Israeli foray into the Gulf could disrupt the politico-economic architecture India has built with the GCC
The White House ceremony on September 15 marking the formal normalisation of Israel’s ties with the United Arab Emirates (UAE) and the Kingdom of Bahrain has created a significant inflection point in regional history and geopolitics. Indeed, it helped ring in the Jewish new year (Rosh Hashanah 5781) last weekend with some extra cheers!
Two new friendships
The two Gulf states have, thus, joined Egypt and Jordan which had their peace treaties with Israel in 1979 and 1994, respectively. Still, several nuances make the September 15 reconciliation different. For one, the UAE and Bahrain do not have any territorial dispute with Israel, nor have they ever been at war with it. Although formally committed to an Arab consensus over a two-state resolution of the Palestine cause, these two countries have steadily, albeit furtively, moved towards having substantive links with Israel in recent years. Hence, the ‘Abraham Accords’ entered with the UAE and Bahrain are ‘peace-for-peace’ deals without any physical quid pro quo by Israel. Multiple drivers are likely to spur the two new friendships to grow faster and deeper than the ‘cold peace’ Israel has had with its two Arab neighbours. Externally, Israel, the UAE and Bahrain share the common threat perception of Iran against the backdrop of the ongoing diminution of Pax Americana in the region. Internally, while all three have their respective hotheads opposing this reconciliation, these seem manageable. They are relatively more modern societies which share the overarching and immediate priority of post-pandemic economic resuscitation. They have lost no time to set up logistics such as Internet connectivity and direct flights to pave the way for more active economic engagement. If these sinews evolve, other moderate Arab countries are likely to join the Israel fan club.
Israel’s detente with Egypt and Jordan did not have any major impact on India as our ties with them were relatively insignificant. However, now India has stronger, multifaceted and growing socioeconomic engagements with Israel and the Gulf countries. With over eight million Indian diaspora in the Gulf remitting annually nearly $50 billion, annual merchandise trade of over $150 billion, sourcing of nearly two-thirds of India’s hydrocarbon imports, major investments, etc., it is natural to ask how the new regional dynamic would affect India.
Implications for India
Geopolitically, India has welcomed the establishment of diplomatic relations between the UAE and Israel, calling both its strategic partners. In general, the Israel-Gulf Cooperation Council (GCC) breakthrough widens the moderate constituency for peaceful resolution of the Palestine dispute, easing India’s diplomatic balancing act. However, nothing in West Asia is monochromatic: The Israel-GCC ties may provoke new polarisations between the Jihadi fringe and the mainstream. The possibility of the southern Gulf becoming the new arena of the proxy war between Iran and Israel cannot be ruled out, particularly in Shia pockets. India would have to be on its guard to monitor and even pre-empt any threat to its interests in the Gulf.
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Even more important for India is to manage the economic fallout of the Israel-GCC synergy. With defence and security cooperation as a strong impetus, both sides are ready to realise the full potential of their economic complementarity. The UAE and Bahrain can become the entrepôts to Israeli exports of goods and services to diverse geographies. Israel has niche strengths in defence, security and surveillance equipment, arid farming, solar power, horticultural products, high-tech, gem and jewellery, and pharmaceuticals. Tourism, real estate and financial service sectors on both sides have suffered due to the pandemic and hope for a positive spin-off from the peer-to-peer interactions. Further, Israel has the potential to supply skilled and semi-skilled manpower to the GCC states, particularly from the Sephardim and Mizrahim ethnicities, many of whom speak Arabic. Even the Israeli Arabs may find career opportunities to bridge the cultural divide. Israel is known as the start-up nation and its stakeholders could easily fit in the various duty-free incubators in the UAE.
Israeli foray into the Gulf has the potential to disrupt the existing politico-economic architecture India has carefully built with the GCC states. India has acquired a large and rewarding regional footprint, particularly as the preferred source of manpower, food products, pharmaceuticals, gem and jewellery, light engineering items, etc. Indians are also the biggest stakeholders in Dubai’s real estate, tourism and Free Economic Zones. In the evolving scenario, there may be scope for a profitable trilateral synergy, but India cannot take its preponderance as a given. It needs to keep its powder as dry as the shifting sands of the Empty Quarter.
Mahesh Sachdev, a former Indian Ambassador, is President, Eco-Diplomacy and Strategies, New Delhi