The Gulf region with its geo-strategic location is important to India from the economic and security viewpoints. Centuries-old interaction between India and the region and the region's centrality in the Islamic world makes the Gulf also, politically important. Gulf countries together account for 15 per cent of India's total foreign trade. Nearly two-thirds of the country's energy requirements are met from this region. An estimated 2.5 million Indian live in the area and their annual remittances to India are of the order of a few hundred crores of rupees.

The traditionally friendly relations between India and Bahrain were marked by exchange of visits and close interaction between the private sectors of the two countries. Minister of State for Commerce visited Bahrain on 2 and 3 November 1996 to participate in the 13th International Congress of Non-Resident Indians. A delegation from the Indian Merchants Chamber (IMC) visited Bahrain and signed a Memorandum of Understanding (MOU) on Cooperation with the Bahrain Chambers of Com-merce and Industry. The first meeting of the Indo-Bahrain joint Business Council was held in Bahrain on 8 and 9 October 1996. The Bahrain Marketing and Promotion Board (BMPB) opened an office in Mumbai to promote trade and investment between the two countries.

Efforts were made to strengthen the relations with Iraq while conforming to the requirements under the UN sanctions. India continues to be concerned at the economic hardships faced by the Iraqi people due to the UN sanctions and has gifted sugar, baby food, wheat and rice. India favors a phased withdrawal of the UN sanctions in tandem with the Iraqi compliance of the UN Security Council requirements. The Minister of External Affairs called upon the US to refrain from further attacks and respect Iraq's sovereignty and territorial integrity. At the World Food Summit in Rome in November 1996, a meeting took place between Iraqi vice-president and the Prime Minister. Expert teams from the oil industry and the railways have been in touch with their Iraqi counterparts for future cooperation after the UN sanctions end. As regards the deferred payments due from Iraq, there has been no progress due to the UN sanctions.

Relations with Kuwait were marked by warmth and goodwill. A number of business delegations were exchanged between the two countries. Kuwait has evinced interest in investment opportunities in India. The strength of the Indian community in Kuwait estimated at 2,40,000 is exceeding the number prior to August 1990.

The Government continued to follow the compensation claims of Indian nationals and Indian companies who sustained losses during the Gulf crisis following Iraq's invasion and occupation of Kuwait in August 1990.

There was a significant increase in high level exchanges of visits with Oman contributing to further expansion and diversification of bilateral cooperation in several areas. The President's State visit to Oman from 3-6 October 1996 was a landmark event. During the visit, a Memorandum of Understanding (MOU) on Combating Crime, an MOU on Cooperation in Agriculture and Allied Sectors and an Agreement on Cooperation in Science and Technology were signed. Other significant visits from Oman were by the Minister of State for Foreign Affairs (July 1996), Minister of Commerce and Industry and Chairman of the Board of Oman Oil Company (10-12 August 1996). Three Indian ships, INS Godavari, INS Suvama and INS Shankush (submarine) paid goodwill visits to Omani ports in November 1996. The first meeting of Indo-Oman joint Business Council was held in Muscat on 5 October 1996.

India's friendly relations with Qatar remained on an even keel. The first ever flight by Indian Airlines between Calicut and Doha was inaugurated on 6 March 1996. India participated in the defense exhibition in Milipol Qatar 1996 in Doha from 9-12 November 1996. Two Indian naval ship INS Godavari and INS Suvarna paid goodwill visit to Doha from 16-19 November 1996.

The traditional ties with Saudi Arabia were further strengthened with exchange of significant visits. Important visitors from Saudi Arabia were the Petroleum and Mineral Resources Minister (3-5 December 1996), Haj Minister (25 and 26 December 1996), Deputy Minister of Oil (3-5 December 1996) and the Assistant Minister for Industrial Affairs (May 1996). The Haj Minister delivered a written message from King Fahd to the Prime Minister. Joint Commander of the Allied Forces in the Operation Desert Storm visited India from 7-13 October 1996. He delivered a lecture at the National Defense College, New Delhi. A six-member parliamentary delegation led by Lok Sabha Speaker visited Saudi Arabia at the invitation of the Chairman of the Majlis Asshoura. The visit marked the first-ever contact between parliamentarians of the two countries. The Ministry of External Affairs facilitated arrangements for the Haj pilgrimage by 56,000 pilgrims.

Bilateral relations between India and United Arab Emirates (UAE) continued to be strengthened and diversified. Chief of Staff of UAE Armed Forces accompanied by a large delegation of UAE military experts and officers paid an official visit to India from 5-8 March 1996. The visit was aimed at strengthening the bilateral cooperation between the two countries in general and defense cooperation in particular. Minister of Labor visited UAE as a Special Representative of the President of India from 30 November-3 December 1996 to participate in the 25th anniversary of accession of President Sheik Bayed as the Ruler of the Emirate of Abu Dhabi. The Indian Trade Promotion Organization held an exclusive Indian exhibition "EXPO India" in Dub from 7-11 December 1996.

Relations with Yemen were marked by a growing awareness in both countries of the potential for mutually beneficial economic cooperation. The second meeting of the India-Yemen joint Committee held in New Delhi on 6 and 7 December 1996 agreed to further extend the cooperation to sectors like hydrocarbon, civil aviation, construc-tion, telecommunications, water resource management, power generation, agriculture, small scale industry, transfer of technology and human resource development. The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Federation of Yemen Chambers of Commerce and Industry signed an Agreement for establishing a joint Business Council to stimulate and develop business contacts.

Bilateral relations with Iran retained their positive trend of increased under-standing and cooperation. Vice-president Shri K R Narayanan paid an official visit to Iran from 22-27 October 1996. Minister of Agriculture visited Tehran to attend a regional conference on Afghanistan called by Iran on 29 and 30 October 1996. The invitation to India to attend the conference was amidst strong Pakistani protest and the decision to refrain from attending the conference, which in turn signified closer understanding between India and Iran on a crucial regional issue. Governor of Madhya Pradesh and Uttar Pradesh visited Iran as Special Envoy of the Prime Minister to attend the inauguration ceremony of Iran-Turkmenistan railway line. From the Iranian side, Speaker of Majlis Nateq Nouri paid an official visit to India from 25-29 November 1996. During the visit, an Agreement on the formation of a joint Business Council (JBC) was signed between the FICCI and Iranian Chamber of Commerce. Iranian Minister of Foreign Affairs Dr. Ali Akbar Velayati and Deputy Foreign Minister also visited India for bilateral consultations on various issues. The Minister of External Affairs visited Tehran to co-chair the Ninth Session of the India-Iran joint Commission held on 21 and 22 February 1997. A supplementary Memorandum of Understanding (MOU) on the Qeshm Island Fertilizer Project under discussion between the two countries was signed on 26 November 1996.