Saudi-Iran conflict: India needs to safeguard its interests
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Issue Courtesy: South Asia Monitor | Date : 03 Feb , 2016

The execution of Shia religious scholar Nimr al-Nimr in Saudi Arabia set in motion a series of unfortunate events that have the potential to deepen instability in the volatile Middle East, and whose reverberations will be felt throughout the world.  

Saudi Arabia broke off diplomatic ties with Iran after an attack on its embassy in Tehran, and has been prodding its allies to do the same. The recent flair-up in the adversarial relations between the two archrivals comes at a time when the region, wracked by perennial conflict, is in need of Tehran and Riyadh to play a stabilizing role. This, however, seems unlikely as both are engaged in a power struggle for regional hegemony, which overlaps with the age-old tussle between Shias and Sunnis.

The present situation in the region presents a diplomatic dilemma for India which has maintained good relations with both the countries. India can no longer rely on the security umbrella provided by the West and will have to adopt a more proactive approach to the region. What will that entail? Will New Delhi have to pick sides and, in the process, isolate some of its old friends? Indian foreign policy is entering an unchartered territory where its diplomatic acumen will have to pass its most difficult test so far.

Saudi-Iran confrontation

The current standoff between Saudi Arabia, which claims to be the champion of the Sunni cause, and the Shia Iran, can have disastrous consequences for regional stability and international security. Both are involved in the most contentious regional issues, in some cases having the influence to affect outcomes. Regional tensions between Shias and Sunnis are already high and will play out in Syria, Iraq, and Yemen. The renewed international efforts to halt the conflict in Syria could get derailed as friction increases and both become unwilling to concede ground.

Riyadh can be expected to take a hard stance on Assad regime’s patrons, Iran and Russia and will be inflexible on the composition of the opposition’s delegation at the planned talks later this month. The fledging efforts to counter jihadist outfits like Al-Qaeda and IS will be further complicated. In Lebanon, the political settlement after a twenty month long power vacuum can be derailed. The debilitating effect of the confrontation is already evident in Yemen where the collapse of truce coincided with Saudi-Iran standoff. Despite assurances from both sides that the drift is a bilateral issue and will not affect ongoing peace processes, world community’s concerns cannot be assuaged as both will be unwilling to make concessions.

Riyadh’s growing insecurity about the changing balance of power in the region, especially in the wake of rapprochement between Iran and the West, has nudged it to adopt a more muscular approach to foreign policy. The execution of cleric Nimr al-Nimr was meant to send a message to Iran and the world that Saudi Arabia will resist Iran’s push for dominance in the region. The country is under stress from mounting domestic challenges- a battered economy over falling oil prices, demands for reforms and a divided House of Saud.

Under the leadership of Mohammed bin Salman, the young Defense Minister and Deputy Crown Prince, the country has shown a willingness to undertake unilateral steps to safeguard its interests, manifest in the 34 nation strong coalition of mainly Muslim countries – including powers such as Egypt and Turkey – to coordinate a fight against “terrorist organisations”. He is also believed to be the force behind Riyadh’s southern misadventure in Yemen. The Kingdom’s allies in the Arab world have been muted in their criticism. While Bahrain has broken off diplomatic ties, UAE and Kuwait have restricted their response to downgrading diplomatic relations.

Indian Predicament

The tug-of-war between Iran and Saudi Arabia presents a diplomatic dilemma for India. India is heavily invested in the Middle East and any instability in the region is to its detriment. An import-dependent country, more than 70% of India’s crude oil comes from the Middle-East. As its economy grows, Indian reliance on the GCC countries and Iran to meet most of its energy needs will only increase in the future. Its seven million strong expat community sends back $40 billion annually in remittances.

The conflict also presents a challenge for its bilateral relations with Iran and Saudi Arabia, both countries with whom it has maintained good relations. This has been possible due to its policy of staying neutral in regional conflicts. Many have argued that India should use its diplomatic capital to play a more proactive role in steeling disputes in the region. However, the fear of domestic repercussions has kept India away. Both Saudi Arabia and Iran are of strategic and commercial importance, making it imprudent for India to take sides in the conflict.

Saudi Arabia hosts the maximum number of Indian expatriates and is a major employer of Indian nationals. Economic and commercial links with the country have improved over the years, with the Arab Kingdom becoming India’s number four trade partner and a significant partner in the area of investments and joint ventures. It is a key security partner in an unstable region and shares India’s concerns over combating terrorism. Due to falling oil prices and mounting unemployment for people under 30 who constitute 70 per cent of the population, there are concerns that the Gulf Kingdom might not remain a key employment destination as it becomes more inward-looking.

New Delhi hopes to reinvigorate economic and strategic engagement with a resurgent Tehran. Iran, with the world’s second largest gas reserves and fourth largest oil reserves, is crucial for India’s energy security. India primarily imports oil from Iran but in the light of restrictions imposed by global powers over its nuclear program the relationship did not reach its potential. India will not find it easy to court Iran as in the changed environment a more assertive Iran will drive hard bargains as it will have a multiplicity of customers and partners to choose from.

Already China has become Iran’s largest trading partner. Iran and India share similar concerns over Afghanistan and future role of Pakistan in the country and have decided to hold ‘structured and regular consultations’. Iran can act as India’s entry point to Afghanistan and energy-rich Central Asian region, as has happened in the case of Chabahar port. Located 72km west of Pakistan’s Gwadar port, Chabahar port in Iran allows India to circumvent Pakistan and opens up a route to Afghanistan.

The challenges for India emanating from crisis in West Asia are multifold. Its eight million-strong community settled in the region remains vulnerable, as was evidenced during the crisis in Yemen. India had to undertake a massive rescue operation in April last year to evacuate 4,000 Indian nationals. An uninterrupted flow of energy is of crucial importance for energy-hungry India. On the domestic front, many fear that Shia-Sunni conflicts in the Middle East will flame sectarian conflicts in the country. More than 90% of Muslims in India are Sunni but opinion is divided on the extent of their allegiance to Saudi Arabia. Domestic consequences of conflicts in the Middle East will remain limited on the plural society of India.

Concerns over spillover effect of Shia-Sunni tensions on domestic security of India have kept India away from getting involved militarily in the region. Unlike in the past, however, India can no longer rely on the security umbrella provided by the West to safeguard its interests in the region. US’s approach to the region has been circumspect and its allies in the West have been unwilling to replace it. India has both the need and the resources to play a more active role in the region to safeguard its interests.

The region is witnessing the breakdown of the old order whilst the new order is still in formation, presenting India with the opportunity to insert itself in the region’s security architecture. The region wants to engage Asian countries and we need to take advantage of this by upgrading our bilateral relations with the stable states. Hence, India should focus on strengthening its bilateral, political, and economic and security ties with (relatively) stable countries within the region, diversifying its relations and moving beyond energy trade. India’s security cooperation with Saudi Arabia is a case in point.

India should also be willing to work in tandem with other Asian countries where their interests converge. Thinking ahead, India should develop contingency plans for potential fallout of conflicts in the region, like devising a viable plan to ensure the safety and security of Indian diaspora and countering the effects of falling remittances in case people choose to move back to India.


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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Meenakshi Sood

is a Research Scholar at the Jawaharlal Nehru University, New Delhi. She can be reached at:

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