RIL- Aramco Deal To Come With Business, Strategic And Geopolitical Implications
  • The decision by oil giant Aramco to pick up a 20% stake in the hydrocarbon businesses of Reliance Industries is a move that is going to come along with business, strategic and geopolitical implications.

That this deal — a marker of close and strengthening ties between the two nations — has been announced at a time when Pakistan is trying to rally the Muslim world against India for its move on Kashmir, suggests Pakistan’s diplomatic isolation and underscores Narendra Modi’s major foreign policy win.

One of Modi’s key foreign policy planks has been to improve India’s relationship with countries in West Asia, where India has huge strategic and economic interests and enduring people-to-people ties. In his first term, Modi focused on building and nurturing ties with key players to safeguard India’s interests and, at the same time, strike a personal chord with nearly all West Asian leaders, many of whom do not see eye to eye. Modi’s West Asia policy has increased India’s sway in a region of critical importance to New Delhi. For instance, Saudi Arabia lifted a 70-year-old airspace ban in March 2018 to give Air India permission to fly over its territory and reach Israel.

As professor PR Kumaraswamy of Jawaharlal Nehru University writes in a piece for Institute for Defence Studies and Analysis, “Modi has skilfully balanced the Israeli-Palestinian, Saudi-Iranian and Saudi-Qatari binaries and furthered India’s interests. Saudi and Emirati leaders have bestowed their highest honours on Prime Minister Modi just days before the Lok Sabha elections, thus indicating the status of India’s relations with the Muslim world under Modi.”

With the rise in India’s economic and regional profile — the country’s $2.7 trillion economy outstrips that of Pakistan by more than eight times — Modi’s diplomatic overtures have meant that the West Asian nations who form the core of the “Muslim world” are more mindful of India’s sensibilities and find little merit in reflexively backing Pakistan.

The Saudi Arabian oil giant’s move to buy the RIL stake for an enterprise value of $75 billion in a deal that qualifies as one of the largest foreign direct investments in India reinforces exactly this point — that countries in West Asia are keen to profit from India’s big and growing energy market, and are keen to develop ties with an emerging superpower, rather than remaining locked within an “Islamic ummah” identity.

This is also a reality check for Pakistan — where the Aramco-RIL deal has caused major heartburn — that it lacks the diplomatic or economic resources to force India’s hand on a topic that its central to its existence. Pakistan had set out to diplomatically isolate India following the Modi government’s move to invalidate Article 370 and Article 35A, revoke the statehood and autonomous status of Jammu and Kashmir and bifurcate the state into two Union territories — Jammu and Kashmir, and Ladakh.

The move caught Pakistan unawares, which only recently was basking in the glory of United States president Donald Trump’s offer of “mediation” between India and Pakistan on Kashmir. A furious Pakistan launched an all-out campaign against India and threatened to use “all possible options”. It has, so far, downgraded diplomatic ties with India, suspended bilateral trade, announced a review of bilateral agreements, banned Indian movies, train and bus services between the two nations and sent emissaries to the United Nations, China and Islamic nations as part of a high-on-noise campaign against India.

The Pakistan foreign minister Shah Mahmood Qureshi recently asked citizens not to live in a “fool’s paradise” that the UN Security Council will back its position against India on Kashmir. Qureshi told the media in Muzaffarabad, PoK, that the issue may not swing in Pakistan’s direction at the UNSC. “The Muslim ‘Ummah’ (Islamic community) may not back Pakistan on Kashmir as India is a big market where ‘many people’ have invested,” he was quoted as saying.

Pakistan has obviously noted that its appeal to the ‘Islamic ummah’ to raise its voice as ‘one’ went unheeded. Most Islamic nations such as Saudi Arabia, Iran and Maldives backed India’s position. The UAE, which had in April this year conferred the Zayed Medal, its highest civilian honour, on Modi, went one step further in declaring that the revocation of Article 370 was India’s “internal matter” and the move may “improve social justice and security and confidence of the people in the local governance and will encourage further stability and peace.”

This position by Islamic nations is not a coincidence. It is in part due to Modi’s diplomatic overtures and part due to new realities that include India’s greater economic and regional heft, the devaluation of Kashmir as a geopolitical issue globally and, as Guy Barton has argued in The Diplomat, “rivalries between Pakistan and some of these (West Asian) states have been more problematic than those with India, thereby overshadowing issues like Kashmir.”

In this context, the Aramco-RIL deal assumes even greater significance. It is not about Reliance Industries paring its debts into a ‘zero-debt’ company or increasing its crude sourcing capabilities, it is the marker of India’s growing clout and a clear trashing of the line taken by Pakistan (mirrored by a section of Indian and western commentators and regrettably, Indian National Congress) that Kashmir is India’s Palestine, and is a place where massive human rights violations take place. It is an endorsement of India’s deft handling of an issue through an idea whose time had come.

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