India-Gulf Cooperation Council Trade Reaches $162 Billion, Strengthening Energy and Defence

By R Anil Kumar

• India-Gulf Cooperation Council (GCC) bilateral trade reaches $162 billion, exports show consistent growth. India exports various food processing, jewellery, synthetic fibres and yarns, textiles, pharmaceuticals and engineering goods, and chemical products to the GCC countries.

• The India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, has significantly boosted trade relations with the UAE-Aseem R Mahajan, Joint Secretary for the Gulf at the Ministry of External Affairs

• Mahajan emphasised that the cultural and bilateral relations between India and the Gulf countries are strong

New Delhi. Aseem R Mahajan, Joint Secretary for the Gulf at the Ministry of External Affairs, stated that the Gulf Cooperation Council (GCC) now contributes 15% to India’s total trade, with bilateral trade between India and the region reaching $162 billion last year.

Speaking at the ‘India MENA Business Dialogue: Bridging Economics, Fostering Growth’ organised by FICCI, Mahajan emphasised the growing multi-faceted partnership between India and the Gulf, which spans sectors such as energy, defence, security, and health.

Mahajan noted that while overall trade figures may fluctuate, India’s exports to the GCC have consistently grown.

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.

He mentioned that India exports a variety of products, including food processing goods, jewellery, synthetic fibres and yarns, textiles, pharmaceuticals, and engineering goods, and chemical products, and highlighted these areas as having significant potential. He also pointed out that the India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, has significantly boosted trade relations with the UAE.

Mahajan highlighted key initiatives in financial connectivity, such as the on-going integration of India’s UPI system with the UAE’s JAYWAN card and RuPay. He also mentioned the operational local currency settlement system in Dirham and UPI as a model that other countries are considering. Emerging opportunities in education and connectivity, particularly through the India-Middle East-Europe Economic Corridor, were also noted as areas with significant potential.

Investment opportunities from Sovereign Wealth Funds in Saudi Arabia, the UAE, Qatar, and Kuwait are being closely monitored. Mahajan indicated strong interest in sectors like infrastructure, hydrocarbons, renewable energy, and technology, mentioning that diverse areas such as food processing, technology, health, hospitality, and tourism present potential for fruitful joint ventures and partnerships.

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 thefocus 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.