When the Bharatiya Janata Party (BJP) came to power in 2014 under Prime Minister Narendra Modi, there were widespread predictions that India’s close links with Gulf nations would deteriorate due to perceived ideological divides between the Hindu nationalist government and the Islamic monarchies of the region. However, a decade later, the opposite has occurred.

The relationship between India and the Gulf Cooperation Council (GCC) has not only endured but become a cornerstone of India’s foreign policy, marked by robust economic, strategic, and people-to-people ties.

Economic And Trade Leadership

The GCC has become India’s largest trading bloc, overtaking traditional giants such as the European Union, ASEAN, the United States, and China. In the fiscal year 2023-24, bilateral trade between India and the GCC soared to approximately USD 162 billion, surpassing bilateral trade with ASEAN (USD 110 billion), the EU (USD 130-140 billion), and the US (USD 118 billion). This marks the second consecutive year the GCC leads as India's top trading partner—a position it gained in FY 2022-23. For context, in 2013-14, bilateral trade was about USD 120 billion, demonstrating a growth of more than 35% in a decade.

Among Gulf nations, the United Arab Emirates (UAE) and Saudi Arabia are standouts. The UAE alone accounts for USD 84 billion in bilateral trade, followed by Saudi Arabia with over USD 43 billion. Key milestones include the India-UAE Comprehensive Economic Partnership Agreement (CEPA) signed in April 2022. Within just 12 months, Indian exports to the UAE rose by 12%, and tariff-free product lines expanded to over 80%. Since CEPA’s signing, bilateral trade in merchandise nearly doubled from USD 43.3 billion in FY 2020-21 to USD 83.7 billion in 2023-24.

A similar agreement with Oman, expected to remove duties on USD 3 billion worth of Indian exports, is in its final stages. In July 2023, the India-UAE local currency settlement agreement enabled trade in rupees and dirhams, reducing dependence on the US dollar and pioneering a new financial template for Gulf trade.

Foreign direct investment (FDI) from the Gulf has surged, notably from UAE, Saudi Arabia, and Qatar. GCC FDI inflows into India leapt from USD 326 million in 2014 to nearly USD 7 billion by 2020, with major sovereign funds investing in critical infrastructure, logistics, and technology.

Strategic Energy Partnership

Energy remains a bedrock of mutual dependence. Saudi Arabia, UAE, Kuwait, and Qatar together supply over half of India’s crude oil and LNG imports. In April 2025, India and Saudi Arabia inked a new energy partnership covering crude oil, LPG, petrochemicals, and joint ventures in green hydrogen and renewable energy. The India-UAE Strategic Energy Dialogue is now institutionalized, and a Joint Strategic Reserve Mechanism allows the UAE’s national oil company to store crude in Indian reserves, providing a critical buffer for energy security.

India’s invitation to Saudi Aramco to invest in the Ratnagiri Refinery and Petrochemicals project is set to create one of the world’s largest refining complexes, underscoring the strategic view of Gulf oil as a source of long-term security and diplomatic leverage.

Mega-Corridors And Infrastructure Connectivity

India’s role in launching the India-Middle East-Europe Economic Corridor (IMEC) at the 2023 G20 Summit is another landmark. Backed by the UAE, Saudi Arabia, the US, and the European Union, IMEC aims to connect Indian ports to Europe through the Gulf and Mediterranean via integrated shipping and rail links, offering a counterweight to China’s Belt and Road Initiative and bolstering regional supply chains.

Deepening Security And Intelligence Ties

Since 2014, security cooperation between India and the GCC has moved from the sidelines to the forefront. India and Saudi Arabia signed a defence cooperation agreement in 2014, covering joint military exercises, intelligence sharing, logistics, and hydrography. This led to the creation of a Strategic Partnership Council with political-security and economic-investment tracks.

India and the UAE have expanded military drills, including air force (Desert Eagle), naval (Gulf Star-I), and special forces exercises targeting counterterrorism and urban warfare. A trilateral maritime partnership with France and the UAE emerged in 2023, and India is a core participant in the I2U2 grouping (India, Israel, UAE, US) focusing on food security, clean tech, and infrastructure.

Counterterrorism cooperation has matured with high-profile operations, such as the joint India-UAE foiling of a terror plot in Delhi in 2020, and the 2023 Saudi-Indian intelligence-sharing agreement marking a move from ad hoc to institutional collaboration. The swift condemnation from Gulf states and the GCC to the Pahalgam terror attack in 2025 further signals the commitment to collaborative security.

Dynamic Diplomacy And Diaspora Links

Gulf leaders now routinely highlight India as a key diplomatic partner. UAE’s Crown Prince has made multiple state visits to India, and Saudi Crown Prince Mohammed bin Salman pledged USD 100 billion in Indian investments during a 2019 visit. Leaders from Bahrain, Oman, and Qatar have shown similar enthusiasm, with Qatar’s Emir personally overseeing the release of Indian Navy veterans in 2024, highlighting the diplomatic capital wielded by Indian leadership.

Diaspora diplomacy is pivotal—over 9 million Indians reside in the Gulf. New agreements, such as the 2023 India-UAE MoU on skill harmonization, aim to boost mobility and recognition of qualifications.

Prime Minister Modi’s proactive diplomacy has earned him the highest civilian honours from Saudi Arabia (King Abdulaziz Sash), the UAE (Order of Zayed), and Bahrain (King Hamad Order of the Renaissance), reflecting the elevation of personal and national ties.

Strategic Outcomes And Future Prospects

India’s engagement with the Gulf is no longer purely transactional or energy-based; it is multidimensional, encompassing trade, investment, security, technology, and cultural outreach. The pragmatic and sustained partnership defies early scepticism and is now a key pillar of India’s global posture, ensuring that the Gulf remains India’s most important strategic partner.

Agencies