It may sound like a cliché but relations between India and the Gulf do go back to a hoary past. For the purposes of this article, the Gulf will essentially mean the Gulf Cooperation Council (GCC) states comprising Bahrain, Kuwait, Qatar, Oman, UAE and Saudi Arabia. Indian sailors, merchants and intellectuals were used to travelling to the present GCC region and exchanged goods, ideas and skills. In many GCC countries, until recently, the Indian rupee was legal tender. When oil was discovered in the region in the 1930s, migration from India began as a trickle. This turned into a flood with the “oil boom” of the 1970s. There are currently 9.37 million Indians living and working in the six GCC countries as of October 2024. This constitutes over 50 percent of the total diaspora population in these countries. India also imports massive amounts of crude oil and gas from the GCC countries. Some accounts put this at over 50 per cent of our oil imports and over 70 per cent of gas imports. This is also the outcome of the GCC countries themselves turning to China and India for their oil and gas exports; after all, the economic centre of gravity has also shifted to Asia.
So, the relationship until the 2000s can be described as largely comprising manpower exports from India to the GCC and oil & gas imports from the GCC to India. This paradigm is changing, and this article will try and look at the future trajectory of this important India-GCC relationship.
Oil boom and population boom
Until the early 2000s, the relationship meandered aimlessly. The Indian economy boomed after 1991 through to the 2000s, so we began importing larger and larger quantities of oil and gas from GCC countries. The share of Gulf countries in India’s crude imports was over 50 percent. The oil boom in the Gulf was matched by the population boom in India. So, more and more Indians emigrated from India to the Gulf. A vast majority of these were from the state of Kerala, but there are signs of this slowing down, and other regions from India are now more and more represented in the GCC countries. (The author was India’s Ambassador to the Kingdom of Bahrain from 2010 to 2015 and was a witness to this.)
This expatriate community is quite distinct from the Indian diaspora elsewhere in the world. For one thing, these are Indian passport holders who are likely to remain that way because Gulf countries do not grant citizenship even for long-term residents. Second, because of the huge number of 9 million, the main burden of taking care of them falls on host countries. Indian diplomatic missions in these countries are quite small and are ill-equipped to handle thousands of our citizens. Third, the economic importance of this diaspora for the finances of the states they come from (Kerala, for example) is huge. India now ranks as the number one country in the world to receive remittances from its citizens abroad, and the proportion of the diaspora in the Gulf is quite significant. India received a whopping $111 billion in remittances in 2022, with Mexico in second place at just $51 billion. At least 40 percent, if not more, of this total remittance figure comes from the Gulf for India. The importance of remittances from the Gulf cannot therefore be overstated.
