Looking West With I2U2

Tanvi Kaur

Popularly known as the ‘Western QUAD’, the first I2U2 Summit took place on 14 July 2022, with heads of the state of India, Israel, United Arab Emirates (UAE), and the United State of America (USA) as its participants. Conceived in October 2021, the foreign ministers of the respective countries formed the grouping, known then as the ‘International Forum for Economic Cooperation’.

Formed primarily to strengthen economic relations, the grouping seeks to establish convergence in areas of health, food and water security, energy, environment, trade, investment and infrastructure. The mini-lateral framework seeks to evolve from government-to-government interactions to business-to-business and people-to-people engagements.

Unlike multiple security and economic alliances (QUAD, BIMSTEC, SAARC, SCO) in other parts of Asia, I2U2 has emerged as one of the first regional groupings for India in West Asia. It also serves to restore American presence in the region, in collaboration with its trusted and reliable ally – India. Among the many firsts, I2U2 boasts the inclusion of Israel and the UAE. Both the nations share a history of turmoil and conflict. However, in 2020 with the signing of the Abraham Accords and the Negev Forum, relations were normalized between Israel, UAE, Sudan, Morocco, and Bahrain. The USA and India have always shared good bilateral relations with their Middle Eastern/ West Asian I2U2 counterparts.

The emerging alignment also aims to manage various political and economic risks including high inflation, increasing food and fuel prices, and post-pandemic market fluctuations.

Functioning

In their joint statement, the countries stressed on ensuring food security and prioritizing clean energy production. The Summit also focused on encouraging start-up business linkages and private capital investments across the member countries in tackling the above-highlighted issues. This shall provide a boost to entrepreneurial innovations and create a start-up-oriented investment framework.

As the first project of the summit, a hybrid renewable energy project amounting to 300 MW (megawatts) of solar and wind capacity, with a storage facility, is expected to be set up in Gujarat. For the same, the US Trade and Development Agency (USTDA) will be funding the initial feasibility study of USD 30 million. This shall further India’s goal of reduction in carbon dependency as per the Paris Agreement of 2015.

In addition to this, the UAE will be investing USD 2 billion for establishing an integrated food corridor in Gujarat and Madhya Pradesh. This is to ensure food security for UAE in exchange for fulfilling the energy needs of India. This move is initiated by the Indian Strategic Petroleum Reserves Ltd. (subsidiary of Oil Industry Development Board) located in Padur, Karnataka, in partnership with the Abu Dhabi National Oil Company. The US and Israel shall make their contributions in lending technical expertise and science-based solutions to guarantee the sustainability of the project, which shall eventually pave the way for food security in South Asia and West Asia.

Strategic Importance of the Grouping

The Summit aims at encouraging joint investments in the mutually agreed spheres of food security, water, energy, environment, health, space, infrastructure, transportation, and trade. The grouping aspires to increase opportunities for the private sector and businesses of the member countries to interact and mobilize capital, invest in infrastructure, help develop clean energy and green technology, as well as contribute to public health.

Of the member countries, each of them outshines as a ‘technology’ hub in their own stride. India could offer its land, labour and massive consumer market to the group-based projects; whereas the other members could pitch in with their technological expertise and financial investments.

Primarily formed to maximize the economic benefits arising from the grouping, it also offers unexplored geopolitical and geostrategic potentialities to the participants. Firstly, it sets a precedent for other West Asian nations to engage with Israel, as well as for other countries to view the possibility of any grouping involving the Arab nations and its Jewish neighbour. I2U2 provides Israel with a chance to be a part of a regional framework, first of its kind. With renewable energy gradually replacing the more traditional sources of energy – oil, gas and coal, this grouping also provides a platform for UAE to diversify its economy as well as ensure food security.

Secondly, it strengthens the relations between India and the USA, which have been engaging lately in the Indo-Pacific region. It also provides both the countries an avenue to enhance their strategic ties in West Asia, as well as help in securing their energy requirements, in light of the ongoing Russia-Ukraine war. Moreover, there are speculations that through the grouping, the USA aims to contain Chinese and Russian expansion in the Middle East, especially in the economic sphere.

Indian Interests in the Group

The grouping comes at a monumental time for India as its strategic and diplomatic relations with I2U2 nations have been on an upward trend in recent years. India has had good relations at the bilateral level with the USA, the UAE and Israel. The grouping elevates these relations to a regional level. It, largely, complements India’s ambition to play a definitive leadership role on the global stage. However, India will have to manoeuvre its relations with Iran against the backdrop of the Summit, which primarily consists of its political opponents.

The renewable energy project is of critical importance to India, as it is the first of its type in terms of technology. It shall help further the efforts in achieving net zero emissions by 2070 as well as increase India’s renewable energy capacity from 157GW (gigawatts) to 500GW by 2030. This is, also, an effort to expand energy storage technology and allow for better decentralization of key technologies’ supply chains – a must in a post-pandemic world that is riddled with disrupted supply chain networks.

With the food corridor project between the UAE and India, Dubai-based investors such as Emaar Group is set to invest USD 5 billion in mega food parks as well as USD 2 billion in contract farming and sourcing of agro-commodities. A project of this kind has become imperative in times of global food crisis, especially owing to the ongoing Russia-Ukraine war.

UAE already holds the position of India’s third largest trading partner attributing to USD 59 billion worth of bilateral trade. Both the countries signed the Comprehensive Economic Partnership Agreement (CEPA), aiming to increase the total value of bilateral goods by over USD 100 billion, with trade in services rising by over USD 15 million in a five years timespan. Through this project, UAE has secured food reserves in India, and in the process benefitting both countries.

India and Israel are in the process of concluding a free trade agreement. This is in addition to their bilateral defense relations and existing agriculture and water-technology cooperation which can be potentially institutionalized within the group’s framework. Such agreements/alliances serve to strengthen the regional grouping. The alliance also cements India-America relations, which have already been forged with their active engagement in the Indo-Pacific.

The Summit paves way for India’s untapped diplomatic potential in West Asia as a balancer in the region. It also provides momentum to the Look West Policy, started in 2014, with an aim to further India’s interests in the region by remaining a non-participant in conflicting regional dynamics. It shall help in shedding New Delhi’s traditional outlook of viewing West Asia from the Pakistan lens, bypassing its geopolitical borders. Simultaneously, I2U2 provides a promising platform for attracting multilateral investments and economic cooperation from countries in the region and beyond.

Acknowledgement: The author extends her heartfelt gratitude to Dr Souravie and Riya Shah for reviewing the article and providing valuable feedback.