When Oman’s foreign minister made two visits to India last year, once before Indian Prime Minister Narendra Modi’s new government was sworn in and once right after, it became the first Gulf Cooperation Council (GCC) member to commence high-level engagement with the new Indian government. The visits were also a signal that Oman continues to be India’s closest strategic partner in West Asia.
As a country that not only hosts some 700,000 Indian expatriates, but also key Indian listening facilities, Oman is assuming ever-greater importance for New Dehli as an outpost to project Indian influence—especially with the rise of the so-called Islamic State (IS) in Iraq and Syria. The Indian navy, which already has berthing facilities in Omani ports, is expected to increase the frequency of its visits while conducting regular joint exercises. In addition to the heightened naval engagement, Oman will be looking to India for help in diversifying its economy through greater bilateral investment, even as the two countries discuss the feasibility of an undersea gas pipeline involving Iran.
India and Oman actually signed their first military protocol in 1972, which led to Indian navy personnel manning Omani naval units for a period of three years beginning in 1973. Since that time, India has continued to play a role in training Oman’s navy. A 2005 memorandum of understanding on defense cooperation considerably expanded that role, while regularizing the training of Omani naval personnel by the Indian navy in hydrography, diving, training management, logistics management and dockyard management. India now offers training courses to personnel from other wings of the Omani military in its defense institutions on a priority basis.
Moreover, after the declaration of a “strategic partnership” in 2008, Oman became the first GCC member with which India has both an institutionalized biennial naval exercise, known as Naseem Al-Bahr, and an air exercise, known as Al-Jisr Al-Sharqi. The naval exercises have focused on both traditional warfare training as well as on asymmetric scenarios involving nonstate actors. In fact, the Indian navy has used the extension of berthing facilities included as part of the 2005 memorandum to replenish and refuel ships during anti-piracy operations.
The trust built up between the two sides has also resulted in Oman hosting the first Indian listening post in the Persian Gulf, a signal intelligence facility at Ras Al-Hadd, which is now essentially the westernmost outpost of the Indian navy’s growing maritime domain awareness network around the Indian Ocean. This facility is not only very close to the Pakistani coast, it also gives India a bird’s-eye view of a large swath of the Persian Gulf region, where IS activities have increased dramatically.
Indian intelligence gathering may also help Oman deal with the two-decades-long insurgency in its own backyard, in the province of Dhofar. In fact, India provides training and, increasingly, military supplies for Oman’s internal stability, both overseen by the Joint Military Cooperation set up by the two countries in 2006. In order to insulate itself from Islamist activities in Yemen, Oman has also requested India’s assistance in fencing its border with its eastern neighbor.
Oman is also looking to India for support in diversifying its economy, keeping in mind future economic stability. While bilateral trade currently stands at just a shade under $6 billion annually, consisting mainly of Omani hydrocarbon-related exports to India and non-oil imports from India, Oman today is looking for inward investment from Indian companies in areas such as information technology, healthcare, transportation and capital goods manufacturing. During a visit to India in late October, Oman’s commerce minister presented Oman as an ideal location for export-oriented activities by Indian companies given its free trade agreement with the United States, full profit repatriation allowance and tax holidays.
The Omanis are leveraging existing Indian diaspora linkages to serve as intermediaries for attracting Indian investment in the form of joint ventures, some 50 of which already exist in Oman. Indian companies have also been securing lucrative industrial and infrastructure contracts in Oman, with the value of such activities being pegged at $1.25 billion in 2013. The Indian diaspora also remits around $3 billion per year, and Oman is the second-largest GCC investor in India, with growing exposure in the petrochemicals sector.
Indeed, while India-Oman economic engagement is likely to become more multifaceted in the years ahead, hydrocarbons will continue to play a major role. Feasibility studies have shown that an undersea natural gas pipeline from Oman to India can be executed for around $5 billion and transport up to 31 million cubic meters of gas every day. Proposals for Iranian reserves to feed into this pipeline have also been floated.
Iranian involvement in the pipeline project will obviously remain uncertain as long as U.S. sanctions make it especially complicated to deal with Tehran. Nevertheless, the fact that India is moving forward with a $100 million investment in Iran’s Chahbahar port means that Iran’s involvement cannot be ruled out forever. The proposed India-Oman pipeline is in any case expected to include the participation of Qatar, which sells India most of its liquified natural gas (LNG) imports at the moment.
Quite clearly, Oman has emerged as the centerpiece of India’s strategy to put its imprint on the western part of its declared zone of influence, which stretches from the Persian Gulf to the Straits of Malacca. Oman’s multi-dimensional importance to India’s geo-economic architecture virtually guarantees a heightened Indian posture on its soil in the years ahead.
Naval Ties, Economic Interests Drive India’s Outreach to Oman
