India and Bahrain have civilizational linkages and enjoy excellent bilateral relations characterized by cordial political, economic and cultural contacts.
Our bilateral Trade and commercial exchanges go back to about 5,000 years ago tracing their origins to the period of Dilmun Civilizationin Bahrain to the era of Indus valley civilization in India.
Ancient Bahraini traders are believed to have carried out flourishing trade of Bahraini pearlswith Indian spices from India.
Bahrain is the most mature, well established business hub with one of the largest financial institutions in the Gulf. Also, the proximity of Bahrain to other GCC countries and its location midway in the Gulf gives it a strategic importance.
Presence of over 350,000 Indian nationals out of a total of 1.2 million residents in Bahrain is an important aspect of India’s bilateral relations with Bahrain. There is a large degree of convergence between Bahrain and India on a wide range of global issues.
Geography
Bahrain, officially the Kingdom of Bahrain, is an island country in Western Asia.
It is situated on the Persian Gulf, and comprises a small archipelago made up of 50 natural islands and an additional 33 artificial islands, centered on Bahrain Island which makes up around 83 percent of the country’s landmass.
The country is situated between the Qatari peninsula and the north eastern coast of Saudi Arabia.
It subsequently has a high Human Development Index and is recognised by the World Bank as a high-income economy. Bahrain is a member of the United Nations, Non-Aligned Movement, Arab League, Organisation of Islamic Cooperation and the Gulf Cooperation Council.
Areas of Cooperation
Political
Visits of the HRH Crown Prince to India: At the invitation of the then Hon’ble Vice President of India, Shri Bhairon Singh Shekhawat, HRH Shaikh Salman bin Hamad Al Khalifa, the Crown Prince of Bahrain paid an official visit to India from March 19-22, 2007.
State visit of His Majesty King Hamad bin Isa Al Khalifa: At the invitation of the then Hon’ble President of India, Shri Pranab Mukherjee, His Majesty King Hamad bin Isa Al Khalifa paid his first state visit to India from 18-20 February 2014.
Visit of Minister of Foreign Affairs of Bahrain: H.E. Dr. Abdullatif bin Rashid Al Zayani, Minister of Foreign Affairs of Bahrain visited India and co-chaired, the 3rd High Joint Commission meeting with Dr. S. Jaishankar, Hon’ble External Affairs Minister in April 2021.
State visit of Hon’ble Prime Minister Shri Narendra Modi: At the invitation of HRH Prince Khalifa bin Salman Al Khalifa, the then Prime Minister of the Kingdom of Bahrain, Prime Minister Shri Narendra Modi, paid a State visit to the Kingdom of Bahrain on 24-25 August 2019. The visit of Prime Minister Modi to Bahrain was the first-ever official visit by an Indian Prime Minister to Bahrain.
Visit of Hon’ble External Affairs Minister (EAM), Dr. S. Jaishankar: EAM Dr. S. Jaishankar visited Bahrain on 24-25 November 2020. The key messages of condolence on the demise of former Prime Minister of Bahrain and appreciation for the care taken of the Indian community during COVID-19 were well received.
Economic Relation
As per Ministry of Commerce; bilateral trade stood at $762.01 million in 2016-17. Total bilateral trade stands at USD 1282.96 million in 2018-19 and USD 753.60 million in 2019-20 (April-Dec).
India’s total capital investment into Bahrain between January 2003 and March 2018 has been estimated at approximately USD 1.69 billion.
Financial services have the highest investment value (40% of total projects), followed by the real estate and hospitality sector.
Relative prosperity and higher standards of living in Bahrain boosted global imports of goods and services , including from India.
Bahrain Government’s policy of industrial diversification also played an important role in enhancing economic cooperation between India and Bahrain.
Bahrain serves as the gateway to the GCC market because of its location.
Bahrain-lndia Joint Business Council set up in 1994 helps in regular interaction between the businesses of both sides.
In 2012, India and Bahrain signed Tax Information Exchange agreement to promote economic cooperation and joint investment between the two countries.
India’s main items of exports to Bahrain are mineral fuels, mineral oils, inorganic chemicals, organic or inorganic compounds of precious metals of rare earth, Elam/radii/isotopes, cereals, nuts, fruits, articles of apparel and clothing accessories etc., while main items of import from Bahrain are crude oils, mineral fuels, their bituminous substance, distillation, aluminum, fertilizers, ores/slags/ ashes of aluminum, iron and copper, pulp, salt, printed books, newspapers etc.
Diaspora
The Indian expatriate community (nearly 3.5 Lakhs) enjoys great goodwill from the Bahraini authorities and the employers alike. Indians are preferred over other expatriates from the subcontinent.
The main reasons for this include the trust factor, strong work ethics and the “apolitical” orientation of Indian expatriates. There is also an area called “Little India” in Bahraini Capital.
Bahrain launched ‘Little India in Bahrain’ project in November 2015 to acknowledge and mark the contribution of Indian community to the history and progress of Bahrain.
Cultural Relations
In 2019, India launched a USD 4.2 million redevelopment project of the Sri Krishna temple in the Bahraini capital, Manama.
The 200-year-old temple stands as a testimony for the enduring India-Bahrain friendship.
India has traditionally enjoyed a very strong trade relationship with Bahrain. Indian firms have long used the island Kingdom as a gateway to western markets.
Security and Counter-Terrorism
Strategic position of Bahrain in Persian Gulf makes it a vital partner for India’s energy and maritime security.
India and Bahrain have denounced terrorism, calling it a hazard to all countries and communities.
India and Bahrain have also agreed to reinforce cooperation on exchange of information on terrorism-related investigation and organized crime probe.
International Solar Alliance (ISA)
Bahrain joined ISA as its86th Member on March 2022 as it deposited the Instrument of Accession on the sidelines of the 5th Foreign Office of Consultations held in New Delhi on 28 March 2022.
Bilateral Agreements/Memorandums of Understanding (MoUs)
Extradition Treaty (January 2004)
MoU on cooperation in the field of Information and Communication Technology (May 2012)
MoU on the establishment of a Joint High Commission (February 2014)
MOU on Water Resources Development and Management (February 2015)
Agreement on cooperation in combating international terrorism, transnational organised crime and trafficking in illicit drugs, narcotics and psychotropic substances and precursors chemicals (December 2015)
MoU for cooperation in the fields of Renewable Energy and Healthcare and Agreement on Exemption from Short Stay Visa for Holders of Diplomatic and Special/Official Passport (July 2018)
MoU on cooperation in the exploration and uses of Outer Space for Peaceful Purposes (March 2019)
Significance of Bahrain to India
Bahrain is one of the members of Gulf Cooperation Council (GCC), which makes it important in protecting India’s interest especially on Kashmir issue.
India needs Bahrain support on its stake for permanent seat at UNSC.
Apart from supply of crude oil to India, Bahrain is also an export destination of Indian goods and services. The country is a gateway to increase trade with GCC countries.
Indian Diaspora in the country and remittances flowing to India are areas which makes Bahrain vital for India.
‘Look West’ policy is a major signal of intent, and we can expect trade and diplomatic ties between the GCC and India to deepen, and the vast Indian diaspora in the region serves as a channel for increasing trade flows. Bahrain will be at the centre of that and as the GCC opens again it is likely that this will generate tens of millions more dollars.”
Sectors like healthcare are seeing increased activity from Indian firms. The GCC’s proximity to the subcontinent, its world-class logistics infrastructure, and the fact it is home to some of the largest logistics operators makes it an easy win for Indian exporters.
Way Forward
The Double Taxation Avoidance agreement is something Bahrain would like to see happen with India and India would like to see an MoU on defence cooperation with Bahrain.
Bahrain is uniquely located at the heart of the Gulf , which makes Bahrain the perfect hub to access the fast growing Gulf, Middle East and North Africa (MENA) markets for Indian businesses. The relationship, hence, becomes important not only for aspiring India but also for Bahrain which needs market to diversify its trade portfolio.
