West Asia is a part of India’s extended neighbourhood. India has enjoyed exceptionally close historic and civilizational ties with West Asia. Centuries-old bilateral trade had benefited both sides greatly as it enhanced their knowledge and understanding of each other.

India-West Asia Relations – Background

For decades, India was a passive player in West Asia – a beneficiary of good relationships with multiple actors. This is reflected in the points given below:

• During the Cold War years, India maintained close economic cooperation with both Saudi Arabia and Iran, the rival poles in regional geopolitics.
• In the post-Soviet world, the bi-directional approach has been expanded to a tri-directional foreign policy to accommodate the three key pillars of West Asia – Saudi Arabia, Iran, and Israel.
• India adopted the Look West policyin 2005 to strengthen its relations with West Asia.
• India has huge stakes involved in the region such as energy, trade, and the safety of the Indian community in the region.

India’s Relation with West Asian Countries

In this section, we will discuss the various relations between India and West Asian countries.

India and UAE Relations

India and the UAE established diplomatic relations in 1972. The greater push was achieved in bilateral relations when the visit of India’s Prime Minister to the UAE in August 2015 marked the beginning of a new strategic partnership between the two countries.

Economic Relation

• The economic partnership between India and the UAE has flourished, with bilateral trade reaching USD 85 billion in 2022-23. The UAE is India’s third-largest trading partner and second-largest export destination.
• Under India’s revamped FTA strategy, the Government has prioritized at least six countries/regions to deal with, which the UAE figures at the top of the list for an Interim Trade Agreement.
• Recently, the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates (UAE) was signed.
• Fintech – RuPay card, a key component of India’s Digital Public Infrastructure (DPI), has been accepted in the UAE since  2019, while from 2023, the rupee was being accepted for transactions at Dubai’s airports.

Cultural Relations

• The UAE is home to more than 3.3 million Indians, and Emiratis are well acquainted with and open to Indian culture. India participated as the Guest of Honour Country in the Abu Dhabi International Book Fair 2019.
• The Emirati community also participates in our annual International Day of Yoga events and various schools of yoga & meditation centres are running successfully in the UAE.

Energy security:

An agreement was signed between Indian Strategic Petroleum Reserves Ltd (ISPRL) and the Abu Dhabi National Oil Company to invest in the strategic crude oil storage facility in Mangaluru with an initial investment of $400 million.

Multilateral Cooperation:

• India and the UAE enjoy strong cooperation with the United Nations. Both countries are also currently part of several plurilateral platforms such as BRICS, I2U2 (India-Israel, UAE, USA) and UFI (UAE-France-India) Trilateral, etc.
• UAE was invited as a Guest Country to the G20 Summit held under India’s Presidency in September 2023. The UAE is also part of the India-Middle East-Europe Economic Corridor (IMEEC) infrastructure project that was signed during the G-20 summit in Delhi.

Challenges in India-UAE Relations

• Trade Barriers Impacting Exports-Non-Tariff Barriers (NTBs) such as mandatory Halal certification pose challenges to Indian exports, leading to a decline in certain sectors.
• Chinese Economic Influence-China’s economic influence, characterized by low-interest loans, has surpassed Indian endeavours in the UAE and the broader Middle East.
• Kafala System – The Kafala system, giving employers significant power over immigrant labourers, raises human rights concerns and challenges for migrant workers.

Steps Required to Overcome Challenges

• Paving the Way for Better GCC Relations – Leverage the UAE’s strong economic ties within the GCC to enhance India’s strategic presence and access to the African market.
• Compliance with UAE’s NTBs-Focus on transparency and predictability in addressing Non-Tariff Barriers to facilitate smoother trade relations.
• Exploring 2+2 Dialogues-Initiate high-level 2+2 dialogues with the UAE to address strategic, defence, and political matters for enhanced bilateral understanding.

India-Israel Relationship

India announced its recognition of Israel on September 17, 1950. However, it established full diplomatic relations only in 1992.

Both countries share friendly ties with an increased number of high-level exchanges and ministerial visits on both sides in recent times, which have expanded cooperation in different functional areas.

I2U2

Founded in 2021 is a new strategic partnership; Members: India, Israel, United Arab Emirates, and United States. It is also referred to as the West Asian Quad/Middle East Quad/New Quad. Objectives: To promote economic development, scientific innovation, and regional stability.

Economic and Commercial ties:

The bilateral merchandise trade grew from USD 200 million in 1992 to USD 10.1 billion (excluding defence) during the FY 2022-2023, with the balance of trade being in India’s favour.

• India is Israel’s third-largest trade partner in Asia and seventh-largest globally.
• Key Indian exports to Israel: Pearls, precious stones, automotive diesel, chemicals, machinery, electrical equipment, plastics, textiles, metals, and agricultural products.
• Israel’s major exports to India are pearls, precious stones, chemicals, machinery, electrical equipment, petroleum oils, defence-related goods, and transportation equipment.

Defence Cooperation:

Israel has remained among the top arms suppliers to India in the past two decades.

• Both countries are cooperating on security issues, including a Joint Working Group on Counter-Terrorism.
• Participation in ‘Make in India’: The Israeli defence companies IAI, Elbit Systems, and Rafael Advanced Defence Systems have established partnerships with Indian firms Bharat Forge, Tech Mahindra, Adani Group, and Tata Advanced Systems to manufacture specialized sub-systems and enhance homeland security systems

India’s Stand on the Israel-Palestine Conflict:

• India’s position with regard to Palestine was guided by the general consensus in the Arab world, the NAM, and the UN.
• India was one of the last non-Muslim states to recognise Israel, it became the first non-Arab state to recognise the PLO.
• India stressed that no alternative to the two-state solution can guarantee peace between Israel and Palestine and said that direct negotiations are the only path to peace.

Challenges in India-Israel Relations

• Relation with Iran: Israel sees Iran as an existential threat, while India values cooperation for energy supplies and a Chabahar port route to Afghanistan and Central Asia.
• Approach towards the Arab world: Israel has differences with Arab nations, whereas India’s recent UN vote against the US on Jerusalem reflects India’s significant interests in the region.
• Stand on China: China is Israel’s largest trading partner in Asia (Beijing’s bilateral trade with Israel totalling $22.1 billion in 2022), with strong technology and investment linkages.
• The Free Trade Agreement (FTA)is stuck because of the concerns from the Indian domestic industry.

Israel-Palestine conflict of 2024-2025

The Israel-Palestine conflict of 2024-2025 is an escalation in hostilities between the two sides. October 7, 2023: Hamas launched a large-scale attack on Israel, resulting in over 1,300 Israeli fatalities and numerous hostages taken into Gaza. October 9, 2023: Israel declared war on Hamas, initiating extensive military operations in the Gaza Strip, including airstrikes and a ground invasion. January 19, 2025: A ceasefire between Israel and Hamas took effect, concluding 15 months of intense conflict. This resulted in substantial humanitarian, political, and regional implications. Humanitarian Impact: Casualties: The conflict resulted in significant loss of life, with reports indicating over 46,000 Palestinian fatalities in Gaza and more than 1,800 Israeli deaths. Displacement: Approximately 85% of Gaza’s population, around 1.9 million people, were internally displaced due to the hostilities. Infrastructure Damage: The extensive military operations led to the destruction of a substantial portion of Gaza’s infrastructure, exacerbating the humanitarian crisis. Political and Diplomatic Developments: International Reactions: various countries and organizations have called for immediate ceasefires and humanitarian aid access. UN Resolutions: A UN Security Council resolution and two UNGA resolutions have been passed against Israel’s recent escalation another UNGS resolution has been passed in favour of the United Nations Relief and Works Agency for Palestine Refugees. In all three UNGA resolutions, India voted in favour of the end of the war and the provision of relief for the Palestinians. Legal Actions: In December 2023, South Africa filed a case against Israel at the International Court of Justice, accusing it of committing genocide against Palestinians in Gaza. Ceasefire Agreement: Mediated by Qatar, the United States, and Egypt, the ceasefire agreement included provisions for the release of hostages and prisoners, as well as the facilitation of humanitarian aid into Gaza. Regional Implications: Broader Middle East Instability: The conflict had wider repercussions in the region, affecting neighbouring countries and altering geopolitical dynamics. Impact on Israel’s International Standing: The scale of destruction in Gaza led to diplomatic challenges for Israel, including strained relations with some international partners. The 2024-2025 Israel-Palestine conflict underscored the enduring complexities of the region’s geopolitical landscape, highlighting the urgent need for sustained diplomatic efforts to achieve a lasting resolution.

Steps to Overcome Challenges

• Bigger trade volumes:Though the trade volumes between the two countries have been increasing year on year, still it’s much below their potential level. FTA should be executed soon and the trade basket must expand.
• Striking balance:A striking balance should be maintained between relations with Israel and Palestine for India’s geostrategic needs and international morality.
• To foster collaboration between Indian and Israeli entities, it’s crucial to adopt a comprehensive approach that encompasses interactions at the governmental, business, and inter-business levels.
• Both should collaborate against rising radicalization and cyber terrorism. India could adopt Israel’s three-tiered strategy for a robust and resilient cyber system with strong defence capabilities.

Implications of the Iran-Israel Conflict on India

Economic Implications: Conflict between Israel and oil-rich Iran could disrupt oil supply from the region, leading to a rise in oil prices globally. India imports around 2 million barrels of crude oil daily through the strategic Strait of Hormuz located at the mouth of the Persian Gulf. Any conflict or instability in the region would lead to supply shortages and increasing energy costs leading to inflation and constraining Economic Growth in India. Connectivity: The strategic connectivity interests of India might be affected. This includes the port of Chabahar in Iran, linking India to Afghanistan and Central Asia. Shipping disruption in the Red Sea would affect the trade in the region. A disturbance here could lead to delays, increased shipping costs, and instability in global trade. Diplomatic Challenges for India: Over the decade, India has had good relations with Israel and has leveraged Israeli expertise in defence, technology, and start-ups. The problem is that if the war effort intensifies, then India may have to take sides. That will not be a very comfortable situation to have. Of course, India can always take the middle path or the neutral stance, but that does not yield dividends any longer.

 India Saudi Relations

The two countries established diplomatic relations in 1947 and 2021-22 marked 75 years of establishment of diplomatic relations.

• Delhi Declaration in 2006 was a watershed moment in the India – Saudi Arabia relationship.
• Riyadh Declaration in 2010 elevated bilateral ties to a strategic partnership.

Diplomatic relationship

• Saudi Arabia’s highest civilian honour, the King Abdelaziz Sash was awarded to Indian PM Narendra Modi.
• The visit of the Crown Prince to India in February 2019 allowed investment of approximately 100 billion dollars in India and enabled the kingdom to join in International Solar Alliance (ISA).

Economic Ties

• Recently, both agreed to create a joint task force for $100 billion in Saudi investment.
• India is Saudi Arabia’s 2nd largest trade partner and Saudi Arabia is India’s 4th largest trade partner.
• As of January 2022, there were 2,783 Indian companies registered as joint ventures/ 100% owned entities with investments worth approximately $2 billion in the kingdom.
• Among the major proposed investments is the $44 billion West Coast Refinery & Petrochemicals Project in Maharashtra, which is being jointly built by Saudi Aramco and an Indian consortium.

Cooperation Agreements –

Cooperation between India’s Central Vigilance Commission and Saudi’s anti-corruption unit, Investment entities, small and medium enterprises banks, National Archives of the two countries, and on Desalination and renewable energy.

Challenges in India-Saudi Arabia Relations-

The deepening relationship between India and Saudi Arabia also faces several challenges which have been enumerated below:

• The Complexity of the Middle East Politics – The politics of the Middle East are complex and multidimensional. There exist several fault lines like Saudi Arabia-Iran Rivalry and Saudi Arabia-Israel animosity. India faces a complex challenge to manage its relationship with all these countries without antagonising others.
• Pakistan Factor-The Pakistan factor is also an important challenge in the development of a strong India-Saudi Arabia relationship. Saudi Arabia is one of the largest granters of loans to Pakistan. Pakistan has been using its territory to breed terrorism and hatred towards India. This has also led to some discomfort in a deepening of India and Saudi Arabia’s Relationship in the field of counter-terrorism.

Nitaqat Program of Saudi Arabia-

The Nitaqat program was introduced in 2011 in order to increase the employment of Saudi nationals in the private sector. Saudi policy of ’Nitaqat’ has upset the large expatriate community of Indians working in the Kingdom.

Steps to Overcome Challenges

• Expanding the areas of bilateral cooperation– India and Saudi Arabia should expand the potential areas for the next stage of bilateral cooperation in Indian infrastructure, agriculture, start-ups, skilling, and IT.
• Greater Integration of Economies – Some labour-intensive establishments from Saudi Arabia can be shifted to India which would reduce the Kingdom’s expatriate population. This would also eliminate the need to bring Nitaqat Policies.
• Increase in defence cooperation– India and Saudi Arabia can uplift cooperation in the maritime security domain to safeguard the global oil supply chain.
• Increased Cooperation in Space-With India’s growing space prowess, space becomes an important domain of cooperation between the two countries. The newly established Saudi Space Agency can engage with ISRO.

India and Iran Relations

India-Iran relations span centuries marked by meaningful interactions. The two countries shared a border till 1947 and share several common features in their language, culture and traditions. Independent India and Iran established diplomatic links on 15 March 1950.

Economic Cooperation:

• India-Iran bilateral trade during the FY 2022-23 was $2.33 billion, registering a growth of 21.76% YOY.
• During the period, India’s export to Iran was $1.66 billion (a growth of 14.34% YOY) and India’s import from Iran was $ 672.12 million (a growth of 45.05% YOY).
• The Chabahar Port, developed with Indian investment, provides a crucial gateway for trade and energy supplies.
• The India-Iran-Afghanistan Trilateral Agreementfacilitates easier trade and connectivity.

Strategic Partnerships:

• India’s development of the Chabahar Port in Iran aims to create a strategic transit route, bypassing Pakistan, and enhancing connectivity to Afghanistan and Central Asia.
• Iran is important to India as it provides an alternate route of connectivity to Afghanistan and Central Asian countries, in the wake of hindrances by Pakistan in using land routes.

Issues in India-Iran relations

• The U.S. sanctions (CAATSA) led to the stoppage of oil imports from Iran in 2019. This was after the revocation of the Iran Nuclear Deal. The act hurt India’s energy security.
• Iran’s tough statement on the Indian government’s abrogation of Article 370 of the Indian Constitution giving special status to Kashmir is another cause of tension. Iran’s previous regime had on a couple of occasions made statements instigating the Muslims of Kashmir against the governance which was reprimanded by India severely.

Restructuring India-Iran relations

• India has had good and cordial relations with the Gulf Countries. The Gulf countries and Iran have a history of sour relations, but the recent diplomatic talks between Iran and a few Gulf countries like UAE and Qatar opened the scene for India to have a deeper and wider reach in West Asia.
• Afghanistan is a common ground where the countries can forge a common and effective policy of engagement. Iran never withdrew its consulate from Kabul after the Taliban took the governance and now since India has opened up communication with the regime, the relations of Iran with the Taliban can be helpful for India as well.

India and Oman Relations

The maritime trade routes connecting the Sumerian and Harappan civilizations underscore the deep historical ties between India and Oman. These ancient links, particularly through Gujarat and the Malabar Coast, have left a lasting cultural imprint on both nations.

• Political Relations: The collaboration extends to regional forums, including the Gulf Cooperation Council (GCC), the Arab League, and the Indian Ocean Rim Association (IORA), showcasing a shared commitment to regional stability.
• Strategic Importance: Maritime Control: Oman controls the southeastern entrance to the Strait of Hormuz, a critical chokepoint for global oil shipments. This strategic position enhances India’s maritime security and trade interests in the region.
• Economic Relations:
• Beyond being the second-largest market for Oman’s crude oil, the economic relations encompass diverse sectors, making both nations integral to each other’s economic growth.
• Crude Oil Trade: India stands as the second-largest market for Oman’s crude oil, This position is exceeded only by China in Oman’s global crude oil export destinations.
• Non-Oil Exports: In the realm of non-oil exports, India maintains its position as the second-largest market for Oman, following Saudi Arabia. This dynamic reflects the diversification of trade ties beyond the energy sector.
• Cultural Relations:
• The deep socio-cultural bond between India and Oman is evident in various initiatives, such as yoga events and the Festival of India. Example: ‘Oman Yoga Yatra’ and ‘Yoga for Vasudhaiva Kutumbakam’ were launched.
• These activities not only celebrate cultural richness but also foster a better understanding between the people of both nations.
• Multilateral Engagement: G20 Participation: Oman’s inclusion as a guest country during India’s G20 Presidency reflects the recognition of its importance in India’s global engagement strategy.

Challenges in India-Oman Relations

Challenges, just like opportunities, remain multi-dimensional for both countries. They vary as per the national interest of both countries and their place in the world.

• For India, energy security is a huge challenge. The rise in crude prices impacts India as it imports around 85% of its energy requirements, for which ties with Oman are an important aspect.
• The most important challenge for Oman in the next 1-2 decades is to be able to diversify its economy to prevent the impact of fluctuations in oil prices. The government also focuses on fostering greater employment opportunities for Omanis and specifically training Omani nationals in skillets in non-oil sectors. India’s assistance will be required in such cases. It would also be challenging for the Indian expatriate community as Oman’s economy diversifies.

How to Overcome These Challenges?

• The need of the hour is to carefully diversify India’s energy basket and trade relations with Oman, and assistance from India’s side so both countries can fulfil their goals of becoming developed countries. This is 2040 for Oman and 2047 for India.
• In the larger context of world politics, India-Oman relations require a closer political relationship to ensure peace, trade, and prosperity.

Significance of West Asia

• Energy security– 70% of India’s imported energy needs come from West Asia.
• Gateway to Central Asia – West Asia is also a way to landlocked and energy-rich central Asia.
• Trade & Investment– The economic ties between India and the GCC countries are moving at a faster pace increasing mutual interdependence. UAE and Saudi Arabia are India’s third and fourth-largest trading partners respectively.
• Economic Growth – India is the largest recipient of foreign remittances from West Asia, which plays a significant role in India’s growth.
• Indian Diaspora – Six West Asian countries (UAE, Saudi Arabia, Kuwait, Oman, Qatar, and Bahrain) accounted for nearly 70% of all Indians who live abroad.
• Culture & Religion– India hosts the 3rd largest Muslim population in the world, which views Saudi Arabia as its important pilgrimage.
• Regional Connectivity– India has invested in Iran’s Chabahar port which is expected to be a bridge of trade between India, Iran, and Central Asia along with Afghanistan.
• Defence – India has a strong defence and security partnership with Israel which is useful for its security and military modernization drive.
• Regional Stability – close cooperation is essential with West Asian nations to counter radicalization and rising terrorism in the region.
• Maritime Diplomacy – West Asia is an integral part of India’s Indo-Pacific maritime domain.

Naval cooperation has already been gaining momentum with Oman giving berthing rights to Indian naval vessels to fight piracy in the Gulf of Aden.

Drawbacks in India-West Asia Relations

• Political constraints– India’s narrow bureaucratic approach towards the Gulf was incapable of a political engagement with the region’s interests. For example, India viewed Gulf countries through the prism of Pakistan.
• Low Investments– Despite India’s growing stature in the Gulf, it has not been able to attract substantial Arab investment. FDI from the GCC countries between 2000 and 2014 has remained stagnant at $3.2 billion.

There is a wide gap between the investments that the Gulf is ready to offer and India’s ability to absorb needs. For example, In 2015, Abu Dhabi committed to invest $75 billion in India. Still, India is a long distance away from facilitating that scale of investments.

• China factor– China has made rapid inroads in the Gulf by having acquired equity stakes in the region’s upstream oil and gas sector and having successfully penetrated Arab markets.
  • China is continuously making roads to West Asia through the OBOR initiative.
  • India’s incapacity to manage its own periphery, South Asia, has made Gulf Arabs more inclined to seek China as a better security partner, rather than India.
• Pakistan factor– India’s “trust deficit” with Pakistan has incapacitated India from advancing its commercial interests in West Asia, including the bringing to fruition of the Iran-India-Pakistan (IPI) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects.
• Arab slowdown & Nationalization– the decline of oil and gas prices, along with the rising cost of “war conditions” has led to the slowing of Arab Gulf economies, resulting in salary cuts,

layoffs, contracting employment opportunities, and nationalization of workforces at the cost of the Indian expatriate community.

Domestic Challenges within West Asia

• Political instability – The security situation in West Asia has been continuously deteriorating ever since the onset of the Arab Spring in December 2010. E.g., the Syria, Yemen, and Iraq crises.
  • The GCC-Iran rivalry, Shia-Sunni conflict, external intervention in the region, the fear of the rise of religious radicalism, etc. have further contributed to instability in West Asia.
• Involvement of global and regional powers– The involvement of extra-regional players such as the USA and Russia in the internal conflicts in West Asia has further aggravated the situation.
• Terrorism – Terrorism has emerged as the biggest security threat to the region. The rise of the Islamic State in Iraq and Syria (ISIS) is the most disturbing trend.
• Regional Conflicts – such as the Arab-Israel conflict, Israel-Palestine conflict, Iran-Israel conflict, and the Saudi-Iran rivalry create destabilizing effects in West Asia.
• US Sanctions on Iran: The US withdrew from the Iran nuclear deal and has threatened to impose economic sanctions on Iran. This may weaken the dialogue mechanisms, embolden conservatives, and may threaten regional stability even more.
  • India also has significant oil trade with Iran and stakes in connectivity through Chabahar port and other projects.

Way Forward

• Job Security for Expatriates – Due to economic instability caused by the pandemic, the Gulf countries are considering cutting back on foreign labour. India should ensure that the Indian expatriates will not be affected by this.
• Focusing Beyond Oil– There is a need to focus on the new and long-term possibilities for economic cooperation with the Gulf countries, which is looking at a future beyond oil.
• Medical tourism can be an important area where India can attract the UAE given India’s high-quality manpower in the medical sector and improving medical infrastructure in the country.
• Getting Along with Khaleeji Capitalism– With the rise of Khaleeji capitalism, the Gulf countries today deliver economic and security assistance to friendly states, build ports and infrastructure, acquire military bases, and broker peace between warring parties and states. India needs to leverage this opportunity.

Though energy has been the foundation of India and Gulf countries’ ties, there has been a remarkable shift in the relationship lately, and the recent focus on counterterrorism and security is reflective of the maturing of our relationship and elevated role in this region.

Conclusion

The COVID-19 pandemic, the Israel-Hamas War, the Israel-Iran Conflict, and the Palestine-Israel conflict have worsened the economic outlook, exacerbated India’s problem of reverse migration, and impacted Gulf sovereign wealth funds. In this climate, what India can do is focus on fast-tracking existing projects and re-engage with purpose in strategic sectors like healthcare, nuclear, and space cooperation.