Traditionally, India’s relationship with the Gulf countries was predominantly viewed through an economic lens, driven by oil imports and the export of labor. However, in recent years, this perspective has evolved into a more comprehensive strategic engagement.

Main Body:

Transformation of Gulf Region:

No Longer Exclusive Petro-States:

  • Gulf states have transcended their image as mere petro-states, developing robust financial capital structures fueled by substantial oil revenues.
  • This transformation has given rise to what is now referred to as “Khaleeji” or Gulf capitalism.

Khaleeji Capitalism:

  • Khaleeji Capitalism embodies the ascent of large conglomerates and sovereign wealth funds in the Gulf region.
  • Gulf countries have come to dominate various regional sectors, including banking, finance, infrastructure, logistics, agribusiness, real estate, retail, and telecommunications.

Moving Towards Modernization:

  • Gulf nations have embarked on a path of modernization, striving to reduce the influence of religion on social life.
  • Initiatives include expanding women’s rights, enhancing religious freedoms, promoting tolerance, and fostering national identities beyond religious affiliations.
  • The UAE, in particular, has taken significant steps in this direction, such as decriminalizing alcohol use and instituting long-term visas.

De-hyphenation of India-Pakistan:

  • Gulf countries are eager to establish strong and independent political ties with India without being constrained by India-Pakistan relations.

New Opportunities for India:

Shielding India’s Economic Interest:

  • Indian foreign policy should prioritize safeguarding India’s interests in the aftermath of the pandemic.
  • Given the economic turmoil caused by the pandemic, Gulf nations may contemplate reducing foreign labor, and India must ensure the welfare of its expatriate population.

Focusing Beyond Oil:

  • India should explore new and enduring avenues for economic cooperation with Gulf countries as they diversify away from oil.
  • This diversification encompasses renewable energy, higher education, technological innovation, smart cities, and space commerce.
  • India should strive to bridge the gap between available Gulf investments and its capacity to absorb them.

Leveraging Gulf-Israel Normalization:

  • The recent normalization of relations between UAE, Bahrain, and Israel presents an opportunity for India to enhance economic and technological engagement with Israel.

Getting Along With Khaleeji Capitalism:

  • The rise of Khaleeji capitalism has enabled Gulf countries to provide economic and security assistance, develop infrastructure, establish military bases, and mediate conflicts.
  • India should collaborate with Gulf nations, particularly the UAE, in developing joint infrastructure projects, taking advantage of its leadership in the Indian Ocean Rim Association (IORA).

Scaling Regional Initiatives:

  • India should expand its regional initiatives in connectivity and security in the Indian Ocean, bringing depth and scale to its engagements.


The Middle East has evolved into a multipolar region with power distributed among various regional and extra-regional actors.

India should discard outdated perceptions of the Gulf and seize the new strategic opportunities presented by the region’s embrace of modern values and Khaleeji capitalism.

This evolving landscape necessitates a shift from a purely economic approach to a holistic strategic engagement with the Gulf nations, emphasizing mutual interests, cooperation, and development.

Legacy Editor Changed status to publish September 23, 2023