Events in West Asia are inexorably moving towards a region-wide
war. Prime Minister Modi was right in telling Israeli PM Netanyahu that
while terrorism has no place in our world, India hoped there would be no
regional escalation and that there would be restoration of peace and
stability. Recent events call into question any hope for prevention of
regional escalation and an early return to peace, much less stability.
India has big stakes in West Asia and a region-wide conflict will
impact negatively on India’s strategic interests. To begin with, this is a
region in which more than 9 million Indians, most of them Indian
nationals, live and work. While more than 8 million Indians live in the six
Gulf Cooperation Council (GCC) countries, namely, Bahrain, Kuwait,
Oman, Saudi Arabia, United Arab Emirates and Qatar, the remaining are
scattered all over the region. Israel has 105,000 Indians while Lebanon
and Egypt have about 3000 each. Iran has over 10,000 Indians while
Iraq, Jordan have over 17,000 each. Syria has negligible numbers of
Indians on its territory.
Indians living in the six GCC countries are a unique lot, because of
the circumstances in which they find themselves. It is practically
impossible for India to evacuate them because of the huge numbers
involved. It would take months, if not years, to carry out a full evacuation.
Besides, Indians living in the GCC are generally loath to coming back to
India, even if the circumstances are extreme. In other words, the fate of
more than 8 million Indians in the GCC is left largely to the host
governments. It is up to these Gulf monarchies to ensure the well being
of these Indian citizens. From India’s perspective, this community is un-
estimated, un-regulated and un-insured. In other words, we do not have
an exact count of the number of Indians living in the Gulf; we do not
strictly regulate the outward emigration of Indian nationals to the gulf;
and to top it all, the vast majority of the Indians in the GCC countries
lack health or employment insurance. Insofar as these 8 million Indians
are concerned, it must be hoped that the Gulf monarchies will do
everything to prevent their territories from being affected by the conflict
in Gaza and Lebanon. India received a whopping USD 120 billion as
remittances, out of which an estimated 40 per cent came from West
Asia. This too may be impacted if the war spreads in the region.
As far as Indians living in Israel, Lebanon, Iraq, Iran and Jordan
are concerned, the Government of India would be well advised to begin
drawing up contingency plans for evacuation, even if we hope it does not
come to that. Issuing travel advisories by Embassies in the region does
not serve much purpose. Indians abroad will choose to ignore them and
will stubbornly stay on till it becomes impossible for them to do so. More
crucially, there is now an expectation, legitimate or otherwise, on the part
of the Indians abroad that the Government of the day will come to their
rescue, no matter what. After all, that is exactly what happened even in
Ukraine where the Government successfully evacuated about 20,000
Indian students from a war zone. To make matters worse, the moment
war breaks out and Indian nations are in danger, all opposition parties
start putting pressure on the Government of the day demanding the
latter to repatriate Indians at the earliest opportunity. There have also
been cases of Chief Ministers of States demanding that priority for
evacuation be given to Indians from their State over others. With Air
India aircrafts no longer freely available for evacuation, it may be borne
in mind that the Central Government pays through its nose for such
evacuation operations. There needs to be a mechanism by which some
amount is charged from Indian nationals abroad when they are
evacuated. This will no doubt face opposition from many quarters.
The most important economic consequence emanating for India
from a conflagration in West Asia, is the price of Brent crude which may
well see a significant spike. At a time when protectionist sentiment is on
the rise and Indian exports are sluggish, if the price of Brent crude hits
anything close to USD 100 a barrel, India’s economic prospects will take
a big hit. According to Reserve Bank of India, every $10/barrel increase
in Brent crude leads to an additional $12.5 billion deficit, which is roughly
43 basis points of India’s GDP. With 87 per cent of crude oil being
imported, India’s foreign exchange reserves will be adversely affected,
and the rupee will come under enormous pressure.
There are also other strategic implications from a wider West Asia
war that deserve scrutiny. Projects like the India-Middle East-Europe
Economic Corridor (IMEEC) aimed at connectivity and integration
between Asia and Europe via West Asia, described as a game changer,
will have to wait for better times. Second, cost of sea freight is already
high thanks to the action by Houthis in the Red Sea. If this were to be
spread, the cost per shipping container will see a spike leading to
negative consequences for international trade. Last, but not least, withtwo major theatres of war in which the US is fully implicated, the focus is
off China leaving the latter free to assert itself in Asia. It is against this
backdrop of geopolitical strife that the US is going to the polls, with the
outcome as uncertain as ever. For India the challenge is to formulate
policy amid this cascading strategic turbulence.
Diplomacy and Geopolitics 