Looking West: India’s Energy Policy In West Asia.

Abstract

Energy security, of course, is a key ingredient of India’s interest in West Asia. It is dependent on imports for 80% of its oil needs, of which roughly 55% is sourced from the Persian Gulf region. The ratio could decline slowly as New Delhi diversifies with an increased focus on African producers. But the rate at which India’s energy demand is growing—it is currently the world’s fourth biggest oil consumer with import dependence projected to increase to 90% by 2031—offsets this in absolute terms. India’s increasingly multidimensional relations with Gulf Cooperation Council (GCC) states buttress these energy security efforts. The Indian diaspora in the Arab states is seven million strong—a valuable connection and responsible for some $40 billion in remittances annually. And the possibilities for investment go beyond the energy sector. The UAE has agreed to invest $75 billion in Indian infrastructure, Bahrain is looking to invest in financial services and high value-added manufacturing among other areas, and countries like Kuwait have sovereign funds ripe for targeting. Security and geopolitical considerations are, naturally, threaded through these economic engagements. Since Atal Bihari Vajpayee revitalized ties with GCC states, New Delhi has shown an admirable pragmatism, juggling its relationships with competing power centres like Riyadh and Tehran—even in light of the witches’ cauldron of proxy struggles and sectarian conflicts that is currently West Asia. This is the hallmark of mature diplomacy. The pay-off has been visible, from Saudi Arabia extraditing terror suspects to India to Qatari aid when Indian nationals have been endangered by the Islamic State and in Afghanistan. Factor in India’s potential role as a maritime net security provider for the Gulf States, reliant as they are on energy shipping through the Indian Ocean Region. According to the Indian Navy’s Maritime Security Strategy released last year, the Persian Gulf is a primary area of interest. The possibilities for cooperation are significant. In the period to 2040, India will overtake China as the largest source of rising demand for oil. The time to begin securing its interests in West Asia is now when it holds the advantage.