India and the Abraham Accords

India and the Abraham Accords

Abraham Accords:

• It is the first Arab-Israeli peace deal in 26 years.
• The United Arab Emirates and Bahrain have agreed to establish full diplomatic ties with Israel as part of a deal to halt the annexation of occupied land sought by the Palestinians for their future state.
• The so-called “Abraham Accords”, announced by United States President Donald Trump, secures an Israeli commitment to halt further annexation of Palestinian lands in the occupied West Bank.

Normalisation of ties:

• The formal normalisation of Israel’s ties with the United Arab Emirates (UAE) and the Kingdom of Bahrain has created a significant inflection point in regional history and geopolitics.
• With the newly established formal ties, the two Gulf states have joined Egypt and Jordan which had their peace treaties with Israel in 1979 and 1994.

Significance:

• The UAE and Bahrain do not have any territorial dispute with Israel, nor have they ever been at war with it.
• Although formally committed to an Arab consensus over a two-state resolution of the Palestine cause, these two countries have steadily, albeit secretively, moved towards having substantive links with Israel in recent years.
• Hence, the ‘Abraham Accords’ entered with the UAE and Bahrain are ‘peace-for-peace’ deals without any physical quid pro quo (exchange) by Israel.
• Multiple drivers are likely to spur the two new friendships to grow faster and deeper.
• Externally, Israel, the UAE and Bahrain share the common threat perception of Iran against the backdrop of the ongoing shrinking of Pax Americana in the region.
• Internally, while all three have their respective hotheads opposing this reconciliation, these seem manageable.
• They are relatively more modern societies that share the overarching and immediate priority of post-pandemic economic resuscitation.
• They have lost no time to set up logistics such as Internet connectivity and direct flights to pave the way for more active economic engagement.
• Subsequently, other moderate Arab countries are likely to build formal ties with Israel.

Implications for India:

• Israel’s reconciliation with Egypt and Jordan did not have any major impact on India as its ties with them were relatively insignificant. At present, India has stronger, multifaceted and growing socioeconomic engagements with Israel and the Gulf countries.
• Over eight million Indian diaspora in the Gulf annually account for remittances of nearly $50 billion.
• India’s annual merchandise trade with the Gulf is over $150 billion, sourcing of nearly two-thirds of India’s hydrocarbon imports, major investments, etc.

Diplomatic balance:

• Calling both the countries its strategic partners, India has welcomed the establishment of diplomatic relations between the UAE and Israel.
• But, the Israel-Gulf Cooperation Council (GCC) breakthrough widens the moderate constituency for peaceful resolution of the Palestine dispute, easing India’s diplomatic balancing act.
• The Israel-GCC ties could provoke new polarisations between the Jihadi fringe and the mainstream.
• The possibility of the southern Gulf becoming the new arena of the proxy war between Iran and Israel cannot be ruled out, particularly in Shia pockets.

Economic consequences:

• Defence and security cooperation could act as a stimulus. Both sides are ready to realise the full potential of their economic complementarity in defence and security cooperation.
• The UAE and Bahrain can become the entrepôts to Israeli exports of goods and services to diverse geographies.
• Israel has niche strengths in defence, security and surveillance equipment, arid farming, solar power, horticultural products, high-tech, gem and jewellery, and pharmaceuticals.
• Tourism, real estate and financial service sectors on both sides have suffered due to the pandemic and hope for a positive spin-off from the peer-to-peer interactions.
• Further, Israel has the potential to supply skilled and semi-skilled manpower to the GCC states, particularly from the Sephardim and Mizrahim ethnicities, many of whom speak Arabic.
• Even the Israeli Arabs may find career opportunities to bridge the cultural divide.
• Israel is known as the start-up nation and its stakeholders could easily fit in the various duty-free incubators in the UAE.

Way forward:

• India has acquired a large and rewarding regional footprint in the Gulf. It is particularly preferred as the source of manpower, food products, pharmaceuticals, gem and jewellery, light engineering items, etc.
• Indians are also the biggest stakeholders in Dubai’s real estate, tourism and Free Economic Zones.
• In the evolving scenario, there may be scope for a profitable trilateral synergy, but India cannot take its prevalence for granted.
• India must be careful and should monitor or even pre-empt any threat to its interests in the Gulf.
• Even more important for India is to manage the economic fallout of the Israel-GCC reconciliation.