In an article two years ago, I wrote that the proximity of the Hindu right with the extremist government in Tel Aviv, with an implacable desire to attack Iran, would place India’s foreign policy in serious difficulties as it would have to choose between an ideological commitment to the greater Israel project and its national self-interest for peace in the Gulf.

That time has now come and India has been reduced to the status of a bystander without any leverage. This is particularly embarrassing for the Indian government when its arch opponent, Pakistan, appears to be playing an important role in various mediation attempts. The strategy of seeking to isolate Pakistan as a terrorist state particularly after Operation Sindoor appears to have backfired sensationally. These events also have to be seen in the backdrop of our relationship with the Gulf Cooperation Council (GCC).

There has always been a dissonance between Saudi Arabia, the big brother, and smaller GCC states, particularly, the UAE. In any regional arrangement, there is concern that the largest state would seek to exercise the most influence. To some extent, the smaller Arab states looked to the US to guarantee their survival. In fact, the slow and steady increase in Israel’s influence in the Gulf has been attributed to its role as an interlocutor between these states and the US and the legal fact that they are nominally allies as they form part of the area where the United States Central Command (CENTCOM) operates.

In this regard, the US policy has been directed at buttressing the position of Israel in West Asia. Sensing tantalising financial opportunities, US President Donald Trump launched the Abraham accords in his first term, which aimed to create a new pro-Israel alliance amongst the Gulf monarchies with Morocco thrown in. The most eager member of this alliance was the UAE. The Abraham process was ultimately aimed at directing Arab sentiments away from the Palestinian cause and towards economic integration with Israel and the US.

This political trajectory chimed well with the new generation of Gulf leaders such as Mohammed bin Salman (MBS) and the ruler of Abu Dhabi, Mohammed bin Zayed (MBZ). The Saudis were also interested in diversifying their economy – from petrochemicals to new areas such as tourism, finance and data centres – but signing an accord with Israel was a step too far. Nevertheless, the immediate impact of this US-led process was a nascent rivalry between Riyadh and the UAE.

While Israel saw financial benefits in this new arrangement whereby it could market its surveillance and military technology and expertise, under Netanyahu all this was incidental to his principal goal of establishing Israel as the regional hegemon and degrading Iran and its proxies. After the Hamas attack of October 7, 2023, Israel went about decimating Gaza. The only opposition to its genocidal policies came from Iran and its proxies Hezbollah in Lebanon and the Houthis in Yemen. An Israeli war against Iran was an inevitability.

The Western media have largely concerned themselves with the military success of the US and Israel in pounding Iran from the air and by way of missiles from US bases in the Gulf. Undoubtedly, much damage has been inflicted upon Iran, but not as much as is claimed. What is now coming out has been the tangible damage the Iranians have inflicted on over a dozen US bases and their troops in the Gulf. This includes damage to not just buildings but to radar, missile systems, and in some cases, hugely expensive aircraft which the Iranians have been able to reduce to burnt and twisted metal.

Similarly, there has been a tit-for-tat policy where US-Israeli coalition attacks on, say, a refining facility, has led the Iranians to exact revenge on refining facilities in the Gulf. This policy has even extended to desalinisation plants: when the US knocked out an Iranian one, the Iranians attacked a facility in Bahrain. This is a serious matter for Israel and the Gulf states as they depend on water from desalinisation plants to a substantial degree. This is not the case in Iran where only 2% of potable water is generated in this way.

It is for this reason that the more sensible Gulf States did not encourage Trump to initiate this catastrophe. They were aware that Iran would target them and it would be legally entitled to do so because these countries are home to US bases and vital logistical hubs for the US-Israeli war effort.

Now the situation has deteriorated considerably as the Gulf states, while criticising Iranian attacks, privately acknowledge that they have been placed in an invidious position by the US and Israeli actions in instigating this war of choice. Both Qatar and Saudi Arabia have said they have no desire to allow bases located on their territory for hostile actions against Iran.

Another factor which has influenced these Gulf states has been the manner in which the US would prioritise Israel’s defence over theirs in the replacement of interceptor missiles, stocks of which have been running low. The entirely reasonable question they ask is why their considerations were not taken into account when Operation Epic Fury was conceived.

Perhaps it may not take a genius to figure that the real purpose of these highly equipped bases was not so much to defend the Gulf states, but to provide a powerful external defence system for Israel at the expense of those states, as well as locations to monitor Iran.

The Gulf states have suffered huge damage in terms of loss of oil and gas revenues, damage to petrochemical facilities which could take years to repair and in the case of Dubai and Qatar, loss of tourism and flight of capital.

This anger will have its consequences for the US economy in both the short and long term. In the short term, the Gulf monarchies will require access to funds to keep their populations quiescent and to meet their financial obligations. These countries have huge investments in the US, amounting to almost 5% of all foreign capital on a per capita basis. These investments are routed through 11 sovereign wealth funds which have invested over $2 trillion USD, as well as investments in US stocks and bonds, hedge funds and infrastructure.

So, in the short term we can see these governments withdrawing monies from US markets at a time when US government borrowings are at an all-time high and the response to treasury auctions have been disappointing. In the long term, these currency movements presage the potential end of the petrodollar.

The obvious question is that post the Iran war, who is going to protect the Gulf monarchies? The US is unlikely to fund the renewal of its bases and most likely the Gulf states would be reluctant to allow them to. They are certainly not going to pay for them after the debacle of this war. This leaves a vacuum.

The idea of an Indian alliance with Israel and the UAE, which some on the Indian right have projected, is particularly delusional. Any association with Israel is going to be a red flag to the Arab street. The UAE has a very small local population but they have to live with their neighbours and Abu Dhabi has to assure the other members of the Emirates that it is not leading the UAE to ruin. We have also to reckon with the possibility of a Saudi-Pakistani alliance as well as the future participation of Russia and China as guarantors of peace.

These realities are lost on the commentators on the right who have perversely framed this as a dispute between the Gulf states and Iran, principally our biggest trading partner. Seen through this lens, obviously India’s financial interests align with the Gulf states as they provide employment to many Indians and fuel the remittance economy. We also have a vested interest in keeping the Strait of Hormuz free to allow safe passage of oil, gas, fertilisers, helium and other commodities. But this is a false framing of the issues as it seeks to reduce the role of Israel in the conflict.

Israel has demonstrated over the years an insatiable desire to destabilise the region to promote its hegemony. It has done so in Iraq, Syria, Libya and Lebanon. It is least concerned about the consequences of its actions, which in this case, would possibly drive the entire world economy into recession as well as lead to food shortages on a massive scale.

The fact that the Israel has sought to sabotage any peace agreement with Iran over the last few weeks and was earlier instrumental in influencing Trump to tear up the Joint Comprehensive Plan of Action – otherwise known as the Iran nuclear deal – only supports the view that Israel is the big spoiler and wants the destruction of Iran as a state.

While some may argue that India’s interests lie with the UAE, we have to understand that the GCC is no longer an entity which is unified in a meaningful sense. There are growing fissures between the Saudis and Qatar on the one hand and the UAE and Bahrain on the other. It is relevant that over 2.7 million Indian workers are based in the Kingdom, less than in the UAE but still significant. If the situation continues, it is unclear whether the UAE will remain unified as the ruler of Abu Dhabi seems to be far too close to the Zionist agenda of permanent war, something which is proving unpalatable to Dubai, whose economic model is at odds with an excess of militarism and adventurism.

Javed Gaya is a Bombay high court lawyer who is currently writing a book on the historical, geographical and political impact of Partition on India and the wider sub-continent, particularly with reference to the Indian Muslims and other minorities.