Bracing Trump: $10 Billion Qatar-India Partnership
Qatar's decision to diversify its trade route investments points to a potential IMEC hedge.
Last week, Qatar joined its Gulf counterparts and elevated its relations with India to the level of a Strategic Partnership. In addition to signing multiple bilateral agreements, the Qatari Investment Authority (QIA) also committed to a $10 billion investment to further boost trade. India is a primary importer of Qatari gas, and more than a quarter of Qatar's population hails from the South Asian country—ties that play a significant role in strengthening this relationship. However, Qatar's prior involvement in the Iraq Development Road initiative raises questions about this development, making it appear as a pragmatic backup aligned with the IMEC. Moreover, as Sino-Qatari relations continue to grow, Doha's decision to invest in India reflects an effort to diversify and recalibrate amid U.S. threats.
India-Qatar: Energy-based Relations
Owing to their deep-rooted ties, Qatar, like the rest of the Gulf, enjoys a historic aspect that enriches its relationship with India. Trade between the two regions has been ongoing for centuries, and the oil boom in recent decades brought them closer. The Emirate has hosted the largest share of Indian migrant workers, who have contributed to the economic prosperity of the GCC. Proportionally, they make up around 30% of the population, double that of Qatari nationals, and bring home an annual $4 billion in remittances to India. Annual bilateral trade has been relatively steady, with energy as the primary contributor: Qatar is India's largest liquefied natural gas (LNG) supplier, and imports of LNG from Qatar make up half of all imports, providing 45% of the country’s LNG needs. Doha is capitalising on this foundation to expand ties. In December, QatarEnergy Trading and India’s GAIL reached an agreement to supply LNG at a reduced price over a period of five years. The recent agreements and MoUs are an extension of this growing interest. The MoUs cover economic cooperation and a double taxation avoidance agreement, in addition to a commitment to reach $28 billion in bilateral trade.
The China Factor & Trump
Nevertheless, Doha's economic relationship with rival China is much more robust. Qatari exports to the country have doubled, and bilateral trade has increased by 130% in the past decade. In addition to continuously-expanding LNG cooperation, the Sino-Qatari relationship also includes cultural initiatives, as evidenced by efforts to incorporate Chinese language classes into school curriculums. This educational approach is part of a shared Gulf effort indicating a long-term investment in growing Sino-Arab relations, one India lacks.
The abstract nature of the competing trade route visions passing through South and West Asia places regional actors at the mercy of a constant flux of geopolitical shifts. The Qatari decision to invest in a potential Indian crossroads appears to be an acknowledgment of this, and of the increased potential of an IMEC victory—a win recently highlighted by US President Trump during his trip to India. His call for renewed efforts on the route, coupled with threats of sanctions on China, has likely inspired Doha’s rush to diversify. Should the Gulf follow suit in pivoting towards New Delhi, an India-GCC Free Trade Agreement (FTA) could become more attractive as a shield against a Trump-led financial war against China.