India and Bahrain Relations

INDIA AND BAHRAIN

Context

  • Recently, External Affairs Minister of India concluded his two-day visit to Bahrain.

Key Details

  • INDIA AND Bahrain agreed to strengthen their ties in areas of defence and maritime security, space technology, trade and investment, infrastructure, IT, FinTech, health, hydrocarbon and renewable energy.
  • Both sides affirmed to further strengthen their Covid-related cooperation.
  • They also expressed satisfaction on operationalization of Air Bubble arrangement between the two countries.

Back to Basics

About Bahrain

  • A country in the Persian Gulf. 

    India and Bahrain Relations
    Credit: World Atlas
  • The country is situated between the Qatari peninsula and the north eastern coast of Saudi Arabia
  • It subsequently has a high Human Development Index and is recognised by the World Bank as a high-income economy. Bahrain is a member of the United Nations, Non-Aligned Movement, Arab League, Organisation of Islamic Cooperation and the Gulf Cooperation Council

India and Bahrain Relations

Background

  • India and Bahrain enjoy excellent bilateral relations characterized by cordial political, economic and cultural contacts.
  • Our bilateral Trade and commercial exchanges go back to about 5,000 years ago tracing their origins to the period of Dilmun Civilization in Bahrain to the era of Indus valley civilization in India.
  • Ancient Bahraini traders are believed to have carried out flourishing trade of Bahraini pearls with Indian spices from India.
  • Presence of around 350,000 Indian nationals who comprise a third of Bahrain’s total population of 1.4 million is an important anchor of our bilateral relations with Bahrain.

Trade and Economic Relations

  • Bahrain serves as the gateway to the GCC market because of its location.
  • The trade balance between Bahrain and India could top USD 1 billion in 2021, which would take it up to levels not seen since 2018.
  • Total bilateral trade stands at USD 1282.96 million in 2018-19 and USD 753.60 million in 2019-20 (April-Dec).
  • India’s total capital investment into Bahrain between January 2003 and March 2018 has been estimated at approximately USD 1.69 billion.
  • Financial services have the highest investment value (40% of total projects), followed by the real estate and hospitality sector.
  • As well as excellent access to GCC markets, logistics and transport businesses in Bahrain enjoy duty-free trade through Bahrain’s numerous FTAs, including the first-ever US FTA with a GCC member. Bahrain also has the region’s best-value operating costs, up to 45% more cost-effective than the rest of the region.
  • India’s main items of exports to Bahrain are mineral fuels, mineral oils, inorganic chemicals, organic or inorganic compounds of precious metals of rare earth, Elam/radii/isotopes, cereals, nuts, fruits, articles of apparel and clothing accessories etc., while main items of import from Bahrain are crude oils, mineral fuels, their bituminous substance, distillation, aluminum, fertilizers, ores/slags/ ashes of aluminum, iron and copper, pulp, salt, printed books, newspapers etc.
  • The Indian expatriate community enjoys great goodwill from the Bahraini authorities and the employers alike (around 350,000 Indian nationals).
  • Bahrain launched ‘Little India in Bahrain’ project in November 2015 to acknowledge and mark the contribution of Indian community to the history and progress of Bahrain.

Cultural Relations

  • In 2019, India launched a USD 4.2 million redevelopment project of the Sri Krishna temple in the Bahraini capital, Manama.
  • The 200-year-old temple stands as a testimony for the enduring India-Bahrain friendship.
  • India has traditionally enjoyed a very strong trade relationship with Bahrain. Indian firms have long used the island Kingdom as a gateway to western markets.

Bilateral Relations

  • The bilateral issues, as well as regional and global matters of mutual interest, included areas of defence and maritime security, space technology, trade and investment, infrastructure, IT, FinTech, health, hydrocarbon and renewable energy.
  • MoUs in the areas of culture, space, collaboration with International Solar Alliance (ISA). The Indian Space Research Organisation (ISRO) and Bahrain’s National Space Science Agency agreed to collaborate in the area of space technology.
  • ‘Look West’ policy is a major signal of intent, and we can expect trade and diplomatic ties between the GCC and India to deepen, and the vast Indian diaspora in the region serves as a channel for increasing trade flows. Bahrain will be at the centre of that and as the GCC opens again it is likely that this will generate tens of millions more dollars.”
  • Sectors like healthcare are seeing increased activity from Indian firms. The GCC’s proximity to the subcontinent, its world-class logistics infrastructure, and the fact it is home to some of the largest logistics operators makes it an easy win for Indian exporters.

Conclusion

  • In summation, ties between India and Bahrain are informed by a culturally compatible relationship, in view of historic linkages between India and the Arab Gulf states. However, as the panelists noted, there is a need for both sides to invest in each other’s development trajectories, institutionalise new frameworks to capitalise on the rising consciousness towards clean infrastructure, and jointly prepare for impending challenges by bolstering cooperation in the critical areas of food security and pharmaceutical production.

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