Context: The pandemic has initiated a reverse migration of Indian blue-collar workers as projects in oil-rich States stall, and infrastructure development halts amidst a contracting global economy.

Current Scenario:

  • For India and its foreign policy, the West Asia/Gulf region holds a significant court for strategic, economic and even domestic political agendas, ranging from migration to energy security. 
  • West asian economy: The pandemic has shattered lives, economies and, arguably, even political and global institutions, the post-pandemic architecture may look drastically different from what we have been used to.
    • For the first time since the first Gulf War in 1991. The oil price crash, triggered by expectations of oversupply following a dispute on output caps between Saudi Arabia and Russia, exacerbated by the crash in demand due to COVID-19, will carry massive costs to the West Asian economies.
    • According to a Dubai Chamber of Commerce & Industry survey, more than 70% of businesses classified as small and medium-sized enterprises in Dubai, many owned by Indian nationals, may not survive over the months to come as labour critical industries such as tourism, conventions, hospitality and airlines bear the immediate brunt.
    • The major sovereign wealth funds and other financial institutions in West Asia have been hit hard by COVID-19 as well. 
    • In Saudi Arabia, consumer spending for April 2020, compared to the same time last year, was reportedly down by 34.6%.
  • Indian Diaspora: 
    • India’s Minister of External Affairs has said that India would repatriate more than 100,000 of its citizens between May 17 and June 13 from 60 countries, a majority of whom are expected to be from the West Asia region. Between June 10 and June 16,there were around 20 flights scheduled to bring Indian citizens back between India and Saudi Arabia alone.
    • Overall, an estimated figure of close to nine million Indians work in West Asia, responsible for sending back more than 56% of India’s annual infusion of $80 billion in remittances.
  • Oil and investment
    • India gets around 60% of its hydrocarbon requirements from West Asia. On an annualised basis, India saves up to $1.35 billion for each $1 drop in oil prices. With Brent still hovering under $40, the softening oil prices have helped cushion the impact of the national lockdown on the balance of payments. 
    • India has also taken advantage of the low prices to build up its strategic reserves and is looking at offshore storage options.

What is needed?

  • Fast-track resolution of endless litigation.
  • Expedite land acquisition.
  • By creating a few immediate success stories, India has the opportunity to transform the landscape and attract the kind of long-term capital that the economy needs.
  • Reverse migration and jobs: the government has tried to soften the blow by launching the Skilled Workers Arrival Database for Employment Support (SWADES) which attempts to capture the skills profile of returning workers and house them in a central portal that can be accessed by Indian and foreign companies.

India and West Asia

  • India’s relations with the West Asian countries are historical since independence. 
  • Energy security: 70 per cent of India’s imported energy needs come from West Asia and this dependence will only increase as the Indian economy continues to grow at 8 per cent or more.
  • Security of Indian community : India is the largest recipient of foreign remittances from west Asia, 11 million Indians working in West Asia. Therefore, stability in the region is high on India’s core agenda.
  • Gateway to central Asia : West Asia is gateway to land locked and energy rich central Asia .
  • Multipolarity: The rise of regional powers such as Russia, China, Saudi Arabia, Iran and India, and Increased multipolarity has enhanced India’s ability to truly pursue its national interests internationally, without involving itself in messy political alliances or ideological factions.
  • Geostrategic importance: To reduce the influence of China in west Asia and in Arabian Sea.


Image Source: the hindu