Growing Islamophobia In India Puts Trade Relations With Islamic Countries At Risk

The relations between India and some of the gulf nations, which go back decades, stand threatened after the ruling party’s anti-islamic attitude grows with time.

Growing Islamophobia In India Puts Trade Relations With Islamic Countries At Risk

The Islamic world is condemning India for its internal Islamophobic rhetoric and assaults on the Muslim community, which is indicative of a growing trend of global disapproval towards the perceived excesses of the Narendra Modi government. The prevailing perception is that the government's contempt for democracy and apparent policy failures are undermining India's geopolitical standing internationally. As a result of the ongoing controversy, India's trade relations with the Islamic world are at risk, and the substantial Indian diaspora residing in these nations is in danger.

Arab-Islamic countries from Asia, Africa, and the Middle East, led by the Gulf Cooperation Council (GCC) and the Organisation of Islamic Cooperation (OIC), have censured the Indian government for alleged mistreatment of its Muslim citizens, particularly in light of a recent incident where a spokeswoman for the ruling Bharatiya Janata Party (BJP) made anti-Prophet remarks on national television. The condemnation has prompted calls for boycotting Indian products and repatriating Indian settlers in those countries. Indian envoys were summoned by several foreign offices to express their protest against the government's actions. In response, the BJP-led government suspended the spokeswoman, Nupur Sharma, and expelled Delhi BJP media in-charge Naveen Jindal for similar comments. However, some argue that this action is not enough as Indian citizens are being routinely arrested under the sedition law for expressing critical views of the Prime Minister and other BJP leaders on social media. Therefore, comparable action should have been taken against Sharma and Jindal for their public comments.

Prime Minister Modi has made significant efforts to strengthen India's ties with the Arab world, having visited the UAE four times during his tenure. The UAE is India's third-largest trading partner, behind China and the US. Saudi Arabia supplies about 20% of India's crude oil requirements, and Qatar provides nearly 40% of India's gas imports. Kuwait has doubled its bilateral trade with India over the past two years. In 2020-21, India's trade with the six GCC nations amounted to nearly $155 billion, with exports accounting for only $44 billion. These countries also host close to nine million Indian expatriates and account for approximately 65% of India's annual remittances, which amounted to $87 billion in 2021. India is the world's largest recipient of remittances, which is a testament to the significant contribution of its diaspora community to the country's economy.

Why India Need The Gulf?

India has enjoyed a strong relationship with the Gulf countries, particularly those in the GCC, for several decades. The relationship is founded on the substantial trade activity and personal remittances that occur between India and the Gulf. Another factor that has strengthened ties between India and the Gulf is oil and gas, which are of vital importance to India's energy needs.

India's economy is significantly impacted by the trade relations it shares with the Gulf countries. The GCC, which includes the UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain, has become one of India's major trading partners, with vast potential for future investment. The GCC's significant oil and gas reserves are of utmost importance for India's energy requirements.

According to data from India's Ministry of Commerce, exports from India to the GCC countries rose to approximately USD 44 billion in 2021-22, representing a growth of over 58% from the previous year's USD 27.8 billion. This accounted for 10.4% of India's total exports in 2021-22.

An Overview Of Delhi’s Economic Ties

Iraq: Iraq is a crucial ally for India's energy security and has been the largest crude oil supplier to India for several years. Additionally, Iraq is one of India's top trading partners, ranked seventh overall. The total bilateral trade between India and Iraq amounted to $34.3 billion, with a significant portion being attributed to oil imports, according to data from the Ministry of Commerce.

Qatar: In the fiscal year 2021-22, the trade between India and Qatar reached a total of $15 billion. Of particular note is the investment made by the Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar, which has acquired a 25.1 percent stake in Adani Electricity Mumbai Ltd for $450 million. In April 2021, the QIA, along with other investors, also invested $800 million in the Indian food delivery company Swiggy.

Saudi Arabia: According to the Indian Embassy in Riyadh, Saudi Arabia, which is the second-largest supplier of crude oil to India, conducted trade worth $42.9 billion in 2020-2021.

Iran: According to the Indian Embassy in Tehran, the bilateral trade between India and Iran was recorded at $1.9 billion in 2021-22. Among India's top exports to Iran are rice, tea, sugar, fresh fruits, drugs/pharmaceuticals, man-made staple fibres, electrical machinery, and artificial jewellery, while India's major imports from Iran include dry fruits, inorganic/organic chemicals, glassware, and gypsum.

However, The relations between India and some of these nations, which go back decades, stand threatened after the ruling party’s anti-islamic attitude grows with time.

About The Author

Girish Linganna is a Defence & Aerospace analyst, and is the Director of ADD Engineering Components (India) Private Limited which is a Subsidiary of ADD Engineering GmbH, Germany with manufacturing units in Russia.

(Views expressed are the author's own & do not reflect the editorial stance of Mission Victory India)

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