India has traditionally pursued a pro-Arab policy regarding the Arab-Israeli conflict in order to counteract Pakistani influence in the region and to secure access to Middle East petroleum resources. In the 1950s and early 1960s, this pro-Arab stance did not help India in establishing good relations with all Arab countries but may have served to keep peace with its own Muslim minority. India concentrated on developing a close relationship with Egypt on the strength of Nehru's ties with Egyptian president Gamel Abdul Nasser. But the New Delhi-Cairo friendship was insufficient to counteract Arab sympathy for Pakistan in its dispute with India. Furthermore, Indian-Egyptian ties came at the expense of cultivating relations with such countries as Saudi Arabia and Jordan and thus limited India's influence in the region.
In the late 1960s and in the 1970s, India successfully improved bilateral relations by developing mutually beneficial economic exchanges with a number of Islamic countries, particularly Iran, Iraq, Saudi Arabia, and the other Persian Gulf states. The strength of India's economic ties enabled it to build strong relationships with Iran and Iraq, which helped India weather the displeasure of Islamic countries stemming from India's war with Pakistan in 1971. Indian-Middle Eastern relations were further strengthened by New Delhi's anti-Israeli stance in the Arab-Israeli wars of 1967 and 1973 and by Indian support for the fourfold oil price rise in 1973 by the Organization of the Petroleum Exporting Countries (OPEC). Closer ties with Middle Eastern countries were dictated by India's dependency on petroleum imports. Oil represented 8 percent of India's total imports in 1971; 42 percent in 1981; and 28 percent in 1991. India purchased oil from Iran, Iraq, Saudi Arabia, the United Arab Emirates, and Kuwait and, in return, provided engineering services, manufactured goods, and labor. The 1980-88 Iran-Iraq War forced India to shift its oil purchases from Iran and Iraq to Saudi Arabia and the Persian Gulf states. Saudi Arabia and the Gulf states also have received large numbers of Indian workers and manufactures and have become the regional base for Indian business operations.
Two events in 1978 and 1979--the installation of the Islamic regime under Ayatollah Sayyid Ruhollah Musavi Khomeini in Iran and the Soviet invasion of Afghanistan in support of the pro-Soviet Marxist regime in Kabul--complicated India's relations with Middle East countries. From the Indian perspective, these two events and the Iran-Iraq War changed the balance of power in West Asia by weakening Iran as a regional power and a potential supporter of Pakistan, a situation favorable to India. At the same time, proxy superpower competition in Afghanistan strengthened the hand of India's adversary Pakistan by virtue of the military support Pakistan received from the United States, China, and Arab states led by Saudi Arabia. In the 1980s, India performed a delicate diplomatic balancing act. New Delhi took a position of neutrality in the Iran-Iraq War, maintained warm ties with Baghdad, and built workable political and economic relations with Tehran despite misgivings about the foreign policy goals of the Khomeini regime. India managed to improve relations with Middle Eastern countries that provided support to the Afghan mujahideen and Pakistan by redirecting Indian petroleum purchases to Saudi Arabia and the Persian Gulf countries. New Delhi, which traditionally had had close relations with Kabul, condemned the Soviet invasion only in the most perfunctory manner and provided diplomatic, economic, and logistic support for the Marxist regime.
In the early 1990s, India stepped back from its staunch anti-Israeli stance and support for the Palestinian cause. Besides practical economic and security considerations in the post-Cold War world, domestic politics--especially those influenced by Hindu nationalists--played a role in this reversal. In December 1991, India voted with the UN majority to repeal the UN resolution equating Zionism with racism. In 1992, following the example of the Soviet Union and China, India established diplomatic relations with Israel.
During the 1990-91 Persian Gulf War, Indian policy makers were torn between adopting a traditional nonaligned policy sympathetic to Iraq or favoring the coalition of moderate Arab and Western countries that could benefit Indian security and economic interests. India initially adopted an ambivalent approach, condemning both the Iraqi invasion of Kuwait and the intrusion of external forces into the region. When the National Front government led by V.P. Singh was replaced by the Chandra Shekhar minority government in November 1990, the Indian response changed. Wary of incurring the displeasure of the United States and other Western nations on whom India depended to obtain assistance from the International Monetary Fund (IMF--see Glossary), New Delhi voted for the UN resolution authorizing the use of force to expel Iraqi troops from Kuwait and rejected Iraq's linkage of the Kuwaiti and Palestinian problems. In January 1991, India also permitted United States military aircraft to refuel in Bombay. The refueling decision stirred such domestic controversy that the Chandra Shekhar government withdrew the refueling privileges in February 1991 to deflect the criticism of Rajiv Gandhi's Congress (I), which argued that India's nominal pro-United States tilt betrayed the country's nonaligned principles.
Prime Minister Narasimha Rao's September 1993 visit to Iran was hailed as "successful and useful" by the Indian media and seen as a vehicle for speeding up the improvement of bilateral relations. Key developments included discussions on the construction of a pipeline to supply Iranian natural gas to India and allowing India to develop transit facilities in Iran for Indian products destined for the landlocked Central Asian republics. India also sought to assuage its concerns over a possible Iranian-Central Asian republics nuclear nexus, which some saw as a potential and very serious threat to India should Pakistan also join in an Islamic nuclear front aimed at India and Israel. When Iranian president Hashemi Rafsanjani visited India in April 1995 to sign a major trade accord (the accord also was signed by the minister of foreign affairs of Turkmenistan) and five bilateral agreements, India-Iranian relations could be seen to be on the upswing.
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