international factors 173off ered a host of trade, commerce, and investment opportunities. The
Arab countries also provided important trade and aviation links to
Eu rope. Before the advent of long- haul aircraft, Cairo and Beirut were
“important halting stations for India’s West- bound air ser vices.”^35
Since the oil boom of the 1970s, three additional items were added to
India’s list of interests in the Middle East: trade opportunities, energy se-
curity, and the presence of a large skilled, semiskilled, and unskilled In-
dian workforce in the Persian Gulf. All three worked against Israel. Indo-
Arab trade was growing, but India’s bilateral trade with Israel was meager
and negligible. In 1960, the government informed the Lok Sabha that the
size of the Israeli market was small and thus off ered little incentive for
Indian exports.^36 A few years later, another highlighted that bilateral trade
was noncomplementary and competitive.^37 The Indo- Arab trade, on the
contrary, has been complementary. The oil boom and resultant increase of
cash fl ows into the Arab states rapidly expanded India’s export potential to
this region. A signifi cant growth in India’s trade with the littoral states of
the Persian Gulf can be directly traced to the post- 1973 boom. By the end
of the twentieth century, the Gulf region emerged as India’s fi fth- largest
trading partner.
Second, the oil crisis contributed to a massive construction boom in the
Persian Gulf, and a large number of Indians found gainful employment
there. These expatriates also contribute valuable foreign- exchange remit-
tances to India. For example, in 2006 expatriate remittances to India stood
at over US$20 billion, constituting about 3 percent of the GDP. The bulk of
the Indian workforce can be found in the oil- rich Arab countries of the
Persian Gulf, especially Saudi Arabia, the United Arab Emirates, and
Kuwait. Estimates of their presence range from three to four million. This
pro cess not only provides direct employment to a large workforce but also
indirectly sustains much larger dependent populations back home. As
highlighted during the 1991 Kuwait crisis, the expatriate population and
their welfare became an important input into India’s Middle East policy.^38
Third, the oil- rich Arab countries are pivotal for India’s search for en-
ergy security. Economic liberalization has increased its demand for hydro-
carbon resources. Since the early 1990s, more than two- thirds of its oil
needs are met by imports, and according to the Paris- based International
Energy Agency, by 2030 as much as 87 percent of India’s oil needs will
have to be met by imports.^39 Arab countries such as Saudi Arabia, Qatar,
the United Arab Emirates, and Sudan currently supply the bulk of India’s
oil needs.^40