Coll 17/10(1) 'Internal: political situation; relations with HMG' [‎346r] (696/982)

THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOVERNMENT
( c ■ ^ • !
EASTERN (Iraq).
^ | December 10, 1934.
CONFIDENTIAL.
!
2 Section 1.
[E 7372/190/93]
No. 1.
Memorandum respecting Commercial Interests of British India in Iraq.
(Communicated by His Majesty's Embassy at Bagdad, November 28;
Received in Foreign Office, December 10.)
THE commercial relations of India with Mesopotamia appear to go back
at least as far as the year 1639, when a British factory An East India Company trading post. was established at Basra.
By the year 1661 the volume of these relations, and the frequency of visits to that
port by merchantmen of the East India Company, had so far developed that it
was deemed necessary to define the rights and obligations of British traders in
Mesopotamia, with particular regard to sea and river-borne traffic, in a treaty
between Great Britain and Turkey. These rights and obligations were confirmed
and amplified by subsequent treaties negotiated at varying intervals of time, and
although India is not specifically mentioned therein, the traders whose interests
it was sought to protect or promote were, in general, more closely associated with
India than with Great Britain itself or with any other part of the British
Dominions or Dependencies.
With the development of steam navigation and the resultant speeding-up of
communications, the tendency was for traders established in India to lose their
predominant position in the foreign trade of Mesopotamia in the face of
competition by firms in Great Britain and on the continent of Europe; and of
recent years Japanese competition has made its appearance, with the result that
at the present moment India’s share of the trade of Iraq is probably lower than /
it has ever been before, amounting to less than 9 per cent, for imports and to just
over 10 per cent, for exports. Her share of the cotton goods import trade is still
quite considerable on paper (19 per cent.), but a quantity, not easily or exactly
ascertainable, of imports of this category classified as of Indian origin on the
ground that they reach Iraq from Indian ports are, in reality, Japanese manu
factures, exported in the first place to India and thence re-exported to Iraq
India’s other principal exports to Iraq are tea (16 per cent, of the total) and
timber (19 per cent.). Of Iraqi produce, India takes a considerable quantity of
dates (36,000, of a total of 114,000, tons in the financial year 1932-33), these being
the cheaper varieties of that commodity, and some wheat and hides and skins.
The number of Indian and Anglo-Indian residents, permanent and
temporary, in Iraq is very large, falling probably not far short of 30,000. They
may be divided into six categories, as follows :—
(a) Permanent residents in the Shia Holy Cities of Kerbala and Najaf.
(b) Pilgrims to the Shia Holy Shrines.
(c) Pensioners of the Indian Government.
(d) Employees of Iraqi Government Departments, in particular, the Iraq
Railways iVdministration.
(e) Domestic servants.
(/) Individuals engaged in commercial pursuits.
The number of Indian Shia Moslems belonging to category (a) must be in
the neighbourhood of 20,000. Only an approximate computation is possible, since
there is no system of compulsory registration of British subjects in force, and
there has hitherto been little advantage in the possession of documentary proof
of British nationality by these individuals. With the enactment of a Military
Service Law in Iraq, however, considerable importance may in the near future
attach to the possession of foreign nationality papers, and already applications
to the British consulate at Bagdad for passports are increasing rapidly in number.
But it cannot be said that the persons comprised in this category exercise, or are
ever likely to exercise, any influence on the commercial exchanges between India
and Iraq. They are not, as a rule, traders, and have, indeed, as is usually the
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