Israel-Palestine conflict and its implications for India and its diaspora

India’s extended neighbourhood in West Asia has been aflame in the war between Israel and Palestine. After six months of conflict, neither side has fully achieved its objectives and there is no endgame in sight. Perhaps, it seeks a solution and not mere management of the issue.

The prolonged conflict and humanitarian crisis have exposed the region’s fault lines. Iran has been actively engaged, both directly and through its supporters in the region. The Arab “street” has been vocal in its sympathy with the Palestinian cause while Arab governments have been careful not to get sucked into the conflict. The US has been an “ironclad” ally of Israel and the international community has been unable to influence peace-making.

The brutal attack on Israel by Hamas was designed to provoke and the Israeli government responded by declaration of war. The scale of death and destruction in Gaza and the occupation in the West Bank drew global attention and protests rocked western cities. The conflict expanded to Israel's periphery. Israel’s military action has not been able to eliminate the influence of Hamas and had limited success in rescuing hostages. Strangely, the Israeli and Hamas leadership persisted with the conflict, despite opposition from its own citizens. Efforts of Qatari and Egyptian mediators faced heavy weather and resolutions of the United Nations and rulings of the International Court of Justice were not implemented.

The Hamas factor

Hamas, an Islamic militia from the ranks of Muslim Brotherhood (MB), enjoys the support of MB affiliates in Turkey and the Arab world and has strong connections with Iran. 

Although MB is a Sunni movement, it forged a relationship with Shia Iran during the revolution and strengthened it with the ideology of Islamism. They became partners in the fight against Israel to recover the holy mosques in Jerusalem. 

Hamas is wealthy, with financial help from Qatar, budgetary support from the Palestine Authority (as its representative in Gaza) and donations from the West. However, most Palestinians are no longer enchanted by its leadership. Most Arab states are not comfortable with MB ideology; despite pro-Palestine statements, many preferred to remain neutral in the ongoing conflict. 

The recent dialogue between Hamas and Fatah, in Moscow and Beijing, could provide options for a new Palestinian leadership to emerge.

The Iran factor

The recent conflict disturbed the earlier balance of violence by proxy in the mutual distrust between Iran and Israel. For long, Iran-supported Shia militias had struck Israel militarily, while Israel targeted Iranian interests in the region but used covert operations on assets within Iran. The Israeli airstrike on Iranian diplomatic premises in Damascus was audacious in that context.

Thankfully, diplomatic counsel prevailed and while Iran retaliated and Israel counter-retaliated, they were pro forma strikes for domestic audiences that did not escalate the conflict, at least for now. However, both Israel and Iran have now crossed the Rubicon, creating potential for future conflict and with risk of wider magnitude.

Implications for India

Prolonged conflict in India’s extended neighbourhood impacts our engagement with key strategic partners. Our relations are based on energy, food and health security; financial, knowledge and high technology collaboration; and manpower mobility for mutual development and prosperity.

In the short term, although the fundamentals of our economy are strong, macroeconomic stability is vulnerable to oil supply disruption and price spikes caused by war.

The region is a major source of oil and gas, while we export refined hydrocarbon products to several countries, including Israel. The rise in energy prices has increased India’s import bill, current account deficit and adversely affected the rupee. An increase in input prices fuelled inflation and put pressure on the fiscal balance.

The war led to attacks on ships, piracy and hostage taking off the coast of Yemen and western Indian Ocean, disrupting trade and safety of Indian sailors. The Indian Navy launched several operations to rescue ships and sailors. The increase in insurance and shipping costs, longer transit times and uncertainty has had a negative impact on logistics chains and economic integration.

Implementation of the IMEEC, a future-oriented multimodal connectivity between three economic hubs, has slowed down due to the conflict and Israel’s crucial role in the project. However, the rationale for the project remains strong and work is expected to commence once normalcy returns.

The expectation, especially after the restraint exercised by Iran and Israel in the direct attacks against each other, is that the war may not escalate in the medium term. There is anticipation that trade and foreign investments will soon rise to a new normal. The partnership with Israel in high technology and innovation has not been impacted by the war, thus far.

An issue of concern has been the possible impact on the Indian diaspora. The current level of confrontation caused only minor imbalances in the demand for Indian professionals and workers in the Gulf, who number over nine million. An evacuation from Israel was organised in the early days of the conflict. Besides, Indian troops, on UNIFIL duties in south Lebanon, had to move to Beirut. 

Recently, new contracts were concluded with Israel for Indian workers to replace Palestinians. However, travel advisories issued due to the escalation in conflict could hamper immediate mobility and safety concerns remain.

A final settlement

At a strategic level, the stakes are high and expectations are higher. The progress and prosperity of Israel is a beacon for the region. Many Arab states desire closer ties with Israel, but now, they also want
progress on the Palestine issue. As the Arab “street” became more vocal, Arab states sought to rebuild bridges with
the US, while China has emerged as an interested player.  

Amidst the ongoing conflict, there is a crisis of leadership. There is realisation that the issue can no longer be simply managed and that peace and security have to be assured to both sides.

For this, many Palestinians see the need to settle internal differences and many Israelis have noted that military action has neither provided security nor returned hostages; and the overall cost included a loss of goodwill for Israel. The assurance of peace, security and prosperity can only come from a negotiated two-State solution.

(The writer is a former Ambassador and secretary in the Ministry of External Affairs)