In the shadow of Dubai’s glittering skyscrapers, creaking, colorful wooden dhows line the historic Creek waterway, groaning with Korean television sets, Indian basmati rice, Iranian pistachios and Chinese-made T-shirts and shoes. Many of the sailors aboard those dhows hail from Gujarat, the home state of India’s newly elected prime minister Narendra Modi, and sail ancient trade routes from Iraq to Somalia to India to Dubai.
The men from Gujarat, with their sun-streaked wrinkles and wide smiles, represent a small slice of a major global geo-economic development: the dramatic rise in India’s trade with the Arab world, particularly the Gulf Cooperation Council (GCC) states, and most notably Dubai.
Today, India’s trade with the Arab world tops $110 billion, according to New Delhi’s Ministry of External Affairs, and some 70% of India’s energy imports come from the region that most of the world calls “the Middle East” but India calls “West Asia.” By 2030, India will import 90% of its energy needs, the vast majority of which will come from West Asia. Thus, the relationship will only grow deeper.
India’s single largest export destination is the United Arab Emirates, mostly Dubai, and HSBC forecasts this will remain unchanged through to 2030. Indeed, the ties between Dubai and India run so deep that professional Indian expatriates like to tell visitors this oft-told joke: What’s the best city in India? Answer: Dubai.
To underscore this growing relationship, UAE national air carriers—Dubai-based Emirates and Abu Dhabi-based Etihad—have come to dominate India’s air links with the outside world. One Indian airline executive openly noted, “Emirates has become the national airline of India.”
Amid this backdrop, Narendra Modi was sworn in as the 15th Prime Minister of India on May 26. It was a historic moment. The son of a tea seller had ascended to the highest post in the land. His Hindu nationalist party, the Bharatiya Janata Party (BJP), won a resounding 282 seats in the 545-seat parliament, giving them a clear majority to govern. It was the first time since 1984 that a single party had won a majority. Modi ran on a platform of fixing the sluggish economy and improving governance. The Congress party—that bastion of the Indian political establishment—was routed.
It was an election that turned on domestic issues, on issues such as electricity and healthcare and jobs, but now that the dust has settled, the question in global capitals is: What will Modi’s foreign policy look like? Closer to the region, many in the Middle East are asking how Narendra Modi will approach the Arab and Muslim world. Will he accelerate the growing ties between India and the GCC states, a relationship that has been growing rapidly over the last decade, or will he look primarily to build ties within his own neighborhood and further East, with Japan, Korea, and other East Asian states?
Will he govern as a Hindu nationalist, a member of the party involved in the destruction of the Babri Mosque in Uttar Pradesh state in 1992, shortly after the BJP took power there? Or will he govern as a commercially minded statesman eager to make good on his promises of improving India’s economy through trade and investment?
Part of the answer may lie with those Gujarati sailors along Dubai Creek. Modi is a Gujarati with what the Columbia University economist and India-born scholar Jagdish Bhagwati calls the “Gujarati DNA” of a trader. The sailor-merchants in Dubai are part of an Indian Ocean–Arabian Sea trading heritage dating back more than a millennium—a heritage that also shaped Narendra Modi.
It is a heritage that Modi also wants to reclaim. In the year 1700, India accounted for about a quarter of the world economy. Today, it accounts for about 5% despite having some 17% of the world’s population. Part of the Modi appeal has been his call for India to become an economic leader once again, rather than a drifting potential power.
The campaign manifesto of the BJP outlined a worldview that saw India as a once-mighty trading nation that has lost its way. “India’s contribution to the march of civilization goes back to several thousand years before the Christian era… up to the eighteenth century, India was respected for its flourishing economy, trade, commerce and culture,” the manifesto noted. “India had a much bigger role and presence in industry and manufacturing than any nation in Europe or Asia… India was also one of the greatest shipbuilding nations and consequently had an access to international markets.”
In a sense, there are two Narendra Modis. There is the Modi with the Gujarati DNA, the business-friendly chief minister who attracted India’s industrial titans and foreign investment with what he liked to say was “red carpet, not red tape” for investors. This is the Narendra Modi that stepped in after two years of fruitless and frustrating negotiations between Tata Motors and West Bengal state to build an auto factory. As the talks collapsed, Modi wrote a simple text message to Ratan Tata: “Welcome to Gujarat.” Modi went on to perform a minor miracle in the Indian business world: within 72 hours, he had arranged licenses, loans and land, and Tata Motors had a new auto manufacturing plant.
But there is also the Narendra Modi of the BJP, the party that still has not shaken its anti-Muslim image, and one that still includes among its members those who demonstrate an aggressive Hindu nationalism. When Modi was a young man, he joined the Rashtriya Swayamsevak Sangh (RSS), a Right-wing Hindu nationalist group founded in 1925 that blended a mix of exclusivist Hindu nationalism and martial character-building among its members with a cocktail of anti-Muslim, anti-Christian and anti-colonial sentiments. A former RSS member assassinated Mahatma Gandhi, and the group led the charge to destroy the Babri Mosque in Ayodhya in 1992. Today’s BJP grew out of the RSS.
Modi, however, seems to understand his times. The people of India are not interested in a campaign of division and sectarianism. They want jobs, electricity, health care. It was clear which Modi was on display in the election campaign: Modi the trader and developer, not Modi the Hindu nationalist and divider. When asked about the controversial issue of the Ayodhya Temple, Modi liked to say, “toilets first, temples later,” in reference to the major public health problems in India owing to a severe shortage of toilets. As a result of this shortage, half of India’s population—some 600 million people—defecate in the open, creating a wide range of health problems.
India’s toilet problem is a reflection of its still-severe poverty. Amid the more recent Western media narrative of an “India on the rise,” with a growing middle class, high-tech centers and shopping malls and newly minted billionaires, the reality is that India remains desperately poor. Its per capita GDP is on a level with Pakistan, Yemen and several of the least-developed states in the world, and is also less than a third of China’s—a place with its own share of crushing poverty.
India’s middle classes saw in Modi a potential savior, a man who could both halt rising prices and create jobs, while restoring a sense of national honor battered by corruption scandals and a drifting ship of state. India’s poor saw a man who could simply lift them up, potentially doing for India what he did for Gujarat. This is a country, after all, where around 17,000 farmers commit suicide every year owing to crushing debt. This is a country hungry for a savior.
Modi is willing to play this role. “At the end of the day, for whom is the government? It is for the poor,” he said recently. “For rural areas, farmers, untouchables, the weak and the pained, this government is for them. To meet their aspirations and hopes, this is our priority, because our weakest, our poorest, have sent us here.”
In accepting victory, he said, “a new hope has arisen in the common man,” and proclaimed himself a servant of the people.
While expectations are high, Modi faces tremendous obstacles. After all, his successes in attracting investment and growing the economy in Gujarat—his state consistently outpaced national growth rates—rested on his near-absolute power as chief minister. As prime minister, he will be hemmed in by a vocal minority in Parliament, BJP allies who do not always agree with his free-market ways, and chief ministers across the country who have considerable ability to block his reforms.
Modi will reach out immediately to Japan, a place he visited as chief minister—he has developed a close relationship with prime minister Shinzo Abe during visits to the country. He also visited South Korea and Israel. Mostly, he traveled to drum up business for Gujarat. Modi’s visit to Israel received little attention, but he frequently cites the state as an example of economic success, and Tel Aviv was quick to congratulate Modi on his victory. There are also elements within the BJP who admire Israeli Zionism as an example to follow. They embrace the idea that Jews should dominate in their “homeland,” because they feel the same about Hindus in India.
Could Modi’s admiration for Israel color his views of the Arab world? Most analysts suggest not. “It is unlikely that a change in government will entice a major departure from India’s already delicate and astute foreign policy that manages to comfortably deal with the United States and Russia, GCC countries and Iran, as well as Israel and the Palestinians, despite the inherent complications,” N Janardhan , a prominent analyst of Gulf–India ties, told The Majalla.
He added that “the new [Modi] government would continue to actively engage with the region” owing mostly to “the Gulf’s significant political, energy and economic importance” to India.
Neelam Dao, the director of the Mumbai-based think tank Gateway House and a leading former diplomat in India’s foreign service, told The Majalla that “the importance of the Middle East/West Asia region to India may not always be visible, but it is critical to the economy. Therefore, for India’s foreign policy, it may well be the most important region in the world.”
Dao is right about the importance of the Middle East region not always being “visible” to Indian policymakers. One can read dozens of policy papers about India’s foreign policy priorities with only marginal attention paid to the Middle East. In fact, in a column in the Indian Express, prominent Indian foreign policy analyst C. Raja Mohan wrote: “Despite its vital economic importance, cultural and physical proximity, and shared security concerns, the Middle East does not figure high on the list of New Delhi’s diplomatic priorities.”
Mohan faulted former Prime Minister Manmohan Singh for his scant attention to the region. “He traveled just once to Iran and Egypt—to attend the summits of the Non-Aligned Movement,” he wrote, and “Singh’s bilateral visits to Saudi Arabia, Qatar and Oman—once each in the last decade—did not match India’s high stakes in the region.” Mohan calls on Modi to “change this and take a strategic approach to the Middle East.”
One place to start might be a visit to Dubai and the UAE. In fact, Narendra Modi would find much in common with the ruler of Dubai, Sheikh Mohammed Bin Rashid Al-Maktoum. Both have been called CEO-type leaders who cut through red tape to attract investment and grow their economies. Indian nationals have also played an instrumental role in the rise of Dubai, from bankers and consultants and traders to middle managers, service staff and laborers.
But it’s not just Dubai and the UAE. Indeed, the Middle East region is India’s largest trading partner as a regional bloc. Saudi Arabia accounts for more than a third, mostly in the form of oil exports, touching 43 billion US dollars. Both sides in the Saudi–India relationship have openly talked of enhancing their relationship from the transactional to the strategic.
India’s former foreign minister, Salman Khurshid, reflected the emerging elite policy consensus in Delhi when he told Asharq Al-Awsat editor-in-chief Adel Al Toraifi in a March interview that “Saudi Arabia continues to be our most important source of energy,” but “we need to transform our buyer–seller relationship into one of deeper energy partnership, through investments in petrochemical complexes, modernization of facilities, and joint ventures not only bilaterally, but also in third countries.”
In 2006, King Abdullah Bin Abdulaziz of Saudi Arabia sent a powerful signal about the importance of India when he chose Delhi as among his first two foreign visits as head of state. The King was feted as chief guest for India’s Republic Day. It was a historic moment: the first Saudi monarch to visit India in more than five decades.
During that visit, the two sides signed the “Delhi Declaration,” calling for a deeper strategic engagement. They reiterated that call during a 2010 visit by Indian prime minister Manmohan Singh to Riyadh, and began to put some meat on the bones of these calls during a 2014 visit by Crown Prince Salman Bin Abdulaziz to Delhi that saw the signing of numerous investment and trade agreements.
India is in dire need of infrastructure investment. Modi will look around at the world and see which countries have access to surplus capital for investment. He will see China, a strategic rival unlikely to invest in India, and the GCC states—a growing ally. Expect Modi to knock on the doors of GCC sovereign wealth funds for infrastructure investment.
Thus far, it seems that the “Pakistan dilemma” that held back Saudi ties with India no longer holds. All sides seem to be engaged in a geopolitical diversification process. In the end, China became a world power when it grew its economy and engaged the world on commercial terms. For Modi to achieve his dreams, the Gujarati DNA must triumph over the more atavistic pull of Hindu nationalism.
This post originally appeared at The Majalla.