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How COVID-19 Is Disrupting India’s Ties With Gulf Arab States
Aryaman Bhatnagar Friday, June 19, 2020
One of India’s foreign policy success stories under Prime Minister Narendra Modi is the country’s deepening relations with Gulf Arab states. Building on previous Indian governments’ engagement with members of the Gulf Cooperation Council—namely Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the United Arab Emirates—Modi has zeroed in on common economic and security interests to cement strong ties with GCC countries during his time in office.
The coronavirus pandemic has been the biggest disruption in years to these partnerships. For starters, prominent voices in the Gulf have spoken out against rising Islamophobia in India and among some members of the Indian diaspora. After a cluster of COVID-19 cases was traced to a gathering of Muslim missionaries in New Delhi in mid-March, Muslims around the country were subjected to a wave of verbal and physical abuse. Even some officials from the ruling Hindu nationalist Bharatiya Janata Party, or BJP, have accused Muslims of waging “corona jihad” by deliberately spreading the virus. The incidents come on the heels of a deadly wave of communal violence earlier this year in New Delhi, in which Muslim communities and businesses were disproportionately targeted.
The rise in anti-Muslim sentiment led the government of Kuwait to issue a statement in late April urging the Organization of Islamic Cooperation, which includes all six GCC countries, to “take necessary and urgent measures” to “preserve the rights of Muslims” in India. And a member of the UAE’s royal family, Princess Hend al-Qassimi, spoke out on Twitter against Indian expatriates spreading anti-Muslim sentiments online; she wrote that anyone expressing racist or discriminatory views could be punished under the country’s strict laws against hate speech. In fact, a number of Indians in the UAE have had their employment terminated for posting divisive comments on social media.
Modi addressed some of the criticism in an April 19 statement on Twitter, writing that Indians’ responses and conduct during the crisis “should attach primacy to unity and brotherhood.” Indian embassies in the Gulf region also tweeted about the virtues of communal harmony. And Modi and his foreign minister, Subrahmanyam Jaishankar, reached out by phone to their counterparts in the Arab world, reiterating India’s desire for strong ties and promising continued aid to support their responses to the pandemic.
Despite these efforts, some experts are concerned that rising anti-Muslim sentiment could undermine India’s recent diplomatic gains in the Gulf. Talmiz Ahmad, a former Indian diplomat who served as ambassador to Saudi Arabia, Oman and the UAE, warned in a recent op-ed that the GCC countries have now “woken up to the scourge of extremist Hindutva,” referring to the idea, popular among BJP members, that India is primarily a Hindu nation.
If anti-Muslim violence and hate speech continue to rise, they will undoubtedly mar India’s image in the Gulf even more. Yet the impact of India’s rising Islamophobia on its relations with Gulf Arab states should not be overstated. These countries ultimately view their ties with New Delhi through a pragmatic lens; for them, India is a key export market and an important trade and investment partner. It is telling, for example, that criticism of India from the Gulf largely abated after Modi and Jaishankar’s diplomatic interventions. Nor did relations suffer on account of Modi’s past actions that were widely seen as prejudiced against India’s nearly 200 million Muslims. These include the 2019 Citizenship Amendment Act, which created new pathways to citizenship for non-Muslim religious minorities from Afghanistan, Bangladesh and Pakistan, and Modi’s decision to revoke the constitutional autonomy of the Muslim-majority state of Jammu and Kashmir.
An even bigger and potentially more long-term disruption to India’s ties with the GCC comes from the economic fallout of the pandemic. Oil prices are expected to remain historically low at least through the rest of 2020 due to the sharp economic downturn from COVID-19. While the oil market collapse is a boon for India, which imports over 80 percent of its oil, it will put severe pressure on state finances of oil-exporting Gulf Arab countries.
GCC countries are currently prioritizing expanding their economic footprints in the West, including through large purchases of American and European stocks. Gulf Arab leaders are also diverting resources toward sectors seen as most likely to withstand and recover from the coronavirus-induced recession, including health care, technology and logistics. These are not the sectors in India that have traditionally attracted Gulf money. However, recent Saudi and Emirati investments in Reliance Jio, one of India’s largest telecom companies, may indicate that Gulf investors have not completely soured on India.
Finally, the biggest long-term impact of the pandemic is likely to be on the nearly 9 million Indians living and working in GCC countries. Since the 1970s, they have been at the core of India’s interests in the Gulf, ensuring a steady flow of remittances to India. But these foreign workers are now in an extremely precarious position. Many have already been laid off, but as foreigners, they are not eligible for economic relief.
As a result, India is bracing for a huge wave of returning migrants. Just in May, more than 300,000 Indians registered for repatriation from the Gulf—a number that will keep rising if the region’s economic situation fails to improve. So India faces the twin challenge of absorbing large numbers of its citizens into an already poor domestic job market, and the potential loss in remittances from the Gulf, which accounts for over half of India’s total annual remittances.
While this trend is being exacerbated by the pandemic, it may outlast COVID-19. The number of Indian workers moving to the Gulf each year has fallen from a peak of 600,000 in 2015 to 300,000 in 2019. Stagnant wages and increasing living costs have made Gulf Arab countries less attractive for Indians, conditions that could worsen with the pandemic. Saudi Arabia, for instance, has already tripled its value added tax from five to 15 percent. And Kuwait is mulling a tax on remittances sent by foreign residents.
The pandemic is also likely to accelerate Gulf countries’ ongoing efforts to reduce unemployment by reserving jobs in certain sectors for their own citizens. This will further reduce employment opportunities for foreigners, including Indians. Oman has already ordered all expats working in state companies to be replaced by Omanis, while Kuwait has announced its desire to reduce the expatriate population by half.
It is not a given that these policies will remain in place permanently, given Gulf nations’ overwhelming dependence on foreign workers. And many of the low-skill jobs that foreign workers traditionally fill often do not appeal to locals. Still, recent migration trends and the realities of the economic havoc wrought by the pandemic suggest that COVID-19 will have lasting impacts on this pillar of India’s policy in the Gulf.
Aryaman Bhatnagar is a foreign policy analyst based in New Delhi. He is a former German chancellor fellow of the Alexander von Humboldt Foundation.
MORE WORLD POLITICS REVIEW
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© 2020, World Politics Review LLC. All rights reserved.
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How COVID-19 Is Disrupting India’s Ties With Gulf Arab States
Aryaman Bhatnagar Friday, June 19, 2020
One of India’s foreign policy success stories under Prime Minister Narendra Modi is the country’s deepening relations with Gulf Arab states. Building on previous Indian governments’ engagement with members of the Gulf Cooperation Council—namely Saudi Arabia, Oman, Bahrain, Kuwait, Qatar and the United Arab Emirates—Modi has zeroed in on common economic and security interests to cement strong ties with GCC countries during his time in office.
The coronavirus pandemic has been the biggest disruption in years to these partnerships. For starters, prominent voices in the Gulf have spoken out against rising Islamophobia in India and among some members of the Indian diaspora. After a cluster of COVID-19 cases was traced to a gathering of Muslim missionaries in New Delhi in mid-March, Muslims around the country were subjected to a wave of verbal and physical abuse. Even some officials from the ruling Hindu nationalist Bharatiya Janata Party, or BJP, have accused Muslims of waging “corona jihad” by deliberately spreading the virus. The incidents come on the heels of a deadly wave of communal violence earlier this year in New Delhi, in which Muslim communities and businesses were disproportionately targeted.
The rise in anti-Muslim sentiment led the government of Kuwait to issue a statement in late April urging the Organization of Islamic Cooperation, which includes all six GCC countries, to “take necessary and urgent measures” to “preserve the rights of Muslims” in India. And a member of the UAE’s royal family, Princess Hend al-Qassimi, spoke out on Twitter against Indian expatriates spreading anti-Muslim sentiments online; she wrote that anyone expressing racist or discriminatory views could be punished under the country’s strict laws against hate speech. In fact, a number of Indians in the UAE have had their employment terminated for posting divisive comments on social media.
Modi addressed some of the criticism in an April 19 statement on Twitter, writing that Indians’ responses and conduct during the crisis “should attach primacy to unity and brotherhood.” Indian embassies in the Gulf region also tweeted about the virtues of communal harmony. And Modi and his foreign minister, Subrahmanyam Jaishankar, reached out by phone to their counterparts in the Arab world, reiterating India’s desire for strong ties and promising continued aid to support their responses to the pandemic.
Despite these efforts, some experts are concerned that rising anti-Muslim sentiment could undermine India’s recent diplomatic gains in the Gulf. Talmiz Ahmad, a former Indian diplomat who served as ambassador to Saudi Arabia, Oman and the UAE, warned in a recent op-ed that the GCC countries have now “woken up to the scourge of extremist Hindutva,” referring to the idea, popular among BJP members, that India is primarily a Hindu nation.
If anti-Muslim violence and hate speech continue to rise, they will undoubtedly mar India’s image in the Gulf even more. Yet the impact of India’s rising Islamophobia on its relations with Gulf Arab states should not be overstated. These countries ultimately view their ties with New Delhi through a pragmatic lens; for them, India is a key export market and an important trade and investment partner. It is telling, for example, that criticism of India from the Gulf largely abated after Modi and Jaishankar’s diplomatic interventions. Nor did relations suffer on account of Modi’s past actions that were widely seen as prejudiced against India’s nearly 200 million Muslims. These include the 2019 Citizenship Amendment Act, which created new pathways to citizenship for non-Muslim religious minorities from Afghanistan, Bangladesh and Pakistan, and Modi’s decision to revoke the constitutional autonomy of the Muslim-majority state of Jammu and Kashmir.
An even bigger and potentially more long-term disruption to India’s ties with the GCC comes from the economic fallout of the pandemic. Oil prices are expected to remain historically low at least through the rest of 2020 due to the sharp economic downturn from COVID-19. While the oil market collapse is a boon for India, which imports over 80 percent of its oil, it will put severe pressure on state finances of oil-exporting Gulf Arab countries.
This means that planned and potential investments from GCC countries in India’s infrastructure, energy, petrochemicals and refining sectors are now vulnerable. Saudi Arabia and the UAE alone have pledged more than $175 billion in investment in recent years. But most Gulf states have announced spending cutbacks as they prioritize economic relief for their own citizens and businesses. Saudi Aramco’s $15 billion investment in an oil refinery in Modi’s home state of Gujarat, for example, which was slated for completion in 2020, is now expected to be delayed.
GCC countries are currently prioritizing expanding their economic footprints in the West, including through large purchases of American and European stocks. Gulf Arab leaders are also diverting resources toward sectors seen as most likely to withstand and recover from the coronavirus-induced recession, including health care, technology and logistics. These are not the sectors in India that have traditionally attracted Gulf money. However, recent Saudi and Emirati investments in Reliance Jio, one of India’s largest telecom companies, may indicate that Gulf investors have not completely soured on India.
Finally, the biggest long-term impact of the pandemic is likely to be on the nearly 9 million Indians living and working in GCC countries. Since the 1970s, they have been at the core of India’s interests in the Gulf, ensuring a steady flow of remittances to India. But these foreign workers are now in an extremely precarious position. Many have already been laid off, but as foreigners, they are not eligible for economic relief.
As a result, India is bracing for a huge wave of returning migrants. Just in May, more than 300,000 Indians registered for repatriation from the Gulf—a number that will keep rising if the region’s economic situation fails to improve. So India faces the twin challenge of absorbing large numbers of its citizens into an already poor domestic job market, and the potential loss in remittances from the Gulf, which accounts for over half of India’s total annual remittances.
While this trend is being exacerbated by the pandemic, it may outlast COVID-19. The number of Indian workers moving to the Gulf each year has fallen from a peak of 600,000 in 2015 to 300,000 in 2019. Stagnant wages and increasing living costs have made Gulf Arab countries less attractive for Indians, conditions that could worsen with the pandemic. Saudi Arabia, for instance, has already tripled its value added tax from five to 15 percent. And Kuwait is mulling a tax on remittances sent by foreign residents.
The pandemic is also likely to accelerate Gulf countries’ ongoing efforts to reduce unemployment by reserving jobs in certain sectors for their own citizens. This will further reduce employment opportunities for foreigners, including Indians. Oman has already ordered all expats working in state companies to be replaced by Omanis, while Kuwait has announced its desire to reduce the expatriate population by half.
It is not a given that these policies will remain in place permanently, given Gulf nations’ overwhelming dependence on foreign workers. And many of the low-skill jobs that foreign workers traditionally fill often do not appeal to locals. Still, recent migration trends and the realities of the economic havoc wrought by the pandemic suggest that COVID-19 will have lasting impacts on this pillar of India’s policy in the Gulf.
Aryaman Bhatnagar is a foreign policy analyst based in New Delhi. He is a former German chancellor fellow of the Alexander von Humboldt Foundation.
MORE WORLD POLITICS REVIEW
What Religion Can Offer in the Response to COVID-19The Troubling Rise of Facial Recognition Technology in DemocraciesBrazil’s Bolsonaro Is Writing His Political Obituary With COVID-19COVID-19 Will Leave South Asia Poorer, Weaker and Less DemocraticHow COVID-19 Could Increase the Risk of WarCan Burkina Faso’s Haphazard Response Contain COVID-19?
© 2020, World Politics Review LLC. All rights reserved.
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