Indian Council of World Affairs

Established at the Foreign Ministers’ meet in October, 2021, I2U2 stands for India, Israel, United Arab Emirates (UAE), and the United States (US) quadrilateral partnership. The leaders of the above four member countries met (virtually)[i] for the first time on 14^th July, 2022. Combining complementary strengths and capabilities to fulfill mutual socio-economic interests, the new Quad partners look forward to bolstering cooperation and partnership in the region - as indicated in the inaugural summit.[ii]

The changing dynamic of West Asia has however made the foreign policy sphere rife with speculation on the strategic and geopolitical prospects, and the viability of this newly formed mini-lateral. It is in this light that this issue brief examines the aspects of this newly formed body, and the potential prospects of cooperation that lie ahead. With a brief understanding of the purpose of this new Quad, the paper studies the nature of existent bilateral relationships between members, their individual divergent geopolitical interests, and the factors that bring them together, exploring the road ahead.

The Purpose of I2U2

I2U2 identifies 6 areas of cooperation and investment, namely - water, energy, transportation, space, health, and food security. It intends to mobilise private sector capital and expertise to help modernise infrastructure, develop low carbon development pathways for industries, improve public health, and promote the development of critical emerging and green technologies in the member countries.[iii] The countries deny any military angle to their cooperation with the agenda of the mini-lateral focused on the economic and infrastructural development.[iv]

The Nature of Relationship between the Four Member States

Two federal republics, a Jewish democratic state, and a monarchy – the four I2U2 member countries share comprehensive economic, military, and political bilateral relationship with each other. The US is the largest trading partner for both, India and Israel. India, on the other hand, is the second largest trading partner of UAE (2021) and the third-largest Asian trade partner of Israel (2019). India-UAE Comprehensive Economic Partnership Agreement (CEPA) also entered into force recently (February, 2022). In terms of trade in defence, India was the largest importer of arms in 2017-21 with Israel and the US being its third and fourth largest defence supplier respectively.[v] India is also the largest buyer of Israeli military equipment.[vi] The countries are also co-participants in different military exercises, like, the Blue Flag air combat exercise (Israel), or the Desert Flag exercise (UAE), which saw the participation of both India and the US along with other countries.

Bilaterally, India shares prolific relationships with the three other members; boasting of a ‘Global Strategic Partnership’ with the US, ‘Comprehensive Strategic Partnership’ with the UAE, and 30 years of successful diplomatic relationship with Israel. Indian expatriates today make up roughly 30 per cent of UAE’s total residents – double of the original Emirati ethnic population themselves.[vii] US and Israel also share a Strategic Partnership relationship. US was the third country to establish formal diplomatic relations with UAE post its independence in 1971. The strategic proximity of their relationship is exhibited in the fact that UAE hosts the busiest US air base in the wold for surveillance flights, Al Dhafra.[viii] It also hosts the busiest US Navy port of call, Jebel Ali.[ix] Furthermore, the signing of the Abraham Accords brokered by the US in August, 2020 has led to full normalisation of ties between the Jewish state of Israel and the Arab UAE.

The thriving bilateral relationships however do not mean that the four countries share same ideological and strategic interests. For instance, Iranian rivalry is central to the US and Israeli outlook of West Asia. India and UAE, on the other hand, continue to find ways to engage with Tehran. India’s historical and cultural relationship with Iran, though pressured under Western sanctions, continues to thrive as witnessed during the recent diplomatic exchanges between the two states.[x]^, [xi]  Similarly, the rise of China has had different meanings for the four countries in discussion. While the US eyes the rising Chinese footprints in the region and Indo-Pacific with adversarial sight, India has a tight rope to walk with its current belligerent neighbour. Israel and UAE, on the other hand, have been observed to be benefitting from the rising Chinese economic investments in the region. China and UAE recently upgraded their ties to Comprehensive Strategic Partnership status.[xii] There has also been increased defence and technical cooperation between China and Israel which has caused concerns in Western nations, particularly the US. The Chinese investment in the construction of container terminals in Haifa port (Israel) and Khalifa port (UAE) as part of its flagship Belt and Road Initiative (BRI) further exacerbates the US security concerns in the region.[xiii]

The pending resolution of the Palestinian issue is also a point of divergence in the relationship shared by these four countries. For example, the Arab-Israel rivalry and the two states solution advertised by the UN is known to have shaped the West Asian geopolitics since 1947. India also calls for a peaceful resolution of Israel-Palestine issue.[xiv] In the light of these dynamics, India-Israel bilateral relationship remained mostly restricted to technology, defence and agriculture until recent high level visits post 2014.[xv] Economics, energy, and the emerging geopolitical trends have now paved way for a more realist outlook in the current century as witnessed in the signing of the Abraham accords.

What brings the Four Nations Together?

The creation of I2U2 is seen as one of the key dividends of the Abraham Accords that intends to pave the way for normalisation of Arab-Israel ties.[xvi] Today, Israel has newly established diplomatic relationships with four Arab League countries, namely UAE, Bahrain, Sudan and Morocco. The evolving geopolitical, economic, security and social realities of the region are encouraging new diplomatic dialogues. For example, the Neom Meeting between Saudi Crown Prince and Israel Prime Minister was held in November, 2020.[xvii] With the potential coming together of the West Asian region, the four nations’ foreign ministers’ meeting was held in a hybrid format last year. India, Israel, UAE, and the US, explored possibilities for joint infrastructure projects in transportation, tech, maritime security, economics and trade, as well as for additional joint projects. In this meeting, the Ministers decided to establish a forum for economic cooperation to take forward their maiden dialogue which eventually led to the current format of I2U2. In the event of this converging foreign policy interests of the otherwise socially and regionally diverse countries, it becomes essential to understand what brings these nations together.

The four members of I2U2 seem to be bound by two major interests – the regional geopolitical footprint expansion and the global socio-economic security. For the US, the creation of this alliance serves two purposes, firstly, it negates the “notion” of the US withdrawal from West Asia, and secondly, it strengthens its strategic footprints in the region by fulfilment of the long term American commitment towards Israeli economic, political and strategic integration in the region.[xviii] For Israel and UAE, the two nations bound by economic realism, this alliance can create blueprint for effective West Asian future cooperation.[xix] The founding membership of this Western mini-lateral also reaffirms the leadership role that India holds today in consolidation of the South Asian rimland. I2U2 offers India a platform to more openly engage with Israel and other Arab countries beyond bilateral means to benefit economically, socially and geopolitically in the region.

Speaking of the global socio-economic security interest, the world, as we know today, is witnessing a new set of emerging challenges beyond the conventional threats. If the global growth was at risk (as reported by the UN)[xx], the COVID-19 pandemic, increasing competition for global dominance, and the current Russia-Ukraine war have made the economic and social costs of dwindling growth more visible. Supply chains break-down, trade wars, energy insecurity and geopolitical-economic issues have been observed to pull down the global economic recovery attempts.[xxi] Whereas ecologically, the food insecurity, declining soil productivity, global warming, and climate change threaten the long term survival of the societies itself.[xxii] It is in this light that the convergence of different capabilities becomes important to counter the forces of unsustainability – as depicted in the agenda for I2U2.[xxiii]

What Benefits Lie for the Four Nations?

For the US, the ‘West Quad’ allows for expansion of the geographic scope of its relationship in the region – securing the East Mediterranean Coast to the Persian Gulf axis. This becomes important when viewed in conjunction with the speculated development of the Russia-China-Iran triangle in the region.[xxiv] It will also help the States reinvigorate the partnerships which suffered during the previous presidency of Donald Trump. A stable, connected and cooperative West Asia further ensures the security of the US’ socio-economic interests and investments in the region as its policy focus expands to the Indo-Pacific.[xxv]

I2U2 also presents India with an opportunity to play global leadership role alongside the US while keeping its strategic autonomy and national interests intact. Deepening of ties with the West Asia region as a whole presents holistic diplomatic and infrastructural connectivity channels for India. This can benefit both, the large Indian diaspora in West Asia, as well as India’s own economic and political interests. For example, the realisation of India-Arab-Mediterranean Corridor, as a next step of India – West Asia connectivity, can provide economically viable alternate trade routes connecting the Indian subcontinent to the European Mainland.[xxvi] The prospective completion of this supply chain corridor will not only benefit the people to people connect but will also strengthen India’s trade and energy security.

The newly formed diplomatic ties between Israel and UAE also have the potential to benefit the West Asia region at large. For UAE, it impresses upon the growing prominence of the country in the Gulf region with its cosmopolitan high economic profile. Whereas for Israel, it presents opportunity for initiation, expansion and solidification of formal diplomatic ties with other Arab states. A successful cooperation between Israel and UAE within the American umbrella and Indian support can open doors for realisation of economic relationship between Israel and Saudi Arabia as a next step.

While on paper this new found grouping is said to be entirely focussed on economic and infrastructural development, one cannot completely ignore the security and geopolitical issues which surround the four member states. Different scholars have questioned the viability of this union when it comes to conflicting ideological and national interests; the response to Iranian threat being a case in point.

Convergence in Divergence

As noted by Winston Churchill, “We have no permanent friends, but permanent interests”. The combined fear of weaponisation of Iranian nuclear program is known to bring diverse nations together complemented by American support. While there exists an anti-Iran front, there also coexists a sense of balance in the region when viewed from UAE and Indian perspective. India has been working with and around Western sanctions to maintain the strategic warmth of its historic relationship with Iran.[xxvii] This also becomes important in the light of recent Chinese strategic overtures in the region.

China is overtly known for making its economic inroads into West Asia since the beginning of this century.[xxviii] Although Chinese investments in Israel, UAE, and other Gulf countries have remained economic till now, the surfacing of Iran-China Strategic Partnership Agreement bodes deeper engagement in the region. The growing Chinese economic, and now strategic, heft in the region, bodes a possibility of competition and contestation in the region in the race for polarity. The I2U2 goals would thus benefit by disengaging the forum’s economic and development agendas from the member states’ individual security and strategic interests. The denial of any military angle in the first summit of the grouping hints in this direction.

The Road Ahead

I2U2 offers a unique combination of Israeli innovative technology, US global industrial expertise, Emirati economic resources and Indian market leadership together to present sustainable competitive opportunities that can benefit the global economic order today. In light of current global turmoil like the COVID-19 pandemic fall-outs and the ongoing Russia-Ukraine crisis, the areas of cooperation identified by this grouping namely - water, energy, transportation, space, health, and food security – are both short term requirements and long term imperatives. The burgeoning global population, and the declining planet capacity, in conjunction with potentially destructive multipolarity contestations, can thus use responsible leadership to attain balance in the above domains.

As far as India is concerned, it is no longer content to be passive recipients of outcomes in the West Asian region, and it is with this understanding with which Delhi is becoming more proactive about deepening its relationships in the region. Rather than waiting for the ties to take shape organically or mere reciprocation to events as they occur, I2U2 presents India with a much suited leadership role for shaping the global socio-economic security structure. However, it remains equally essential for the member states to not lose out on the above global goals for individual geopolitical interests. A stable, less volatile, and cooperative West Asia holds hope for the otherwise restive world today.

*****

* Ishani Agnihotri, Research Intern, Indian Council of World Affairs, Sapru House, New Delhi.
Disclaimer: The views are of the author. 

Endnotes

[i] Omri Nahmias, (2022, July 14), Leaders of Israel, US, India and the UAE meet for the inaugural 'I2U2' virtual summit, Retrieved from The Jerusalem Post: https://www.jpost.com/breaking-news/article-712091, Accessed on July 18, 2022

[ii] The First Post, (2022, July 15).  Understanding the new I2U2 bloc and what exactly was agreed at the first summit attended by PM Modi, Retrieved from The Firstpost:  https://www.firstpost.com/india/understanding-the-new-i2u2-bloc-and-what-exactly-was-agreed-at-the-first-summit-attended-by-pm-modi-10913811.html, Accessed on July 18, 2022

[iii] Press Release, (2022, July 12), First I2U2 (India-Israel-UAE-USA) Leaders’ Virtual Summit, Retrieved from MEA:https://www.mea.gov.in/press-releases.htm?dtl/35489/First+I2U2+IndiaIsraelUAEUSA+Leaders+Virtual+Summit, Accessed on July 18, 2022

[iv] Kashif Anwar, (2022, July 25), The I2U2 and India’s role in Middle East’s QUAD, Retrieved from The Financial Express: https://www.financialexpress.com/defence/the-i2u2-and-indias-role-in-middle-easts-quad/2605153/ , Accessed on August 10, 2022

[v] Amit Cowshish, (2022, March 14), India emerges as the largest importer of arms in 2017-21, Retrieved from The Financial Express: https://www.financialexpress.com/defence/india-emerges-as-the-largest-importer-of-arms-in-2017-21/2460365/, Accessed on July 18, 2022

[vi] Ibid

[vii] Indian Community in UAE, Retrieved from the Embassy of India in UAE: https://www.indembassyuae.gov.in/indian-com-in-uae.php, Accessed on July 18, 2022

[viii] Matthew Wallin, (2018, June), US Military Bases and Facilities in the Middle East, Retrieved from AmericanSecurityProject.org: https://www.americansecurityproject.org/wp-content/uploads/2018/06/Ref-0213-US-Military-Bases-and-Facilities-Middle-East.pdf, Accessed on July 22, 2022

[ix] Ibid

[x] Media Center, (2022, June 08), Visit of H. E. Dr. Hossein Amir Abdollahian, Foreign Minister of the Islamic Republic of Iran to India (June 08-10, 2022), Retrieved from MEA: https://mea.gov.in/press-releases.htm?dtl/35402/Visit+of++H+E+Dr+Hossein+Amir+Abdollahian+Foreign+Minister+of+the+Islamic+Republic+of+Iran+to+India+June+0810+2022, Accessed on July 18, 2022

[xi] The Hindu, (2020, September 05), Rajnath Singh to meet Iranian Defence Minister, Retrieved from The Hindu: https://www.thehindu.com/news/national/rajnath-singh-to-meet-iranian-defence-minister/article32530014.ece , Accessed on July 18, 2022

[xii] China, UAE agree to lift ties to comprehensive strategic partnership, Retrieved from Ministry of Foreign Affairs of the PRC: https://www.mfa.gov.cn/ce/como/eng/news/t1579379.htm, Accessed on July 18, 2022

[xiii] EurAsian Times Desk, (2021, October 7), Chinese Investments In Israel’s Haifa Port ‘Rattle’ The US; Washington Raises Espionage Concerns, Retrieved from EurAsian Times: https://eurasiantimes.com/chinese-investments-in-israels-haifa-port-rattle-the-US-washington-raises-espionage-concerns/ , Accessed on July 22, 2022

[xiv] ANI, (2022, January 20), India at UN reiterates for peaceful resolution of Israel-Palestine issue, supports two-state solution, Retrieved from https://www.aninews.in/news/world/US/india-at-un-reiterates-for-peaceful-resolution-of-israel-palestine-issue-supports-two-state-solution20220120011443/, Accessed on July 22, 2022

[xv] India, (2019, June), India-Israel Bilateral Relations, Retrieved from MEA: https://www.mea.gov.in/Portal/ForeignRelation/India-Israel_relations.pdf, Accessed on July 22, 2022

[xvi] Dipanjan Roy Chaudhury, (2022, June 15), Maiden I2U2 meet in July, Prime Minister Narendra Modi to attend virtually, Retrieved from The Economic Times: https://economictimes.indiatimes.com/news/india/maiden-i2u2-meet-in-july-prime-minister-narendra-modi-to-attend-virtually/articleshow/92213821.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, Accessed on July 14, 2022

[xvii] Al Jazeera, (2020, November 23), Netanyahu met MBS, Pompeo in Saudi Arabia: Israeli media, Retrieved from Al Jazeera: https://www.aljazeera.com/news/2020/11/23/netanyahu-met-with-mbs-pompeo-in-saudi-arabia-israeli-sources, Accessed on August 4, 2022

[xviii] Michael Kugelman, (2022, July 14), Another Quad Rises, Retrieved from Foreignpolicy.com: https://foreignpolicy.com/2022/07/14/i2u2-quad-india-israel-uae-US-south-asia/, Accessed on July 18, 2022

[xix] Ibid

[xx] Elliott Harris, (2019, February 06), Risks to global growth, Retrieved from The Hindu: https://www.thehindu.com/opinion/op-ed/risks-to-global-growth/article26186252.ece?homepage=true , Accessed on July 22, 2022

[xxi] Press Release, (2022, June 7), Stagflation Risk Rises Amid Sharp Slowdown In Growth, Retrieved from the World Bank: https://www.worldbank.org/en/news/press-release/2022/06/07/stagflation-risk-rises-amid-sharp-slowdown-in-growth-energy-markets, Accessed on July 22, 2022

[xxii] IPCC 6^th Assessment Report, 2022, Climate Change 2022: Impacts, Adaptation and Vulnerability, Retrieved from IPCC: https://www.ipcc.ch/report/ar6/wg2/, Accessed on July 22, 2022

[xxiii] Press Release, (2022, July 12), First I2U2 (India-Israel-UAE-USA) Leaders’ Virtual Summit, Retrieved from MEA:https://www.mea.gov.in/press-releases.htm?dtl/35489/First+I2U2+IndiaIsraelUAEUSA+Leaders+Virtual+Summit, Accessed on July 18, 2022

[xxiv] Mercy A. Kuo, (2022, July 07), The China-Iran-Russia Triangle: Alternative World Order?, Retrieved from The Diplomat: https://thediplomat.com/2022/07/the-china-iran-russia-triangle-alternative-world-order/ , Accessed on July 22, 2022

[xxv] Michael Kugelman, (2022, July 14), Another Quad Rises, Retrieved from Foreignpolicy.com: https://foreignpolicy.com/2022/07/14/i2u2-quad-india-israel-uae-US-south-asia/, Accessed on July 18, 2022

[xxvi] Michael Tanchum, (2021, August), India’s Arab-Mediterranean Corridor: A Paradigm Shift in Strategic Connectivity to Europe, Retrieved from South Asia Scan, Issue No 14, iSAS, NUS: https://www.isas.nus.edu.sg/wp-content/uploads/2021/08/South-Asia-Scan-Aug-2021-V4.pdf, Accessed on July 18, 2022

[xxvii] Rajeev Agarwal, (2022, June 11), India-Iran ties are ripe for a reset, Retrieved from The Diplomat: https://thediplomat.com/2022/06/india-iran-ties-are-ripe-for-a-reset/,  Accessed on July 22, 2022

[xxviii] Zvi Mazel, (2022, April 21), China’s growing economic impact on the Middle East, Retrieved from GIS Reports: https://www.gisreportsonline.com/r/china-middle-east/, Accessed on July 22, 2022