GULF COOPERATION COUNCIL (GCC)
1. Context
During the first India-GCC Joint Ministerial Meeting for Strategic Dialogue, held in Riyadh on September 9, the two sides emphasised on the significance of bolstering cooperation across various sectors, including trade, investments, energy, infrastructure, and healthcare.
2. Gulf Cooperation Council (GCC)
- The Cooperation Council for the Arab Gulf States, more commonly known as the Gulf Cooperation Council (GCC), stands as one of the most influential regional organizations in the Gulf and the broader Middle East.
- Formed in 1981, the six member countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE—came together against the backdrop of a turbulent political climate to establish collective strategies for addressing political, security, and economic challenges faced by the region.
- Over time, the primary focus of the GCC has shifted, and internal differences have occasionally surfaced, as seen during the Qatar crisis from 2017 to 2021. Despite these challenges, the GCC remains arguably the most successful regional organization in the Middle East.
- While disagreements over political and security objectives persist, economic cooperation among member states has been robust. In recent years, the GCC has made notable progress toward creating a common market, establishing a monetary union, and undertaking joint infrastructure and connectivity projects.
- The GCC states have also sought to build partnerships with key global economies, organizing summits with the United States, China, Japan, South Korea, Central Asia, and the Association of Southeast Asian Nations (ASEAN) to bolster economic ties.
- These efforts are part of a broader initiative to implement economic reforms in anticipation of a post-oil future, a process that has gained momentum since the Arab Spring and the COVID-19 pandemic
3. First India-GCC Summit
- The inaugural India-GCC Joint Ministerial Meeting for Strategic Dialogue is a notable step in the ongoing efforts to strengthen the economic partnership between India and the GCC, focusing on areas such as trade, investments, energy collaboration, infrastructure development, connectivity, food security, and healthcare.
- The meeting was co-chaired by India's External Affairs Minister, S. Jaishankar, and the President of the GCC Ministerial Council, Qatar's Prime Minister and Foreign Minister, Mohammed bin Abdulrahman bin Jassim Al Thani.
- It was attended by the foreign ministers of all GCC member states. During the meeting, a decision was made to establish a Joint Action Plan for 2024-2028, aimed at undertaking collaborative activities in various sectors, including health, trade, security, agriculture, food security, transportation, energy, and culture, with the flexibility to incorporate additional areas through mutual agreement
4.Significance of this partnership
- The summit was particularly significant as it aimed to strengthen the already robust India-GCC relationship, with key areas of focus including trade, business, investments, energy and food security, defense, military and counterterrorism, as well as enhancing people-to-people connections, which form the foundation of bilateral relations.
- The GCC region hosts one of the largest expatriate Indian communities globally, estimated at around 8.5 million, making it the biggest concentration of Indian citizens outside their home country.
- Over time, numerous Indians have found substantial employment opportunities in the thriving economies of the GCC, making this region the largest contributor to the nearly $120 billion in remittances sent to India in 2023.
- The GCC also ranks as one of India's most significant trading partners. For instance, in 2023-24, bilateral trade between India and the GCC amounted to $161.82 billion, accounting for 14.22% of India's total foreign trade.
- Although the trade balance currently favors the GCC, this is primarily due to India's substantial imports of oil and gas from the region. Out of the total imports valued at $105.49 billion in 2023-24, $61.35 billion, or 58%, were oil and gas imports from the GCC.
- These figures highlight the critical role the GCC plays in India's energy security. For decades, GCC nations have been the primary suppliers of energy to India, contributing nearly 50-60% of India's hydrocarbon imports until recently.
- As India diversifies its energy sources to reduce risks associated with political and security disruptions, the GCC's share in oil and gas supplies has declined to 28% in 2023-24.
- Nevertheless, the bloc continues to be vital for India's energy security, with Saudi Arabia, the UAE, Qatar, and Kuwait remaining among India’s top 10 suppliers of crude oil and gas.
- Moreover, the GCC countries are among the most important sources of foreign direct investment (FDI) for India. Between April 2000 and June 2024, India received a combined FDI inflow of $24.66 billion from the GCC, excluding substantial portfolio investments. Major GCC companies such as ARAMCO, ADNOC, and EMAAR have invested in various sectors of the Indian economy.
- Business relations are not one-sided; many Indian companies have become prominent investors, service providers, and market leaders within the GCC economies. For example, the Lulu Hypermarket chain has emerged as a major player in the retail sector. Additionally, Indian companies like TCS, Wipro, Larsen & Toubro, and Shapoorji-Pallonji have established a strong presence in their respective industries within the GCC market
5. India-GCC Free Trade agreement
- Discussions regarding an India-GCC Free Trade Agreement (FTA) have accelerated in recent years, particularly following the signing of the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The groundwork for an FTA was initially established with a framework agreement in 2004, followed by two rounds of negotiations in 2006 and 2008.
- However, the onset of political challenges in the region, especially following the Arab Spring of 2010-11, caused a pause in the FTA discussions.
- The intention to revive the India-GCC FTA was announced in November 2022, and officials have since been engaged in exploring pathways to finalize the agreement.
- Despite ongoing discussions, the FTA has not yet been signed, although both sides continue to express a strong interest in moving forward with the negotiations
6. Security and defence ties
- In addition to trade and economic relations, India and the GCC have strengthened their defense and security cooperation, focusing on counterterrorism, maritime, and coastal security. Joint military exercises and training involving various branches of their respective armed forces have become central to this bilateral defense collaboration.
- In recent years, India has engaged closely with GCC nations, particularly the UAE and Saudi Arabia, to boost defense trade, including exploring opportunities for potential joint manufacturing, considering the growing defense market in the Middle East and North Africa
7. Strategic Convergence
- The GCC stands as a key regional bloc in the Middle East. Despite internal differences, its member states have collaborated to establish an economic union aimed at fostering growth and addressing challenges arising from evolving global economic and political landscapes. As the international order shifts and the economic focus moves towards Asia, GCC nations have also begun to cultivate partnerships with emerging Asian economies.
- Beyond mutual economic interests, there are shared goals in tackling pressing issues such as climate change, reducing carbon emissions, developing clean and renewable energy sources, ensuring food and health security, and advancing the digital economy, AI, machine learning, and space exploration. Given their geographical proximity, many current and future challenges facing India and the GCC can be addressed collaboratively, enhancing their strategic alignment.
- This strategic alignment is further influenced by changes in the international landscape and various political and security developments globally. Events such as the conflicts in Ukraine and Gaza, proxy tensions between Iran and Israel, disputes in the South China Sea and Taiwan Strait, and instability in the Afghanistan-Pakistan region underscore the necessity for deeper cooperation between India and the GCC.
- In summary, the relationship between India and the GCC has evolved from a primary focus on energy security, bilateral trade, and the presence of Indian expatriates to a broader partnership aimed at collaboratively addressing present and future challenges.
- Key areas of focus that strengthen ties between India and the GCC include economic prosperity, land and maritime security, territorial integrity, food and health security, climate change, cultural collaboration, and leveraging technological advancements for the benefit of their populations, as highlighted during the first India-GCC Joint Ministerial Meeting in Riyadh. These strategic alignments are central to the deepening relationship between India and the GCC
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For Prelims: SCO, NATO, India, Central Asia, United States, China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, terrorism,
For Mains:
1. Examine the potential challenges and opportunities for India as a full member of the SCO, highlighting its implications for India's political, economic, and security interests. (250 Words)
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Previous Year Questions
1. Shanghai Cooperation Organisation (SCO) Heads of State Summit was held on 10th November, 2020 in the video conference format. The Summit was hosted by: (OPSC OAS 2021)
A. Russia B. India C. Kazakhstan D. Uzbekistan
Answer: A
2. The Summit of the Shanghai Cooperation Organisation (SCO) was hosted by which country from 15-16 September 2022? (Rajasthan CET 2023)
A. Kazakhstan B. Tajikistan C. Uzbekistan D. India
Answer: C
3. The area known as 'Golan Heights' sometimes appears in the news in the context of the events related to (UPSC 2015)
A. Central Asia B. Middle East C. South-East Asia D. Central Africa
Answer: B
4. Siachen Glacier is situated to the (UPSC 2020)
A. East of Aksai Chin B. East of Leh C. North of Gilgit D. North of Nubra Valley
Answer: D
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Source: Indianexpress
