The GCC now contributes 15 per cent of India’s total trade and sectors like energy, defence, security and health are growing in the region….reports Asian Lite News
Showing strong growth, the bilateral trade between India and the Gulf Cooperation Council (GCC) countries reached 162 billion dollars last year, the government has said.
The GCC now contributes 15 per cent of India’s total trade and sectors like energy, defence, security and health are growing in the region, according to Aseem P. Mahajan, Joint Secretary (Gulf), Ministry of External Affairs.
At a FICCI event in the national capital, he said that while overall trade figures might fluctuate, India’s exports to the GCC nations have shown “consistent growth”.
According to him, the country exports various food processing, jewellery, synthetic fibres and yarns, textiles, pharmaceuticals and engineering goods, and chemical products to the GCC countries.
Mahajan emphasised that the cultural and bilateral relations between India and the Gulf countries are strong.
India’s economic linkages with the GCC have increased steadily, especially due to growth in oil imports. These have increased significantly in FY22 due to rising oil prices in the wake of the Russian-Ukrainian conflict as well as due to the resumption of demand following the Covid-19 disruption.
As per the 2022 government data, GCC countries contribute almost 35 per cent of India’s oil imports and 70 per cent of gas imports. India’s overall crude oil imports from the GCC in 2021-22 were about $48 billion, while LNG and LPG imports in 2021-22 were about $21 billion.
Since FY2017-18, on a compounded annual growth rate basis, bilateral trade between India and the GCC has grown by 10.57 per cent.
In February this year, Prime Minister Narendra Modi visited the United Arab Emirates (UAE) and Qatar. PM Modi held wide-ranging talks with the top leadership to take forward the bilateral strategic partnership.
The Prime Minister also inaugurated the BAPS Mandir, the first Hindu temple in Abu Dhabi, and addressed the Indian diaspora.
The two countries are among each other’s top trading partners with a bilateral trade of about 85 billion dollars in 2022-23. The UAE is also among the top four investors in India in terms of foreign direct investments in 2022-23.
PM Modi also visited Qatar and held wide-ranging talks with the leadership, focusing on significantly expanding bilateral ties in areas of trade, energy, investment and new technology. Bilateral trade between India and Qatar currently stands at roughly 20 billion dollars.
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‘Multifaceted ties’
India’s “multi-faceted” relations with GCC countries continue to strengthen in all areas of cooperation, including economic, energy security, culture, strategic and people-to-people ties, Kirti Vardhan Singh, the Minister of State for External Affairs, has assured Parliament.
“Gulf countries are major trade and investment partners for India. We also have a strong energy partnership with these countries. Besides, many Indians reside in Gulf countries,” Singh told Alok Kumar Suman, a Member of the Lok Sabha, the lower House of Parliament.
Suman had asked a series of questions about India-Gulf relations during Parliament’s “question hour” when Ministers reply to queries by members about various issues. He asked the government in this instance to outline “steps taken to boost the India-Gulf relations.”
The Minister pointed out that “India has long-standing, historic and close relations with all countries of Gulf region.”
Singh is the minister in charge of the Gulf region in India’s recently formed government after national elections.
India’s extended neighbourhood
The UAE has consistently been India’s principal trading partner within the Gulf and is India’s third-largest trading partner overall, with Saudi Arabia in fourth place.
India’s growing strategic and economic interests in the Gulf region have resulted in a new framework for India-Gulf ties based on investment, political relations, and defence and security cooperation.
The increased Gulf investments in India have also increased economic cooperation between India and the Gulf. Most notably, with India becoming an increasingly attractive economic market, Saudi Arabia and the UAE had announced investment targets in India of USD 100 billion and USD 75 billion, respectively.
The UAE is the seventh largest source of foreign direct investment (FDI) in India, currently at USD 15.3 billion. Saudi Arabia had invested USD 3.2 billion as of March 2022, while Qatar invested over USD 1.5 billion last year.
In August 2023, the Qatar Investment Authority also announced an investment of USD 1 billion in Reliance Retail Ventures. Additionally, in February 2024, Saudi Aramco stated that there were serious discussions with Indian companies to enhance the company’s downstream investments in India.
Moreover, in September 2023, Modi and Crown Prince Mohammed Bin Salman signed an agreement to set up a joint task force to fast-track the project in Ratnagiri.
India engaged with the I2U2 grouping and joined the India-Middle East-Europe Economic Corridor (IMEC). During PM Modi’s visit to the UAE in February, India and the UAE counterparts also signed an inter-governmental framework agreement on IMEC.
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