Qatar crisis and its impact on India

“The secret of crisis management is not good vs bad, it’s preventing the bad from getting worse”

Andy Gilman

The past 6 years have seen two faces of the Arab world. One is on the path of violence and other on the path of rapid growth and globalization. Syria, Iraq, Libya and Egypt have been in jaws of violence while Qatar, Abu Dhabi and Dubai have developed themselves to be the global hubs for travel, leisure, business and finance.

The Saudi-Qatar crisis came to light on 5th June 2017 when Saudi Arabia announced to cut all bilateral ties will Qatar. Saudi Arabia closed its borders and routes through land, sea and air. The Saudi’s decision was followed by six other arab nations. The UAE and Bahrain gave Qataris two weeks to leave and 48 hours for the diplomats to quit. Saudi Arabia claims that Qatar “embraces various terrorist and sectarian groups aimed at destabilising the region”, including the Muslim Brotherhood, Al-Qaida, Islamic State and other groups supported by Iran.

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Qatar: From Rags to Riches

Qatar, one of the poorest Gulf nations in the past has developed itself to be one of the richest countries in the world. It has the third largest natural gas reserves in the world which is more than 5% of the world’s total. Qatar is also the host to 2022 Football World Cup becoming the first Arab nation to do so. Qatar has the highest per capita income in the world and ranks high on human development index and has developed itself as one of the most advanced Arab state. Qatar’s economy expanded by 12.9% each year from 2000 to 2010. Qatar is the home to Al Jazeera, the immensely popular and controversial Arabic television network.

In 2005, Qatar set up an investment authority named as the Qatar Investment Authority to specifically buy things around the world reducing the country’s exposure to the oil price. it owns Harrods, the Shard, the Chelsea Barracks site, the US embassy and the Olympic village site in London. It is also the largest shareholder in Sainsbury’s and co-owner of Miramax Films.

Qatar and its connections with terrorist groups

Qatar despite  being one of the smallest countries in the world with a population of 250,000 has a powerful presence in the middle east . Having the largest per capita income has allowed it to maintain relationships with various groups and factions some of whom have been sanctioned and declared as terror outfits. Qatar has been accused of providing a platform for private fundraising of American adversaries like ISIS and Al Qaeda. “I’m not in a camp against another camp…. I have my own way of thinking.” says Amanpour – the 34 years old CNN reporter who interviewed The Emir of Qatar.

Qatar always uses its sway in the oil market to leverage its ideology of supporting extremist groups. It has also been accused of buying oil in the black market from Al-Nusra, ISIS and various other radical groups. Washington – being the custodian should make sure that oil is not used as a habitude in getting away from responsibilities.

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India’s strategic and business ties with Qatar

Qatar is the prime global LNG (Liquefied Natural Gas) exporter to India, contributing nearly 80% of India’s total import of LNG India sources 7.5 million tonnes per annum ( nearly 80%) of its global import of LNG from Qatar under a long term contract between Petronet of India and RasGas of Qatar. Besides this, India also imports ethylene, propylene, ammonia, urea and polyethylene from Qatar.

However, the trade between the two is majorly towards the Qatar side. India has shown substantial growth in the past few years, with 45% increase in the trade from India’s side with exports amounting to nearly $1 billion in 2013-14 than $687 million in the year 2012-13. India and Qatar had a total bilateral trade of $17 billion in 2013-14. In 2014-15, India’s exports exceeded $1 billion ($1056 million) for the first time though bilateral trade came down to $15.7 billion due to decline in international oil and natural gas prices. India is the third largest importer to Qatar after Japan and South Korea. Qatar is the 10th largest importer of Indian goods.

Besides trade partnership, India and Qatar also have close political ties. PM Narendra Modi visited Doha in June 2016. This was second visit by Indian PM to Qatar, the first being by the then PM Dr. Manmohan Singh in November 2008. The Emir of Qatar, HH Sheikh Tamim Bin Hamad Al Thani paid a state visit to India in 2015. Prior to that, the then Emir of Qatar Hamad bin Khalifa al Thani made diplomatic visits to India in April 1999, May 2005 and April 2012.

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Economic impact on India and its ties with other middle-east countries

Both countries are keen to expand collaborations to their mutual benefit in all the major fields including energy, infrastructure, education and research, business, finance and investments, sports, travel & tourism. Major Indian companies such as L&T, Punj Lloyd, TCS, Wipro, MahindraTech, Shapoorji Pallonji, Voltas, Simplex, HCL, SBI and ICICI have operations in Qatar. As a part from this, Qatar Airways now has 102 weekly passenger flights covering 13 Indian cities.

Indian contractors Larsen & Toubro (L&T) in March 2014 won $576 million road project in Qatar. It also secured a $740 million order from Qatar Railways Co for the design and construction of the rail line for the Doha Metro project in Qatar.

India also shares a good relationship with Saudi Arabia, UAE and other Arab nations. Saudi Arabia invited Indian companies to invest in sectors like IT and telecom, electricity, agriculture, education and tourism. Saudi Arabia offered an investment opportunity to India of nearly $624 billion. Indian invested in the non-Arab real estate markets of Dubai with  a whopping amount of $4.928 billion in 2014. India in total has a trade with the GCC (Gulf Cooperation Council) countries at $137.7 billion in 2014-15, having grown from $5.5 billion in 2001.

As of now, India has not taken any stand over the gulf-Qatar crisis. External Affairs Minister Sushma Swaraj has termed it to be an Intra-GCC matter and India would stand tall to help any Indian in need. New Delhi has good relations with both Saudi and Qatar. India would hope that the issue gets sorted out soon as the Arab world is also home to about 8 million Indians.

References:

  1. https://www.theguardian.com/global/2013/jun/25/qatar-12-things-you-need-to-know
  2. https://www.ft.com/content/7bfa0d0a-5444-11e7-9fed-c19e2700005f
  3. http://www.financialexpress.com/world-news/five-arab-nations-cut-ties-with-qatar-what-it-means-for-india-its-relations-in-the-gulf/702023/
  4. https://www.theguardian.com/world/2017/jun/05/qatar-diplomatic-crisis-what-you-need-to-know
  5. http://gulfnews.com/news/gulf/qatar/qatar-crisis
  6. https://en.wikipedia.org/wiki/India%E2%80%93Qatar_relations
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