Will the uproar over the Prophet’s statements shake up trade between India and the Middle East?


Since investments and trade between the two regions are worth billions of dollars, the nations of the Gulf will keep a careful eye on the unrest in India.
It is possible that India’s political ties with the Gulf region will become strained as a result of insulting remarks made by members of India’s ruling Bharatiya Janata Party (BJP) against Prophet Muhammad; however, it is unclear whether the tensions will have an impact on the economic relationship, which has reached new heights in recent years.According to data compiled by the government, the value of two-way trade between Asia’s third-largest economy and the six countries that make up the Gulf Cooperation Council (GCC), including Saudi Arabia and the United Arab Emirates, surpassed $150 billion in the fiscal year that ended in March 2022. GCC countries include Saudi Arabia and the United Arab Emirates. The amount of money that India exported to the Gulf increased by 58 percent to nearly $44 billion, while the amount of money that India imported from the Gulf increased by 85 percent to nearly $111 billion.
As a result of the trade agreement that went into effect between India and the UAE last month, it is anticipated that the entire amount of bilateral commerce in products will rise to more than $100 billion during the next five years, while trade in services will rise to more than $15 billion.
But the nations of the Gulf will be keeping a close eye on the ongoing demonstrations in India over the derogatory comments made about the Prophet and monitoring how the Indian government responds to them.

Beyond the decades-old fields of oil and remittances, this and other moves, such as investments in Indian enterprises by the sovereign wealth funds of Saudi Arabia and the United Arab Emirates, are seen as signs of the ripening of economic links between India and the Gulf region.

However, due to the fact that hashtags such as #BoycottIndiaProducts and #Stopinsulting ProphetMuhammad have been trending on Twitter and Facebook in Gulf countries following the news that two BJP spokespersons were reported to have insulted the Prophet and his wife late last month, concerns have been raised regarding the possibility of adverse economic effects.

What about mutual boycotts?

The fact that some Indian goods were removed from a supermarket shelf in Kuwait did not assist the situation at all. Along with Afghanistan, Iran, Kuwait, Oman, Qatar, and Saudi Arabia, a total of a dozen countries, including Bahrain, Indonesia, Jordan, the Maldives, and the United Arab Emirates, lodged official objections with the Indian government. These countries include:

According to media sources, the call to boycott Indian products was met with calls from some quarters in India to boycott Gulf-based airlines like Qatar Airways. These calls were made in response to the initial call to boycott Indian products.

According to Happymon Jacob, a professor of international relations at Jawaharlal Nehru University in New Delhi, “the difficulty is with the image [of India] and the story” (JNU).

He stated that “at the political level, the damage seems to have been controlled,” adding that “there are no barbs being exchanged between the two sides.”

According to Jacob, “If India is considered to be going after domestic demonstrators with a strong hand, it might build a negative narrative against India over the longer term, which could impact economic ties.”

It was agreed upon by Talmiz Ahmed, a former ambassador of India to Saudi Arabia, Oman, and the United Arab Emirates, that the impact on the economy of the comments made by the now-defunct BJP bureaucrats could be felt for some time.

“Joint ventures between enterprises, the recruitments for positions, for example, are made by private companies or private persons. Government-to-government transactions do not take place. It’s possible that the partners in the Gulf will say something along the lines of, “We don’t know what type of individuals [from India] we are recruiting, what kind of ideas they hold, etc.” “The effects of these things are not immediate; rather, they manifest themselves gradually over time,” Ahmed explained.

Look West

Biswajit Dhar, a professor of international commerce at JNU, believes that the economic interdependence that exists between India and the GCC will be the solution to all of the world’s problems.

It is difficult to identify substitutions and replacements, according to Dhar, because the economies of the two regions are so intertwined and dependent on one another. They might be concerned by recent events in India, but I don’t believe the situation will worsen from its current state.

Ironically, the dispute broke out just as India was seeking to strengthen its ties with the GCC. India was looking to the GCC not only as a source of investment capital but also as a market for its exports, particularly in the areas of infrastructure and startup businesses.

Prime Minister Narendra Modi is leading the push to refashion India’s connections with the Gulf, which has been nicknamed the country’s “Look West” strategy. Modi has travelled to a number of nations in the Gulf and Western Asia and has hosted the leaders of those countries in New Delhi.

The significance of the Gulf of Mexico

If you ask any Indian ambassador about the connections between their country and the Gulf region, they would tell you that economic and cultural ties have existed between the two areas for generations.

These ties have been shaped over the past few decades by India’s requirements for energy, its worries regarding national security, and the sizeable Indian diaspora community.

During the fiscal year that ended in March 2022, India imported 212.2 million metric tonnes of oil, which had a value of about 120 billion dollars. A little more than 60 percent of this was sourced from the Gulf, with Iraq and Saudi Arabia being the two most important sources. Additionally, India gets a significant portion of its natural gas requirements from Qatar, which is the country’s leading supplier of liquefied natural gas (LNG).

There are over 32 million Indians living outside of the country, and approximately eight to nine million of them live in the Gulf region. These individuals are responsible for sending back approximately half of all remittances. Remittances sent by Indians working outside the country totaled $83 billion in 2020 and $87 billion were anticipated to be delivered in 2021.

According to Dhar of JNU, “so sure, this region is extremely crucially important to India.”

According to a government official who is familiar with India-GCC commercial relations but who did not want to be named, the Gulf countries that used to support India’s archrival Pakistan have realised the potential in India – seen as “an engine of growth in Asia.” This was stated by a person who is familiar with India-GCC commercial relations but who did not want their name to be used.

The strength and promise of the Indian economy is something that all of these nations have experienced, and as a result, they are eager to create connections with us, increasing security ties along the way, the individual added.

Reconstructing social and economic relationships

In addition to their traditional areas of collaboration, which include energy and security as well as the Indian diaspora, the Gulf and India have been looking into new sectors in which they may work together.

During his trip to India in February 2019, Saudi Arabia’s Crown Prince Mohammed bin Salman made a promise to spend up to $100 billion in several sectors, including but not limited to energy, infrastructure, agriculture, education, and healthcare.

Share this article

Recent posts

Popular categories


Please enter your comment!
Please enter your name here

Recent comments