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Kashmir: $100b In Annual Trade With India And The Gulf States’ Muted Response To Revocation Of Article 370

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Gulf Arab countries have remained mostly silent as New Delhi moved to strip the Indian-held Kashmir of its limited autonomy, said Associated Press (AP) in a report, and added, “This muted response is underpinned by more than $100 billion in annual trade with India that makes it one of the Arabian Peninsula’s most prized economic partners.”

Saudi Arabia urged restraint and expressed concern over the brewing crisis. Other Gulf countries — Kuwait, Qatar, Bahrain and Oman— do not appear to have issued any statements. The United Arab Emirates has gone a step further by apparently siding with India, calling the decision to downgrade Kashmir’s status an internal matter.

It said the brief Saudi statement on the Kashmir events said the kingdom “is following up on the current situation” and called for a “peaceful settlement” in line with international resolutions.

Gulf Arab states are home to more than seven million Indian expatriates who help drive the region’s economy and keep its cities teeming with doctors, engineers, teachers, drivers, construction workers and other labourers.

In the case of the UAE, the Indians outnumber Emiratis three to one. Bilateral trade surpassed $50 billion in 2018, making India the UAE’s second-largest trade partner.

Indian investments in the UAE amount to $55 billion and Indians are the largest foreign investors in Dubai’s real estate market. Meanwhile, DP World, Dubai’s global port operator, has plans to develop a logistics hub in Indian-controlled Kashmir.

Talking about the impacts of the decision by Modi’s Hindu nationalist government, it would allow Indians from outside the region to permanently settle and buy land, as an attempt to alter Kashmir’s culture and demographics with Hindu settlers.

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These religious tensions have made Kashmir another field of contest between Saudi Arabia, Iran and Turkey to champion the Muslim cause worldwide, said Hasan al-Hasan, an expert on Gulf-Indian relations at the International Institute for Strategic Studies.

“The Turks are trying to cultivate influence in Kashmir. The Iranians are trying to cultivate influence in Kashmir. So I doubt that Saudi Arabia would want to concede a lot of ground to the Turks and the Iranians in terms of this broader symbolic contest over the leadership of the Muslim world,” he said.

Turkey, which has less than $7 billion in annual bilateral trade with India, has thrown its weight behind Pakistan. A readout from a recent call between the President Recep Tayyip Erdogan and Pakistan’s prime minister emphasized Kashmiri self-determination.

Iran permitted a symbolic protest of around 60 students outside the Indian Embassy in Tehran last week, and a senior cleric there told worshippers during Friday prayers that India’s actions in Kashmir were “an ugly move.” However, both President Hassan Rouhani and the foreign ministry have issued more tempered statements, calling for dialogue and peace between Pakistan and India.

In contrast, Saudi Arabia is home to 2.7 million Indians and is India’s second biggest supplier of oil after Iraq, according to Indian government statistics. Saudi oil exports to India dominated $27.5 billion in bilateral trade last year.

On Monday, the eighth day of the military curfew in Kashmir, India announced one of the biggest ever foreign investments in the country — a $15 billion purchase by Saudi Arabia’s state-owned Aramco in India’s Reliance oil and chemicals business. Beyond that, Saudi Crown Prince Mohammed bin Salman has vowed $100 billion of Saudi investments in India by 2021.

Gulf Arab countries may also be wary of supporting Kashmiri rights because it centres on “people’s right to their own freedoms,” said Hafsa Kanjwal, a Kashmiri American assistant professor of South Asian history at Lafayette College.

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“Kashmir is linked to movements for self-determination and people’s rights and democracy, which these Gulf countries, and Israel, are very much against and very much wary of,” Kanjwal said.

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