront of the regional jostling for influence through a proxy war in Syria. Saudi Arabia has increasingly asserted itself in the region, given the earlier US resistance to intervene in Syria, the stalemated MEPP, and the US’ potential rapprochement with Iran.

Saudi Arabia and Israel are particularly suspicious about the outcome of Iran & P5+1 nuclear negotiations. For Saudi Arabia, the reasons are theological and geo-political. For Israel, there are issues of national/regional security: the Iran-Hezbollah-Syria axis and pressure for results on MEPP. If Iran acquires nuclear weapons, it is possible that Saudi-Arabia will enhance its defence engagement with Pakistan for nuclear technology. We are hopeful that the negotiations will lead to a satisfactory permanent deal which will ease tensions in the region.

Recent conflict in Gaza resulted in large scale civilian casualties. This has put additional pressures on the region. This is compounded by lack of concrete progress on the peace talks which ended on 29 April 2014. Any outcome of the ceasefire negotiated in Cairo will ultimately have to be linked to the larger issue of comprehensive resolution of the Palestinian issue.

An apparent shift in the US role, perhaps through eroded credibility in the region is increasingly evident. Its inability to bring about a durable ceasefire after the recent conflict in Gaza, failure to stop expansion of Israeli settlements in the occupied territories, lack of a comprehensive and effective policy on Syria, disinterest in solving the ongoing violence in Libyan, and its prolonged engagement in Iraq and Afghanistan without being able to restore peace and stability, coupled with domestic factors of decreasing dependence on Middle East oil, has created doubts about its commitment to the Region. But re-shifting of its focus on Syria and Iraq, means that it remain important for regional stability.

Russia has attempted to re-engage with the Middle East, and has gained in appeal as a counterweight to the West. Its positive involvement in Syrian CW deal; recently concluded defence contracts with Egypt, Iraq and reportedly with Saudi Arabia and WANA countries reinforce this perception. However, presently Russia seems preoccupied with Ukraine and its ability to influence events in the West Asia Region is limited, except in Syria.

Chinese aversion to chaos may prevent it from seeking a more prominent political role. But it has embarked on an aggressive economic push in the region. Increased dependence on Middle East oil may result in greater Chinese naval presence in the region in years to come.

Qatar has moved away from its earlier policy of punching above its weight in the region, especially with the ouster of the Muslim Brotherhood (MB) led government in Egypt, and continued tensions with Saudi Arabia.

Turkey has toned down its earlier foreign policy focussed on promoting Political Islam, in its quest for a greater regional role. However, with political setbacks and growing internal challenges due to large influx of refugees and criticism from abroad for allowing jihadis to use its territory for movement into Syria, its ambition has been hit hard.

Egypt will continue to be a principal regional actor, although it has been chastened by the developments in the last three years. But it has the critical mass to get back into an institutionalized regional process as an important player.

On-going conflict in Syria, has now reached a stalemate. The conflict has resulted in about 192,000 deaths, 2.9 million refugees and 6.5 million Internally Displaced Persons. Two rounds of the Geneva II talks ended inconclusively, and no further talks have materialized thereafter. The UN–Arab League Joint Special Representative, Lakhdar Brahimi, has resigned following the stalled talks between the government and the opposition. The Syrian regime held elections in early June, whose legitimacy was called into question, as elections were limited to areas controlled by the Syrian regime. Western reactions to the elections have been negative, corresponding to the belief that elections would stall any progress made between the government and opposition. Proxy war is being fought between regional powers, in Syria; the West, Saudi Arabia, Qatar & Turkey on the side of the opposition and Russia, Iran & Hezbollah on the side of the Syrian regime. Involvement of jihadi groups like the Islamic State in Iraq and Syria (ISIS) and infighting between the rebel groups has led to a ‘civil war within a civil war’.

A perceived refocus of ISIS from Iraq to the adjoining territories in Syria, is evident through the ISIS seizure of Tabqa air base in Raqqa province on 24 August 2014 thus ending the Syrian security forces’ presence in Raqqa province. There are reports of US contemplating air strikes on ISIS targets in Syria, with or without Syrian government’s consent. The US may seek the support of its NATO allies and friendly countries like Australia assistance in carrying out air strikes but genuine cooperation from the regional allies is still doubtful. The government has made partial gains in Syria through local ceasefire agreements with rebels. Now there are reports that USA and Saudi Arabia intend to provide Sunni rebel groups, especially the Free Syrian Army, with MANPADs & anti-tank missiles, and train the combatants of the moderate opposition groups.

ISIS surge in Iraq is the extension of extremism and instability into Iraq. ISIS has taken over swathes of northern Iraq since 08 June including important cities such as Mosul, Tikrit, Tal Afar, Baiji etc. Atrocities against the minority civil population in Sinjar and other places has no parallel and has caused revulsion. Sectarian blame game continues between Iraq on the one side and Saudi Arabia and Qatar on the other. Reported preparations of Hezbollah mobilizing about 30,000 fighters for Iraq in another concern for regional security. India has huge stakes in Iraq. Iraq is 2nd largest oil supplier to India. India is concerned over sectarian spill over from Iraq. There are estimated 15,000 Indians at present living in Southern Iraq and the Kurdistan region of Iraq. India has completed evacuation of 5,400 Indian nationals and there are 41 Indians still in ISIS captivity in Mosul.

The ongoing efforts of Egypt to broker sustainable ceasefire, supplemented by UN, US, Qatar and Turkey is a positive development. There is an open ended ceasefire currently in place since August 26. The terms of the proposed ceasefire are to include (i) an easing of the blockade by opening all crossings to Gaza, and (ii) allowing reconstruction of damaged infrastructure and the entry of materials needed for reconstruction. The two sides are, after a month, to begin talks on Hamas’ demands to build an airport and seaport in Gaza. The ceasefire terms are along similar lines as agreed during the 2012 ceasefire between Hamas and Israel, but developments need to be watched carefully on the ground.

India provides economic/technical assistance of about $30 mn to Palestine. India has helped in setting up of IT centres, vocational training centre, schools, hospital/rehabilitation centre and recreation complex in Palestinian territories. India supports durable ceasefire between Israel and Palestine and has has expressed deep concern over escalation in violence in Gaza, loss of civilian lives and damage to property. External Affairs Minister has stated (21 July) that there is no change in India’s policy of continued strong support for Palestinian cause while maintaining good relations with Israel. This stance was also reiterated at UNSC Open debate on 22 July 2014 and India also voted in favour of Palestinian position at UNHRC on 23 July.

Intensified militia warfare between Islamist and pro-government forces in Tripoli and Benghazi is continuing since mid-July 2014. Oil infrastructure has been severely damaged. Over 650 people have been killed and Benghazi has been declared as an “Islamic Emirate” by Al-Qaeda linked Ansar Al-Sharia. There have been reports of air strikes on Islamist militia by Egypt & UAE on 23 August 2014 and takeover of Tripoli airport by Misrata rebels. Situation is extremely fragile having severe implications of regional spill over. UN, US, major EU and Arab Missions in Tripoli have been closed. Indian Embassy is functional with reduced staff, although decision has been taken to relocate Embassy personnel temporarily to Djerba in Tunisia.

India imported US$ 1.7 bn worth oil from Libya in 2012-13. Investments by Indian companies like BHEL, OVL, Punj Loyd, Unitech, KEC, Shapoorji Pallonji, etc in Libya is around US$ 4.5 bn. India has offered support in establishing democratic institutions, police training and capacity building and the Indian community in Libya was estimated to be about 6,000. India evacuated its nationals through land, sea, air routes during the turmoil. Around 3,000 Indians still remain in Libya, who are reluctant to leave.

Policy Options for India in the Gulf & Middle East:

Unprecedented changes in West Asia have compelled us to question our traditional assumptions and role. We are very willing to consider new options, in a realistic manner, and hence the need for careful strategizing. India, if required, given its democratic background, principled position of non-interference in internal affairs of other countries and, its non-prescriptive foreign policy, can provide political support on issues deemed of common interest in the West Asia. It can put forward alternative solutions facilitating regional take-aways for regional problems, support societal and institutional mechanisms and offer capacity building assistance – that are seen as less partial than the perceived methods of the West or even Russia and China in the region.

India is not in the business of exporting democracy. Although India is a robust practitioner of democratic pluralism and religious moderation, we don’t believe in intrusive prescriptive diktats. At the same time, India needs to be realistic about its leverages as well as limitations. Vice President of India has stated that “India has limited leverages but unlimited interests” in the region. Many countries in the region have expressed a desire for India to play a more active role in the region. We should be ready for that, but with adequate preparation.

India has maintained its policy of supporting a Syrian-led, political and non-military solution to the Syrian conflict. In view of our non-prescriptive stance on the resolution of the conflict, India participated in the Geneva 2 conference held in Montreux on 22 January 2014. Our support for the elimination of Chemical Weapons (technical as well as US$1 million financial pledge), and $2 million towards humanitarian assistance, has given us good political mileage. India has offered assistance in implementation of any agreement between government and opposition.

While strengthening high-level government to government contacts, it would be useful to have discreet contacts with key members of the opposition. This will ensure that our strategic interests in Syria and the region are not affected irrespective of the composition of the government in place.

Important fall out of the Syrian conflict has been the intensification of Shia-Sunni fault lines across the region (proxy war between Saudi and Iran) with potential implications for India. We should stay out of sectarian alliances, while remaining prepared for any fundamentalist backlash coming from the region. The threat of the spread of extremism to the region, and the possibility that Syria (and now Iraq) could supplant Pakistan as the base for Al Qaeda and affiliates is a heavy blow to the Western backed Syrian Opposition, and of serious concern to India, the wider region and international community. There have been some reports of a few Indian jihadi fighters involved in the Syrian conflict. We need to be careful about such a development.

Defence and security cooperation on counter-terrorism, intelligence sharing, piracy, money laundering, small arms smuggling, financing terror activities etc. is emerging as increasingly important element in our ties with regional countries. Despite the so called Pakistan factor, considerable space has emerged for us to project our interests and point of view to our partners in the region. This needs to be leveraged to our advantage.

So far, despite challenges of the regional flux and sectarian divide stemming from the Syrian conflict, our bilateral relations with virtually all countries of the region have been progressing smoothly and we have managed to insulate our core interests from the negative fall-out of regional developments.

We should strengthen our relations with all the regional players. Ties with GCC countries in particular, given our core energy and security interests, are valuable and need to be solidified on multiple fronts. At same time, we will need to consolidate ties with Iran and Israel, at different levels.

In parallel, we should maintain our engagement with the US which still remains important, bilaterally as well as for regional stability.

Given our large Muslim population, we will need to take a principled position on the ongoing developments in Syria and Iraq, calibrated according to our Constitution, cultural, political and secular values and based on our time-tested practices of peace and non-violence, respect for all peoples and communities. Our approach towards countries experiencing Arab Spring should not be misconstrued as being partisan or sectarian.

We can offset political unpredictability in the region through greater economic engagement with all the countries. While the regional trade volumes have increased, considerable untapped potential remains and more thorough and integrated business approach is needed. Considerable potential for use of diaspora to lobby for India’s political and economic interests exists. It needs to be communicated appropriately that “old order neutrality” in a changing and unpredictable environment does not mean absence of decision-making, lack of leadership or political passivity.

In conclusion I would say that, India attaches high priority to its economic, political and security relations with the countries of the West Asia. These relations are poised to grow, with increasing realisation of the existing enormous potential on both sides – despite the prevailing challenges, which will need to be tackled strategically.

Jai Hind.