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After one year of the blockade, the economy of Qatar is linked more dynamically beyond its immediate neighbourhood. The crisis, despite its huge cost in the short run, is turning out to be an opportunity for Qatar to come out of the regional hegemonic construct. The IMF in its report certified that the medium-term macro-financial outlook for Qatar is expected to remain broadly favourable. Overall, GDP growth of 2.6 per cent is projected for 2018. Hugely dependent on its neighbours to meet its consumption needs, the country was in panic mode in the initial few days but looking back it appears that it did manage to negotiate with issues from an existential crisis.

The Indian engagement with Qatar may not be very large in terms of volume of trade but is very critical. The current bilateral trade is estimated to be around US$10 billion; the Indian imports are US$9 billion while exports about a billion. The trade balance is in favour of Qatar and the asymmetry is due to the high volume and value of LNG imports. Qatar provides 65 per cent of Indian LNG imports or 10 million tons of LNG from Qatar. Apparently, the crisis did not have any negative impact on LNG supplies.

The period witnessed Qatari moves to expand LNG relations with India beyond trade. Al Kaabi President & CEO of Qatar Petroleum and the Chairman of Qatargas visited India in March to explore the possibilities of transforming the relationship towards mutually beneficial investment projects. India has expressed its intent to be part of in Qatar's expansion of its gas production in its North field and has been seeking Qatari investments in its power plants.

However, the logistics did affect Indian exports to Qatar. They mainly consist of electrical machinery, iron and steel products, plastics industrial machinery, etc. According to Federation of Indian Exporters Organization, “India’s engineering exports to Qatar declined from US$363 million in 2015-16 to US$213 million in 2016-17. Average monthly engineering exports also declined from US$30 million to US$18 million in the last financial year. Automobile exports to Qatar had sharply declined by 70 per cent from US$73.59 million to US$21.70 million in 2016-17.”

This happened largely due to delays in shipment. Once the logistics were smoothened not only the loss would be recovered but new volumes would be added. Indian Ambassador in Doha reportedly observed that “there is almost a 50 per cent increase in exports from India to Qatar in the 10-month period after the blockade compared to the corresponding period before it… The increase has been mainly witnessed in food products, building materials and machinery." 

One positive consequence of the blockade on the bilateral relations has been the opening of a new maritime service between the two countries. Port of Hamad in Qatar was linked directly with Mundra and Nhava Sheva ports in India by starting Qatar-India Express Service and the first vessel reached within days of the blockade, June itself. Two ships —  Hansa Magdeburg and Hansa Duburg — will make the weekly trips, arriving at Hamad Port every Friday and departing the following day.

Qatar is investing to develop Hamad port to triple its capacity to make it regional a trans-shipment hub. To further enhance its supply line, Qatar has initiated a plan to develop land route via Iran and Turkey. It is observed that the new land transport line from Mardin city in Turkey to Bushehr port in Iran would shorten the duration to two or three days. The distance between the two cities of 1,700 km can be covered by trucks in about 22 hours. The distance between Bushehr and Hamad Port in Qatar can be covered by Ro-Ro ships in just 8 hours. In short, “truck with Turkish goods can reach to Doha through this route in less than two days." Certainly, the trade route will boost the bilateral trade between Turkey and Qatar in a big way,

The crisis highlighted the vulnerability of the country of being heavily dependent on external supplies, especially for food items. Before the crisis, Qatar was importing 90 per cent of its food requirement through land route at Abu Samra border and this was closed by the blocked. In the first few days, the country was on edge and had to make special efforts to procure food supplies from Iran, Turkey, Pakistan and India on an emergency basis. The Indian export of fruits and vegetable increased by 15 per cent in the first two weeks of the crisis. It is reported that Lulu Hypermarkets has imported 65 tonnes vegetables and banana of different varieties in a chartered flight from India and the two countries have signed agreement to bolster agriculture resources of Qatar with the latter investing US$500 million in an Indian Food production company, Bush Overseas.

One of the immediate concerns in the South Block was of safety and security of Indians in the country. The embassy issued an advisory to its nationals to be alert but not panic. There are 630,000 Indians working in the Emirate and a large number of them are from Kerala. Interestingly but understandably the Chief Minister of Kerala Pinarayi Vijayan wrote to the Prime Minister Narendra Modi and External Affairs Minister Sushma Swaraj about his concerns on the possible geopolitical fallout of the crisis and its implication for the security of Indians. The External Affairs Ministry was of the view that it was an internal matter with no challenge to India and the welfare of the Indians was raised during the visit of Qatari Foreign Minister Sheikh Mohamed bin Abdulrahman Al-Thani in August 2017. According to diplomatic sources, “The minister assured us of the continued safety, welfare and well-being of the Indian community and briefed the Indian side about new labour laws in Qatar which favour expatriate workers."

In the wake of the crisis, Qatar is likely to be a new landscape. Though compelled by geography it will remain a GCC outfit in a manner of description but it will be more a part of extra-regional geo-economics space. The post-crisis Qatar mean, “new markets, food security, self-sufficiency, permanent residency and open immigration policies. This is a new era for us. Qatar will be different from how it was before the crisis," observed Yousuf Mohamed, CEO of Qatar Financial Centre. From the perspective of Link West policy of India towards the region, it is challenging time. The crisis came at a time when India was pushing its relation with the region with pace and the Qatar crisis has opened a new window of goodwill transaction for both. Even during the past one year, India expanded its engagement successfully.

Though Qatar has been able to negotiate well with the crisis in its first year, it cannot visualize its future on a crisis mode. A country that heavily depends on external transactions has to create a climate of confidence for the stake holders. The sharpening of fault line will restrict India’s space in the region. Escalation of tension to conflict level bound to pose a threat to its collateral in the region. Unlike those who are doing business in the crisis, India needs to weigh the possibility of initiative from emerging Asian powers to step in. Not only their stakes are higher, but it is also their extended neighbourhood as well.



As part of its editorial policy, the MEI@ND standardizes spelling and date formats to make the text uniformly accessible and stylistically consistent. The views expressed here are those of the author and do not necessarily reflect the views/positions of the MEI@ND. Editor, MEI@ND: P R Kumaraswamy