India – Iraq Relations

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Context:

French President Emmanuel Macron called for Iraq to be allowed to choose a path not dictated by foreign powers, in an address Tuesday to a summit aimed at helping to resolve Middle East crises. Iraq has been caught for years in a delicate balancing act between its two main allies, the United States and Iran, and Baghdad only recently arrived at a fragile compromise government after a year of political stalemate.

Relevance:

Prelims- Current Affairs of National and International Importance.

Mains- GS-2, India and Its Neighbourhood Relations, Bilateral, regional and global groupings and agreements involving India and/or affecting the Indian interests, Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

INDIA-IRAQ RELATIONS

The bilateral relations between the Republic of Iraq and the Republic of India have traditionally been friendly and collaborative. Basra was for the Arab world not only the market par excellence of the Indian merchandise including textiles, spices, food-grains and other commodities but also of the famous pearl trade that flourished mainly through the Indian traders and jewelers. 

Historical Background

• In ancient times, lands that now constitute Iraq were known as Mesopotamia – ‘the land between the rivers’. And Indus valley civilization had thriving trade relations with it.
• Iraqi port of Basra was used as a hub for Indian merchandise export and pearl trade.
• In medieval times, the relations were defined by the ties of rulers who came from the region. With Indian borders extending up to Kabul at times, Iraq was just the next-door neighbour for India.
• Post decolonization, Iraq has consistently been among the top suppliers of crude oil to India for the last several years.
• During the height of US sanctions against Iran – one of India’s critical oil suppliers, Iraq regularly rotated as the top two largest suppliers to New Delhi, often even trumping Saudi Arabia.
• Iraq used to be the main destination of huge projects for Indian companies.
• The 1952 Treaty of Friendship established and strengthened ties between contemporary India and Iraq. By the 1970s, Iraq was regarded as one of India's closest allies in the Middle East.
• Ties between India and Iraq were disrupted during the Iran–Iraq War, the 1991 Gulf War and the 2003 Iraq War.
• However, the bilateral relations normalised after the establishment of democratic government in Iraq.

AREAS OF COOPERATION

Economic and Commercial Relations

• The economic and trade relations between India and Iraq slowed down after the invasion of Iraq in 2003.
• However, the total bilateral trade has grown steadily since 2010, mainly due to increasing crude oil imports.
• Trade in the subsequent years declined largely due to fall in the global oil prices, however bilateral trade has actually increased in quantity, both in exports and imports.
• In FY 2019-20, Bilateral Trade with Iraq was valued at US$ 25.61 billion.
• Bilateral trade in FY 2020-21 amounted to US$ 15.78 billion.
• The bilateral trade in FY 2021-22 amounted to US$ 34.33 billion, accounting for about 3.32% of our total foreign trade, witnessed an increase due to enhanced economic activities.
• Iraq has now become the 7th largest trade partner of India.
• India opened its Consulate in Erbil, the Capital of Kurdistan region, in August 2016 to further strengthen economic and commercial relations with Iraq.
• In addition to import of crude in bulk oil, India also imports commodities like raw wool and sulphur from Iraq. Indian exports to Iraq consist of cereals, iron and steel, meat and meat products, pharmaceutical products, agro chemicals, cosmetics, rubber manufactured products, paints, gems and jewellery, ceramics, manufactures of metals, machine tools, electrical machinery and instruments, transport equipment, electronic goods, handicrafts, sugar, tea, garments.

Energy Cooperation

• Iraq has consistently been among the top suppliers of crude oil to India for the last several years.
• After becoming the largest supplier of crude oil to India during FY 2017-18, Iraq has been maintaining the position with supplying 51.6 MMT crude oil in FY 2019-20 and 43.0 MMT in the FY 2020-21.
• India’s public sector oil companies, including IOCL, HPCL and BPCL, are the major importers of oil from Iraq. 
• Indian oil companies have deep interests in the Iraqi oil sector.

Common Concerns

• India and Iraq share common regional concerns on the situations in Syria, Iran, Egypt, and Turkey, as well as on Palestine.
• During the pandemic, under the ‘Air Bubble Arrangement’ between the countries, over 10,000 Iraqi nationals have travelled to India for medical treatment.

Capacity Building

• India has annually been providing assistance to Iraq under the Indian Technical and Economic Cooperation (ITEC) programme to train officials of the Government of Iraq.
• Iraqi officials participated in the online e-ITEC programmes especially on COVID 19 pandemic management, Cyber Technologies, AI and Emergent Technologies.
• India has also been offering opportunity to Iraqi students for higher studies in India under ‘General Scholarship Scheme’ (GSS) organized by the Indian Council of Cultural Relations (ICCR).

Indian Diaspora

• Before the Gulf war in 1991, there were more than 80,000 Indian nationals in Iraq. Most of them left Iraq before the war started.
• After the 2003 invasion, thousands of Indian workers were recruited by contractors to provide various services to foreign military bases in Iraq.
• With the lifting of the Government of India advisory against travel of Indians to Iraq which was in vogue from 2004 till May 2010, the number of Indian workers had steadily increased in the more stable Kurdistan region comprising Erbil, Sulaimaniya and Dohuk governorates, with better salaries and working conditions in steel mills, oil companies and construction projects.
• When the ISIS took over large parts of Iraq in 2014, Government of India evacuated thousands of Indian nationals from Iraq. There has been influx of Indian workers to Iraq after the revision of travel advisory in February 2019.
• The total number of Indians in Iraq is now estimated to be around 15,000-17,000, mostly in Kurdistan region, Basra, Najaf and Karbala.
• About 30,000-40,000 Indians visit Baghdad, Karbala, Najaf and Samarrah in Iraq for pilgrimage annually.

AREAS OF CONCERN

Political Instability

• The security situation in West Asia has been continuously deteriorating ever since the onset of the Arab Spring in December 2010.
• The internal security situation in Syria, Iraq and Yemen has gone from bad to worse.
• The regional powers continue to fight proxy wars on sectarian lines, pumping huge amount of money and weapons to bolster their favoured groups.

Terrorism

• The rise of Islamic State has emerged as one of the biggest security threat in West Asia. 
• It has also threatened the security of the Indian diaspora residing in these countries.
• Radicalization of Indian youth and alluring them to join the Islamic State has been another major problem.
• An al Qaeda offshoot known as the Islamic State in Iraq and the Levant (ISIS) has shown particular brutality and poses a significant threat to the region. A large number of Indians have been caught up in the crisis.

China

• India, as one of China’s main rivals and a key ally of the United States, sees the expansion of China’s strategic partnership with Iraq, Quantum mutation of the relation between China and Iraq, Iraq’s joining to China’s ‘One Road-One Belt’ initiative, and China’s becoming the biggest investor in Iraq, as a threat to the spreading of the political and geopolitical role of India in Iraq.

Way Forward

• India’s strong historical and cultural connections with Iraq, along with its growing economic clout, can be the backdrop to jump-start its economic resurgence in Iraq.
• India should work towards developing a trade agreement with the country to further boost the trade.
• India has been annually assisting Iraq under the Indian Technical and Economic Cooperation (ITEC) to train Iraq’s government officials.
• • With new avenues opening up, India should also try to increase the virtual platforms to increase its reach.
• Concerning terrorism in Iraq, India should continue to assist Iraqi officials to combat terrorism.
• • India should consider cooperating with other states to undertake capacity building of the Iraqi security forces so that they can fight against terrorists effectively.
• A terror-free and prosperous Iraq will benefit not only Iraq-India but the whole world.

There is a long way to go before India and Iraq fully regain their old ties. It is time for both the countries to further engage each other and explore new areas of cooperation for mutual benefit.