India And The GCC - Bound By History

With India’s Independence Day being celebrated this month, we look at the changing trade and business links with one of its oldest partners.

When India celebrated its independence from the United Kingdom on August 15, 1947 the Gulf region was almost unrecognisable from what it is today. The Gulf Cooperation Council did not exist and it would be decades until the modern states of the UAE and Bahrain would be formed.

But while the countries that have emerged on both sides since then are relatively new from a global perspective, the ties that bind their people are much older. It is a relationship that dates back hundreds of years and forms the basis of one of the world’s oldest maritime routes, according to historians.

And perhaps just as importantly it was trade by sea with India and the exchange of goods including cloth, spices and pearls that supported the growth of the Gulf ’s coastal communities that would later become its largest cities.

These ties continued to strengthen prior to independence under the British Empire, when the Gulf countries were administered through India and even used Indian rupees and stamps. But it was the discovery of oil that would mark the start of the relationship seen today, with black gold reversing the hitherto mostly one-way flow of goods between the two sides.

“The ties are old and historical and have gained greater importance with the blossoming of the GCC as an energy powerhouse of the world,” says MR Raghu, managing director of Marmore Mena Intelligence.

Today the GCC supplies 60 per cent of India’s total energy imports, according to Indian Ministry of External affairs figures.

“However, the trade pattern between GCC countries and India cannot be painted with a single brush stroke,” adds Raghu.