Observer Research Foundation

The Trans-Regional Benefits of I2U2 for the US

Research Fellow
President Joe Biden attends a meeting of the I2U2 group with Israeli Prime Minister Yair Lapid at the Waldorf Astoria Jerusalem, in Jerusalem, on July 14, 2022. (Adam Schultz via Flickr)

The West Asia Quad, also known as I2U2, was formed in October 2021 and has demonstrated tremendous geopolitical and geoeconomic promise. Formed as a ministerial-level dialogue, the minilateral held its first leaders’ level summit within nine months of establishment. (The Indo-Pacific Quad, for instance, took more than a decade to take its current shape.)

From Washington’s perspective, I2U2 is a beneficial initiative, with strategic value in integrating West Asia and South Asia. Since the end of the Second World War, the US has considered the larger West Asia to be critical to American grand strategy, primarily for access to energy resources. The US has also worked hard to try and resolve the Arab–Israel dispute over Palestine.

Over the last decade, successive US administrations have tried to diminish overt US presence in West Asia. The consequent vacuum created by American retrenchment has resulted in the entry of local and regional actors whose aims are antithetical to American interests. Russia’s return to the region and its role in the Syrian conflict, as well as its close relations with Iran, are well known. China too, has deepened its economic and strategic relationship with key countries, i.e., Saudi Arabia, the UAE, and Israel.

A grouping like I2U2 helps the US remain significantly engaged in West Asia without committing too much resources. It could further help contain expanding Chinese and Russian influence in this region and reassure America’s West Asian allies of its security commitments. Above all, it encourages closer bonds between three middle powers friendly to the US.

Moving from a ‘US-led, partnerenabled’ strategy to a ‘partnerled, US-enabled’ strategy requires building what the 2022 National Security Strategy (NSS) report calls “a latticework of strong, resilient, and mutually reinforcing relationships that prove democracies can deliver for their people and the world.”1 If speeches, symbolism, summits, and deliverables are the criteria for measuring success, then the I2U2 grouping ranks high on the list of recent US foreign policy successes.

The US prefers a West Asia that is closely integrated with itself or with a regional American partner, such as India, over one that is closer to Russia or China. This is evident in the 2022 NSS, which emphasises that the way to “out-compete China and constrain Russia”2 is through reinvigorating America’s “network of alliances and partnerships.”

The Biden administration has made it a priority to provide a counter-example to China through investment, innovation, and technology. The US knows it must outcompete China by supporting global public goods, such as working towards food security, investing in renewable energy, and dealing with the impacts of climate change. The I2U2 grouping is ideally situated to lead by example in these areas.

The grouping brings together shared interests and complementary capabilities. The UAE signed free trade agreements with both Israel and India in May 2022.3 The UAE is one of India’s top trading partners; bilateral trade between the two countries was US$88 billion in 2022.

The joint statement released at the July 2022 virtual summit between President Joe Biden, Prime Minister Yair Lapid, Prime Minister Narendra Modi, and President Sheikh Mohamed bin Zayed Al Nahyan highlighted the key deliverables being sought by each country from the grouping.4 Israel wants reaffirmation of the Abraham Accords and praise for its innovative technology, aiming to make its startup ecosystem available to potential partners and allies. India, for its part, is keen to gain access to advanced technology and increased investment. The UAE’s aim is food security, and it wants to invest in renewable energy, along with access to the large Indian market.

No wonder, then, that the first two projects announced by I2U2 member countries are tied to food security and clean energy. The UAE will invest US$2 billion in India to build integrated food parks “to reduce food waste and spoilage, conserve fresh water, and employ renewable energy sources” using American and Israeli technology.5 The second initiative involves the three countries investing in building a hybrid renewable energy project in India.

The Arab Gulf countries have long sought a solution to food insecurity, and the supply chain crises resulting  from the COVID-19 pandemic and the Ukraine war have only reinforced their desire to source food from proximal regions. As home to the International Renewable Energy Agency (IRENA) and the host of COP28—the UN Climate Change Conference scheduled for December 2023—the UAE is keen to showcase its investment in renewable energy. In addition to investing in renewable energy, the UAE could become India’s preferred strategic oil reserves partner. American efforts to discourage India’s dependence on Russia advance every time India views the Gulf and not Russia as its source for energy supplies.

The US’s Indo-Pacific strategy has involved trying to wean its security partners off economic dependence on China. Like other US allies and partners in East and Southeast Asia, the UAE and Israel maintain close economic relations with China as well as a security partnership with the US. Instead of pressuring the UAE and Israel to reduce Chinese investment in ports and telecommunication infrastructure, Washington appears to be encouraging them to look towards India, which is a close partner of both Tel Aviv and Abu Dhabi.

This is part of what US Treasury Secretary Janet Yellen has described as ‘friend-shoring’—encouraging businesses in the US and friendly countries to invest in other friendly countries.6 For example, in September 2022, Indian company Adani, in collaboration with an Israeli company, won the bid to privatise Israel’s Port of Haifa, which was previously going to be built by a Chinese company.

The goal of outcompeting China necessitates an emphasis on technology, both current and future, and countries such as India, Israel, and the UAE are critical to this. Israel is a leading innovative economy, with one of the highest expenditures as percentage of GDP on research and development (R&D), at 5.44 percent.7 For the US, this stands at 3.45 percent; for the UAE, it is 1.45 percent; while India stands at only 0.66 percent. The I2U2 grouping, however, can “harness the vibrancy” and “entrepreneurial spirit” of these four countries.8

Washington seeks a more integrated West Asia, which is stable and less conflict-prone, “reducing the resource demands the region makes on the United States over the long term.” It is also critical for American and allied interests that no foreign or regional powers “jeopardize freedom of navigation through the Middle East’s waterways” or that any country tries to dominate the region.9

Moreover, Israel and the UAE have an interest in a stable, conflict-free South Asia. Both countries understand India’s security challenges, including those relating to Pakistan and Afghanistan, and are willing to help India. For India, the Middle East holds strategic importance as it hosts the largest Indian diaspora, at around 7 million Indians, as well as being the source of more than 60 percent of the country’s energy imports. Ensuring open sea lines of communication (SLoCs) is as critical for India as it is for the US and its allies and partners.

Israel’s military intelligence expertise and economic and technological prowess partners well with India’s ability to provide workforce and access to a populous market. The UAE’s firm commitment to the Abraham Accords has placed it in a unique position that allows it to influence Israel in protecting Palestinians in Gaza and the West Bank while remaining a steadfast Muslim opponent of radical Islamist extremism.

India, home to the second largest Muslim population in the world and which faces terrorism threats, appreciates Israeli and Emirati support against terrorist outfits. India also has good relations with both Israeli and Palestinian leaders and has long championed a two-state solution like the US.

The US is one of the top defence suppliers to all of these countries, supplying 68 percent of all arms purchased by the UAE and 78 percent by Israel. From zero defence trade in 2008, US military sales to India reached US$22 billion by 2022. Israel is also one of the top three suppliers of defence equipment to India, with 43 percent of Israel’s arms exports currently being sold to India. The more India purchases from Israel, the less it will purchase from Russia—again benefitting America’s strategic and security interests.

To be sure, there are certain divergences in priorities among I2U2 countries: Israel and the UAE view Iran as the key threat, whereas India has historically had good relations with Iran. Meanwhile, India and the US share concerns about China’s growing pre-eminence, but Israel and the UAE do not view China from the same lens. However, these differences will not prevent I2U2 from expanding cooperation in trade, energy, and technology, or even from evolving into a strategic partnership.

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