Context:
External Affairs Minister arrived in Saudi Arabia’s capital, Riyadh, to attend the First India-Gulf Cooperation Council (GCC) Foreign Ministers’ Meeting.
Relevance:
GS II: International Relations
Dimensions of the Article:
- Gulf Cooperation Council (GCC) Overview
- India-GCC Relationships Overview
Gulf Cooperation Council (GCC) Overview
- The Gulf Cooperation Council is a strategic and economic alliance consisting of six Arabian Peninsula nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
- Formed in 1981, the GCC fosters economic, security, cultural, and social collaboration among these member states.
- An annual summit is convened to deliberate on cooperative strategies and regional issues.
Importance of GCC for India
- Energy Assurance
- GCC states control nearly half of the globe’s oil reserves, making them crucial for energy security.
- Suppliers from the GCC are responsible for approximately 34% of India’s oil imports.
- Economic Engagement
- The GCC region is diversifying its economic activities to include tourism, construction, and finance, providing new avenues for trade and investment for nations like India.
- Indian Diaspora Influence
- Approximately 8.9 million Indians reside in the Middle East, significantly influencing remittances, with about 30% of India’s foreign remittances originating from this region.
- Strategic Positioning
- Positioned along the critical Persian Gulf, GCC nations play a pivotal role in global trade routes.
- Both India and the GCC are aligned in their pursuit of regional political stability and security.
India-GCC Relationships Overview
- The Gulf Cooperation Council (GCC), lying directly across the Arabian Sea, stands as a key regional ally and a significant economic partner for India.
- Notably, the GCC has become a principal trading and investment partner for India, enhancing both economic and strategic ties.
Diplomatic Engagements
- India participated in its inaugural political dialogue with the GCC alongside the United Nations General Assembly in 2003.
- In September 2022, India and the GCC reinforced their commitment through an MoU facilitating yearly dialogues between India’s External Affairs Minister and the rotating GCC presidency, enhancing bilateral communications.
Economic Interactions
- The fiscal year 2023-24 saw India-GCC trade reaching USD 161.59 billion, with Indian exports at USD 56.3 billion and imports at USD 105.3 billion.
- Economic ties have deepened, particularly influenced by the surge in oil imports due to global market fluctuations and post-pandemic recovery.
Trade Agreements
- A pivotal Framework Agreement signed in August 2004 aims to bolster economic cooperation, setting the stage for the ongoing negotiations of a comprehensive India-GCC Free Trade Agreement, potentially invigorated by the recent India-UAE FTA.
Energy Collaborations
- The GCC accounts for 35% of India’s oil and 70% of gas imports, underscoring critical energy dependencies.
- India is expanding its Strategic Petroleum Reserve (SPR) initiative, with active interest and potential collaboration from GCC member states.
Diaspora and Financial Contributions
- Approximately 8.9 million Indians reside in the GCC, making up about 66% of the overseas Indian community.
- Remittances from the GCC constitute a significant portion of India’s inward financial transfers, though there has been a decline from over 50% in 2016-17 to around 30% in 2020-21.
-Source: Indian Express
