India-Bahrain Relations | UPSC Notes

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India-Bahrain Relations | UPSC Notes

• India and Bahrain have ties to each other’s cultures, and their political, economic, and cultural interactions are always friendly.

• Our two countries have been trading with each other for about 5,000 years, from the time of the Dilmun civilization in Bahrain to the time of the Indus valley civilization in India. • It is thought that ancient Bahraini traders made a lot of money trading Indian spices for Bahraini pearls. • Bahrain is the most mature and well-established business hub in the Gulf, with one of the largest financial institutions there. Also, Bahrain is important from a military point of view because it is close to other GCC countries and is in the middle of the Gulf.

• The fact that more than 350,000 Indian citizens are among Bahrain’s 1.2 million people is an important part of India’s relationship with Bahrain. Bahrain and India agree on a lot of the same things about a wide range of world problems.

• Geography: Bahrain, which is officially called the Kingdom of Bahrain, is an island country in Western Asia. It is on the Persian Gulf and has a small archipelago with 50 natural islands and 33 man-made islands. Bahrain Island, which is the largest island, makes up about 83 percent of the country’s landmass.

The country is between the peninsula of Qatar and the north-eastern coast of Saudi Arabia. It has a high Human Development Index and is considered a high-income economy by the World Bank. Bahrain is part of the UN, the Arab League, the Organisation of Islamic Cooperation, and the Gulf Cooperation Council.

Political Areas of Cooperation

• Visits of the HRH Crown Prince to India: At the request of Shri Bhairon Singh Shekhawat, who was Vice President of India at the time, HRH Shaikh Salman bin Hamad Al Khalifa, the Crown Prince of Bahrain, made an official trip to India from March 19 to 22 of 2007.

• State visit of His Majesty King Hamad bin Isa Al Khalifa: From February 18-20, 2014, His Majesty King Hamad bin Isa Al Khalifa made his first state visit to India. He did this at the request of Shri Pranab Mukherjee, who was President of India at the time.

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• Visit of Minister of Foreign Affairs of Bahrain: In April 2021, H.E. Dr. Abdullatif bin Rashid Al Zayani, Minister of Foreign Affairs of Bahrain, went to India and co-chaired the 3rd High Joint Commission meeting with Dr. S. Jaishankar, Hon’ble External Affairs Minister.

• State visit of Hon’ble Prime Minister Shri Narendra Modi: At the request of HRH Prince Khalifa bin Salman Al Khalifa, who was Prime Minister of the Kingdom of Bahrain at the time, Prime Minister Shri Narendra Modi paid a State visit to the Kingdom of Bahrain on August 24 and 25, 2019. Prime Minister Modi’s trip to Bahrain was the first public trip to Bahrain by an Indian Prime Minister.

• Visit of External Affairs Minister (EAM) Dr. S. Jaishankar: On November 24 and 25, 2020, EAM Dr. S. Jaishankar went to Bahrain. The main words of sympathy for the death of the former Prime Minister of Bahrain and thanks for how well the Indian community was cared for during COVID-19 were well received.

Economic Relation:

According to the Ministry of Commerce, trade between the two countries was worth $762.01 million in 2016–17. In 2018-19 and 2019-20 (April–December), total trade between the two countries is worth USD 1282.96 million and USD 753.60 million, respectively.

• The total amount of money that India put into Bahrain between January 2003 and March 2018 is thought to be about USD 1.69 billion.

The financial services sector has the most valuable investments (40% of all projects), followed by the real estate sector and the leisure sector.

• Imports of goods and services from India increased because Bahrain was relatively wealthy and had better living standards.

• The government of Bahrain’s policy of diversifying its industries also played a big part in making it easier for India and Bahrain to work together economically.

• Because of where it is, Bahrain is the way in to the GCC market.

• The Bahrain-India Joint Business Council was set up in 1994 to help businesses on both sides talk to each other more often.

• In 2012, India and Bahrain signed a deal to share tax information so that their economies could work together and they could spend together.

• India’s main 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 clothing and clothing accessories, etc. India’s main imports from Bahrain are crude oils, mineral fuels, their bituminous substance, distillation, aluminium, fertilisers, ores/slags/ashes of aluminium, iron, and copper, pulp,

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The nearly 3.5 million Indians who live abroad are treated well by both the Bahraini government and their companies. Indian expats are more trusted than other expatriates from the subcontinent. This is because Indian expatriates have strong work ethics and don’t care about politics. There is also a place called “Little India” in Bahraini Capital.

In November 2015, Bahrain started the “Little India in Bahrain” project to recognise and honour the contributions of the Indian people to Bahrain’s history and development.

Cultural Relations:

In 2019, India started a USD 4.2 million project to fix up the Sri Krishna temple in Manama, which is the city of Bahrain.

The 200-year-old temple is a sign of how long India and Bahrain have been friends.

• India and Bahrain have always had a very strong trade relationship. Indian companies have used the island Kingdom for a long time as a way to get to markets in the west.

Security and Counter-Terrorism

• Bahrain’s strategic location in the Persian Gulf makes it an important partner for India’s oil security and safety at sea.

• Both India and Bahrain have spoken out against terrorism, saying that it is dangerous for all countries and groups.

• India and Bahrain have also agreed to work together more to share information about investigations into terrorism and organised crime.

International Solar Alliance (ISA):

• Bahrain became the 86th member of the ISA on March 28, 2022, when it handed in the Instrument of Accession at the 5th Foreign Office of Consultations in New Delhi.

Bilateral Agreements/Memorandums of Understanding (MoUs)

• Treaty on Extradition, signed in January 2004

• Memorandum of Understanding on Cooperation in Information and Communication Technology (May 2012)

• Memorandum of Understanding about the creation of a Joint High Commission (February 2014)

• MOU on the Development and Management of Water Resources (February 2015)

• Agreement on working together to fight international terrorism, transnational organised crime, and the trade of illegal drugs, narcotics, psychotropic substances, and precursor chemicals (December 2015)

• MoU for Cooperation in the Fields of Renewable Energy and Healthcare and Agreement on Exemption from Short Stay Visa for Holders of Diplomatic and Special/Official Passports (July 2018).

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• Memorandum of Understanding on cooperation in the peaceful study and use of outer space (March 2019)

How important Bahrain is to India

• Bahrain is a member of the Gulf Cooperation Council (GCC), which makes it important for India’s interests, especially when it comes to the Kashmir problem.

• India needs Bahrain’s help if it wants to get a permanent place on the UN Security Council.

• India gets crude oil from Bahrain, but India also sends goods and services to Bahrain to sell. The country is a route for increasing trade with GCC countries. The large number of Indians who live in Bahrain and send money back to India are important for India.

• The “Look West” policy is a big sign of purpose, and we can expect trade and diplomatic ties between the GCC and India to get stronger. The large number of Indians who live in the area can help increase trade flows. Bahrain will be at the centre of this, and when the GCC reopens, this is expected to bring in tens of millions of dollars more.

• Indian companies are doing more business in fields like health care. Indian exporters can easily do business in the GCC because it is close to the subcontinent, has world-class logistics facilities, and is home to some of the biggest logistics companies.

Way Forward

• Both India and Bahrain would like to see a Double Taxation Avoidance agreement and a Memorandum of Understanding (MoU) on defence cooperation. • Because Bahrain is in the middle of the Gulf, Indian businesses can use it as a hub to reach the fast-growing markets in the Gulf, Middle East, and North Africa (MENA). So, not only is the link important for India’s growth, but it is also important for Bahrain, which needs the market to diversify its trade.