Why Middle East volatility presents an enhanced risk for South Asia

When the late Japanese prime minister Shinzo Abe gave his landmark speech in the Indian parliament in August 2007 referring to the “confluence of the two seas”, he gave birth to the concept of the Indo-Pacific as a strategic space connecting East and South Asia. But the latest conflict in the Middle East illustrates how South Asia’s interconnectedness increasingly lies to its west.Some of these connections are deeply rooted in history: South Asia is home to the world’s largest Muslim population and the Middle East is the birthplace of Islam. Other connections are more recent, such as South Asia’s heavy dependence on energy imports and remittances from the Gulf.About 10 million Indians live and work in the region, accounting for close to 40 per cent of the country’s remittance inflows. For other South Asian countries, this interdependency is even starker. As much as half of Nepal’s remittances come from the Middle East, which is significant when over a quarter of the country’s gross domestic product comes from remittances.The dependency is even more notable in the energy space. All South Asian countries are heavily dependent on commodities transiting the Strait of Hormuz. For India, that’s over 80 per cent of its liquefied petroleum gas (LPG) imports, 55 per cent of its liquefied natural gas (LNG) imports, half of its oil imports and almost a quarter of its fertiliser imports before the conflict started.These economic and cultural connections are being supplemented by a broader strategic and security interconnectedness. This is reflected in Pakistan’s strategic mutual defence agreement with Saudi Arabia last year and membership of the US-led “Board of Peace” earlier this year.The US sinking of an Iranian frigate, the IRIS Dena, in the Indian Ocean soon after the vessel had taken part in an international fleet review hosted by India illustrates how the conflict in the Middle East has spilled into South Asia. The recent attempted Iranian missile strikes on the UK-US military base on Diego Garcia in the Indian Ocean have reaffirmed this point.