Delhi’s Strategic Shift Towards the Arab Gulf

In 2023-24, India’s central government intensified diplomatic and economic engagement with Arab Gulf countries, signaling a revival of the Bombay school of thought in its West Asia policy. This approach prioritizes pragmatic economic and geopolitical interests over ideological considerations, contrasting with the Delhi school’s historically more cautious stance. The Ministry of External Affairs (MEA), empowered under the Ministry of External Affairs Act, 1948 and governed by the Indian Foreign Service (Recruitment) Rules, 1961, has spearheaded this renewed focus, leveraging constitutional authority under Article 246 and Entry 10 of the Union List, Schedule VII to conduct foreign affairs. The shift reflects India’s recognition of the Gulf’s centrality to its energy security, trade, and diaspora welfare.

Constitutional and Institutional Framework Governing India’s Gulf Policy

The Union Government holds exclusive jurisdiction over foreign affairs as per Article 246 and Entry 10 of the Union List. The MEA, established under the 1948 Act, implements India’s external relations, with the Indian Foreign Service (IFS) managing diplomatic missions including those in Gulf states. The Supreme Court ruling in S.R. Bommai v. Union of India (1994) reaffirmed the executive’s primacy in foreign policy, limiting state interference. This centralization enables cohesive and consistent policy articulation towards the Gulf, integrating economic, security, and diaspora concerns.

• MEA: Formulates and executes foreign policy, manages diplomatic ties with GCC countries
• IFS: Deploys diplomats skilled in regional geopolitics and economic diplomacy
• Supreme Court: Validates executive prerogative in foreign affairs, ensuring uniform policy implementation

Economic Stakes in India-Gulf Relations

India’s economic engagement with the Gulf is substantial and multifaceted. Bilateral trade reached approximately USD 185 billion in 2023, constituting nearly 30% of India’s total trade volume (Ministry of Commerce, 2024). The Gulf supplies over 60% of India’s crude oil imports (Petroleum Planning & Analysis Cell, 2023), underpinning India’s energy security. Remittances from the Gulf accounted for USD 87 billion in 2023, representing 45% of India’s total remittances (World Bank Migration Report, 2024). The Gulf hosts more than 8 million Indian expatriates, whose foreign exchange contributions are critical to India’s balance of payments (MEA Annual Report, 2023). Indian investments in Gulf infrastructure and energy sectors crossed USD 15 billion in 2023 (FICCI Gulf Report, 2024). The 2022 UAE-India Comprehensive Economic Partnership Agreement (CEPA) targets a 50% increase in bilateral trade within five years, reinforcing economic interdependence.

• Trade volume: USD 185 billion (2023), 30% of India’s total trade
• Energy imports: 60% of crude oil from Gulf countries
• Remittances: USD 87 billion, 45% of total remittances
• Indian diaspora: Over 8 million in Gulf states
• Investments: USD 15 billion in energy and infrastructure
• UAE-India CEPA (2022): Aims for 50% trade growth in 5 years

Bombay School vs Delhi School: Divergent Approaches to West Asia

The Bombay school of thought, historically rooted in Mumbai’s mercantile community, advocates for pragmatic engagement with the Gulf based on economic and diaspora interests, minimizing ideological or sectarian considerations. Conversely, the Delhi school has often emphasized strategic caution, balancing relations with Israel, Iran, and Arab states, sometimes constrained by domestic political narratives and ideological postures. The current policy resurgence of the Bombay school prioritizes economic pragmatism and geopolitical balancing, reflecting India’s evolving global ambitions and energy demands.

Critical Gaps in India’s Gulf Policy

Despite economic successes, India’s Gulf policy underestimates the strategic complexity of intra-Gulf rivalries, such as the Qatar-Saudi-UAE tensions. India lacks a comprehensive multilateral engagement framework within the Gulf Cooperation Council (GCC), limiting its ability to leverage collective Gulf cooperation for regional stability and economic integration. This gap constrains India’s diplomatic influence and risks exposure to regional volatility affecting energy supplies and diaspora security.

• Insufficient multilateral engagement within GCC
• Underappreciation of intra-Gulf political rivalries
• Limited strategic coordination on security and economic integration

Significance and Way Forward

The revival of the Bombay school in Delhi’s Gulf policy aligns India’s foreign policy with its economic imperatives and diaspora realities. Strengthening multilateral ties with the GCC can enhance India’s regional leverage and stability. Expanding energy diversification while deepening economic partnerships through CEPA and infrastructure investments will sustain growth. Institutionalizing strategic dialogues addressing intra-Gulf conflicts and security cooperation is vital to mitigate risks. This pragmatic approach positions India as a balanced actor in West Asia, distinct from China’s more assertive model.

• Institutionalize multilateral engagement with GCC countries
• Enhance strategic dialogues on intra-Gulf conflicts and security
• Diversify energy sources while deepening Gulf partnerships
• Leverage CEPA to boost trade and investment
• Prioritize diaspora welfare and foreign exchange stability

Jharkhand & JPSC Relevance

• JPSC Paper: Paper 2 – International Relations and Economic Development
• Jharkhand Angle: Jharkhand’s migrant workforce benefits from remittances sent by expatriates in the Gulf, impacting the state’s rural economy and foreign exchange inflows.
• Mains Pointer: Frame answers highlighting the economic impact of Gulf remittances on Jharkhand’s development and the importance of stable India-Gulf relations for diaspora welfare.