Modi’s Agenda 2.0 for the Middle East

The resounding re-election of Prime Minister Narendra Modi is a blessing for India’s relations with the countries of the Middle East. With Sushma Swaraj not contesting in these elections, India will be looking for a new External Affairs Minister, but Modi’s imprints will be more pronounced than before.

During his first term, Modi had invested considerable political capital, time and resources in cultivating critical players in the Middle East, namely, Saudi Arabia, United Arab Emirates (UAE), Qatar and Iran in the Persian Gulf region, and Israel in the Levant. Through personal engagement and hardnosed economic interest-driven calculations, he managed to befriend leaders of these countries, who at times do not talk to one another.

The second term should enable Modi to reap the fruits of his political investments and elevate his engagements to a higher level. At the same time, he will not be able to escape from some of the pressing and challenging problems.

First and foremost will be Iran, which has been a major foreign policy challenge since the end of the Cold War. Domestic electoral success will not be enough for Modi to override the determination of the Trump Administration to halt Iran’s oil exports completely. The US refused to extend the 200,000 barrels per day waiver granted to India last November, and this meant that India would not be able to import crude oil from Iran from May 2 without evoking American displeasure and even anger. A section of the political class, largely unrepresented in the new Lok Sabha, might advocate a defiant stand to exhibit India’s strategic ‘autonomy.’ States do not have the luxury of committing hara-kiri. Hence, Modi will have to devise a balanced approach vis-à-vis the United States and its demands on Iran.

Along with the November waiver on imports, the Trump Administration had excluded Chabahar port from the purview of sanctions. This should give Modi a golden opportunity to satisfy both the United States and Iran. The actual Indian investment in the Iranian port is much lower than the US$ 500 million touted in official circles. By enhancing its financial commitments to the Chabahar Port project, India could mollify Iranian displeasure over the stopping of crude imports.

In other words, what India needs to do is stop the import of Iranian crude to satisfy the United States and expand its financial commitments to the Chabahar project to keep Iran in good humour!

Second, Modi should slash the bureaucratic cobwebs and enable the flow of investments from the UAE and Saudi Arabia, which have committed to invest up to US$ 75 and 100 billion, respectively, in India. If the Ratnagiri refinery does not take off due to land issues, Modi should explore other western coastal states to facilitate Saudi-Emirati investments in the mega refinery project. Should Etihad exit from the troubled Jet Air, Modi’s personal equation with the Emirati leadership, would be helpful in the privatization of Air India.

Three, the ongoing intra-Gulf crisis over Qatar does not serve India’s interest. Given its economic, political, energy and expatriate links, an early resolution of the Saudi-Qatari standoff is in India’s interest. Mediation often comes with inadequate returns and burns, and India has eschewed, and rightly so, the temptation to mediate the Arab-Israeli conflict or the Saudi-Iranian rivalry. But the intra-Gulf Arab acrimony is different and India’s stakes are vital. Further, during his first term in office, Modi had established a personal rapport with all key players involved in the crisis, namely Saudi Crown Prince Mohammed Bin-Salman, Emirate Crown Prince Mohammed al-Nahyan and Qatari Emir Tamim al-Thani, and have met them many times. Modi should use the massive domestic mandate and his personal contacts with these leaders to initiate a dialogue process. It is both a doable and vital proposition that Modi considers bridging or healing the rift among Gulf Arab monarchs.

Fourth, China has managed to entice the Gulf Arab countries to endorse and partake in its ambitious Belt and Road Initiative. Given the abundance of sovereign wealth, Arab countries are a better bet for China than impoverished Asian and African economies. This would mean that, India will have to expand its trade basket and move into investment projects with the Gulf Arab countries. The Indo-Omani joint fertiliser company in Sur and India’s economic partnership with Jordan presents a model and precedent for more energised Indian investment in the Gulf economies. The government should also encourage the private sector to expand its presence in the Middle Eastern economies, especially the Persian Gulf region.

Five, India should expand its presence in the Israeli economy and technology market through selective but aggressive investments aimed at technology acquisition. More robust cybersecurity cooperation with Israel would require identification of critical areas and significant financial commitments. Mere statements and Memoranda of Understanding will not get India cutting edge technologies.

Lastly, India’s growing political engagements with the Middle East must be given more extensive publicity within the country. Looking primarily through the Pakistani prism, many commentators have either ignored the Indo-Gulf and Indo-Middle Eastern relations or have come to the wrong conclusion that under Modi India’s relations with the Islamic world has deteriorated. Nothing could be farther from the truth. Modi has skilfully balanced the Israeli-Palestinian, Saudi-Iranian and Saudi-Qatari binaries and furthered India’s interests. Saudi and Emirati leaders have bestowed their highest honours on Prime Minister Modi just days before the Lok Sabha elections, thus indicating the status of India’s relations with the Muslim world under Modi. A proper understanding of Modi’s Middle East policy since 2014 will not only generate broader domestic support for it but also enhance India’s influence in the region. If the mantra of NDA-1 was active engagement, now is the time for action.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India.