India keen on building strong ties wth Gulf states
Sify, 7 August 2005
PM keen on building strong ties wth Gulf states
New Delhi: Having put the process of normalisation with Pakistan and China on track and strengthened India’s ties with the United States and Russia in the first year of his tenure, Prime Minister Manmohan Singh will turn his foreign policy focus to another important area - the Gulf states - over the next few months.
’’The Gulf states will be the next major area of focus,’’ sources in the Prime Minister’s office told UNI.
The six Gulf Cooperation Council (GCC) member-states - United Arab Emirates (UAE), Saudi Arabia, Oman, Qatar, Bahrain and Kuwait, with which India has ancient ties - have always been of tremendous significance for the country, located as they are in its immediate neighbourhood, just across the Arabian Sea.
The region is one of India’s most important sources of supply of crude oil and home to about 3.5 million Indians who send nearly six billion dollars back home every year in remittances.
As a group, the GCC is India’s second largest trading partner. It is the largest single origin of imports into India and the second largest destination for exports from India.
Given all these factors, India has always had a vital stake in the stability, security and economic prosperity of the Gulf.
’’The Prime Minister was pre-occupied with Pakistan and China as well as India’s relations with the US and Russia in the past 14 months after he assumed office in may last year. In this period, we have also put our relations with the European Union and ASEAN on an even keel,’’ the sources explained.
As part of the latest initiative, the Prime Minister last month authorised the ministries of commerce and external affairs to begin negotiations with the GCC to conclude an India-GCC Free Trade Agreement (FTA).
He has also approved negotiations with individual member- countries of the GCC for a Comprehensive Economic Cooperation Agreement (CECA), covering the services sector and investment, on the lines of the pact signed with Singapore recently.
’’The gulf region, like Southeast and South Asia, is part of our natural economic hinterland. We must pursue closer economic relations with all our neighbours in our wider Asian neighbourhood. India has successfully pursued a ’Look East’ policy to come closer to the countries of South-East Asia. We must, similarly, come closer to our western neighbours in the Gulf,’’ Singh said while chairing a meeting of the Trade and Economic Relations Committee (TERC) on July 27.
The TERC was set up a few months ago by him to function as a new institutional mechanism for evolving policies on economic relations with other countries. It will also coordinate preparatory work on the strategy on economic relations with India’s major economic partners, neighbours and regional economic groupings.
India’s ’Look East’ policy has facilitated negotiations on a free trade agreement with members of Asean.
The country recently concluded a CECA with Singapore and is negotiating an FTA with Thailand. India has an FTA with Sri Lanka and is committed to a South Asian FTA (SAFTA).
’’The new initiative towards the GCC member countries will bring the economies of the gulf closer to India,’’ a statement issued after the TERC meeting said.
’’We are looking at something more than FTAs. We would like to sign CECAs with the Gulf states. They are an important area of foreign policy,’’ the PMO sources said.
The sources said the Prime Minister was also likely to pay a visit to the region. ’’It may not be possible this year but maybe next year,’’ they said.
’’We can look at raising our exports to these countries and also attract more foreign direct investment (FDI) from them,’’ they said.
According to them, some of the Gulf states have evinced interest in investment in infrastructure, power and other sectors in India.
India’s exports to the GCC were around five billion dollars in 2002-03, while two-way trade exceeded 12.5 billion dollars, not counting crude oil and petroleum products.
From the strategic point of view, India and the GCC share a strong mutuality of interests and a common desire for stability and security in the region. This, in turn, means a widening of the areas for cooperation between them. These could include working together to meet new challenges such as terrorism and extremism.
