India-Qatar Relations

Context: The recent death sentence for eight Indian individuals accused of espionage in Qatar has deeply shocked the Ministry of External Affairs. This situation is a significant test for the government’s diplomatic skills. The trial was highly secretive, with limited information on charges and evidence. Indian officials’ efforts to seek leniency and transparency have been ineffective. Strained ties resulting from this sentencing would harm both nations. The Indian government must act swiftly to provide strong support during the appeals process for these citizens.

About Indian and Qatar relations

Throughout the 20th century, India’s interactions with Qatar were primarily centred around a modest yet thriving pearl import trade and the export of spices.
The turning point for Qatar came with the discovery of onshore Dukhan oil field in 1940, followed by the country’s first offshore oil field two decades later, coinciding with a substantial increase in global oil prices.

Economic Ties

In recent years, the trade volume between India and Qatar has experienced noticeable fluctuations
During the fiscal year 2015-2016, trade exchange between the State of Qatar and the Republic of India saw impressive growth, reaching a remarkable $10 billion.
However, in the past few years, there has been a noticeable decline in the trade volume between the two countries due to the decreasing rates of gas and oil in the international market.

Trade Statistics and Import Dependence

In the fiscal year 2022-23, India’s total imports from Qatar amounted to $16.81 billion.
India’s major imports from Qatar are related to fossil fuels, including liquefied petroleum gas (LPG), plastics, and petrochemical products.
In contrast, India’s exports to Qatar were valued at just $1.97 billion during the same fiscal year, encompassing items such as cereals, copper articles, iron and steel products, vegetables, fruits, spices, and processed food items.

Investment Interests and Collaborative Projects

Qatari authorities, including the Qatar Investment Authority, have expressed their interest in making investments in India, particularly in infrastructure development, encompassing roads, highways, economic corridors, in addition to projects related to gas and fertilizers.
In return, India is keen on direct investments in the manufacturing and production of liquefied natural gas and associated chemical industries, with a special focus on fertilizer production, urea, petrochemicals, and infrastructure projects related to the natural gas industry, oil drilling, minerals, and power.

India’s Growing Energy Needs

Given India’s economic development and the tangible growth experienced in recent years, the nation’s demand for energy sources is on the rise.
India has adopted an ‘Energy Security’ policy, relying on politically and socially stable countries to provide energy sources.
The energy partnership traces back to an agreement signed by both nations in 1990, wherein India committed to purchasing 7.5 million tonnes of LNG annually over a 25-year period.
Subsequently, in December 2015, both parties further solidified their collaboration by agreeing that Qatar would augment its LNG supply to India by an additional one million tonnes annually.

Collaboration in Defence Affairs

India’s engagement in defence collaboration with Qatar has predominantly focused on training, participation in each other’s conferences and events, as well as visits by Indian Navy and Coast Guard vessels.
A notable instance of this collaboration is evident in the naval exercise termed ‘Zair-Al-Bahr’ (Roar of the Sea), which signifies a significant joint effort between the Indian and Qatari Navies.
Both India and Qatar have expressed a mutual commitment to working together in combatting the financing of terrorism.

Cultural Interaction

Indian Cultural Centre (ICC) functions as the leading organization overseeing Indian community associations, operating under the auspices of the Embassy of India in Doha and benefiting from support by private sponsors.
India places immense significance on Qatar’s role as a co-sponsor of a United Nations General Assembly Resolution, a historic unanimous resolution backed by 177 co-sponsors, which designates June 21 as the International Day of Yoga (IDY).

Indian Diaspora in Qatar

The Indian community in Qatar constitutes the largest expatriate group, estimated to be approximately 700,000 strong.
Their contributions span various sectors, with notable involvement in projects related to the preparation of the Qatar 2022 FIFA World Cup.
The remittances sent by the Indian expatriate community in Qatar to India are estimated to be approximately 750 million dollars annually.

Irreplaceable Role of Qatar as an LNG Supplier

The linchpin of this bilateral trade relationship remains liquefied natural gas (LNG), with Qatar supplying 80% of India’s LNG needs. This critical energy connection underscores the importance of India’s economic ties with Qatar, even if the overall value of bilateral trade may appear modest in comparison to the United Arab Emirates (UAE).

1.Trade Imbalance:

In the case of India and Qatar, trade significantly favours Qatar. This trade imbalance is predominantly attributed to the prominence of natural gas, particularly LNG. LNG not only constitutes a substantial portion of India’s imports from Qatar but also represents nearly 50% of India’s total imports in terms of value from the country.

2.India’s Increasing Reliance:

The Indian government is actively promoting increased natural gas consumption, this reliance is expected to grow in the coming years, even with a potential increase in domestic natural gas production. India’s largest LNG importer, the government-owned Petronet LNG, has a substantial long-term contract with Qatar for LNG imports. As India aims to raise the share of natural gas in its primary energy mix to 15% by 2030, it’s inevitable that LNG imports will see a substantial increase.

3.Cleaner Energy Alternative:

Natural gas is regarded as a cleaner and more cost-effective alternative to traditional petroleum fuels like diesel and petrol. Given India’s high dependency on crude oil imports (over 85%), natural gas not only offers a cleaner energy source but also aligns with India’s energy transition objectives. Consequently, the case of the Indian naval personnel facing the death penalty in Qatar presents a delicate diplomatic challenge, as the secure supply of natural gas is pivotal to India’s energy security.

4.Qatar’s Dominance:

India imported a total of 19.85 million tonnes of LNG in the fiscal year 2022-23, with approximately 54% of this LNG. This significant reliance on Qatar, both through long-term contracts and spot purchases, underscores the challenge of diversifying India’s sources of LNG.

5.Qatar’s Strength in the Global LNG Market:

In the global LNG market, Qatar holds a unique position of strength, particularly in the wake of Russia’s invasion of Ukraine and the subsequent disruption in Russian natural gas supplies to Europe. This geopolitical situation has increased price volatility in LNG spot cargoes, making long-term contracts more attractive for securing stable supplies. Qatar, as the world’s largest LNG exporter, has capitalized on this trend by entering into numerous long-term LNG supply agreements with various countries.

India, recognizing the need for energy security and price stability, is actively pursuing long-term LNG contracts with major suppliers, with Qatar being a prominent choice. Despite the possibility of the global LNG market transitioning into a buyer’s market due to upcoming export projects, India’s continued dependence on Qatar is expected to persist for several years.

Leveraging Opportunities for Enhanced Relations

Protection of Indian Expatriate Workers: India should prioritize negotiations to safeguard the rights and well-being of its expatriate workers in Qatar, many of whom have faced labor-related challenges.
Collaboration on Environmental Sustainability: India and Qatar can work together to develop a cleaner and more energy-efficient environment.
Cultural Exchange and Soft Power: Given the popularity of Bollywood among Qataris, India should explore additional avenues for cultural exchange to bolster its soft power influence.
Education Sector Cooperation: The presence of Western universities in Qatar offers an opportunity for Indian students to receive quality education abroad without the usual long distances and high living costs. Strengthening cooperation in the education sector could further enhance the India-Qatar relationship, which has demonstrated resilience throughout the seemingly intractable diplomatic crisis.