India and GCC Countries Trade

India & GCC Countries Trade

Table of Contents

 GCC – India Relations & General information

 Trade Indicators

 Trade with world

 Trade with GCC Countries

1. GCC – INDIA RELATIONS

GCC – India Relations

• India-GCC countries built on historical relationship, growing trade and investment, and presence of an 8.5 million Indians in the region.

• For India, the Gulf Cooperation Council (GCC) as a collective entity is of utmost importance. The Gulf constitutes the “immediate” neighbourhood of India separated only by the Arabian Sea. India has a significant interest in the stability, security, and economic prosperity of the Gulf. The GCC nations' efforts to integrate their economies are progressing quickly. India now has a significant trading relationship with the GCC. It has enormous potential to be India's long-term investment partner.

• The strategic cooperation can be seen in the light of the Memorandum of Understanding signed between the General Secretariat of the GCC and the Republic of India in September 2022, the framework agreement signed between the GCC and India in August 2004, and the desire of the two sides to enhance the strategic political and security dialogue, as well as economic and cultural cooperation and communication between the peoples.

• From a strategic point of view, India and GCC share the goal of political stability and security in the region. The common political and security concerns of India and GCC include cross-border terrorism in the Gulf region and South Asia. The emerging common security perceptions create further opportunities for GCC-India cooperation in the future.

2. GCC – INDIA ECONOMIC RELATIONS

Overview of GCC – India Economic Relations

• Economic relations between India and the GCC members have historically been considerable, with the GCC's large oil and gas reserves meeting the majority of India's energy needs. India’s old, historical ties with GCC States, coupled with increasing imports of oil and gas, growing trade and investment, and presence of approximately 6.5 million Indian workers in the region, are of vital interest to India. India’s economic linkage with the GCC have increased steadily, especially due to growth in oil imports.

• As per data from India’s commerce ministry, bilateral trade between India and the GCC has increased to US$154.73 billion in FY 2021-22 from US$87.4 billion in 202021. India’s exports to the GCC witnessed a 58.26 percent increase to about US$44 billion in FY 2021-22, against US$27.8 billion in FY 2020-21.

• From the strategic perspective, India and the GCC both want political stability and security in the region. The efforts for peace, security, and stability in the Gulf region and South Asia are a result of the shared political and security concerns of India and the GCC. The GCC States are undergoing significant transition and change, and the process of understanding and integration is maturing. Together with it, the areas of cooperation are expanding to include security as well as investments, trade and commerce, resource sharing, and human resource development.

India – a rising economic and military powerhouse

Creating order out of chaos

India, which gained independence from British rule in 1947, has achieved much in the ensuing period and now has the third-largest economy in the world. However, most of this growth happened only after 1991, when Prime Minister P. V. Narasimha Rao and Finance Minister Dr Manmohan Singh, loosened trade restrictions between India and other countries worldwide. Since then, India’s GDP per capita has increased significantly. Main drivers for this growth included the trend towards urbanization and subsequent increase in power consumption, the rapid rise of the middle class, and increased foreign investment. Furthermore, manufacturing has also received a major boost with the current BJP-led government’s Make in India program. On a social level, this growth has played a major role in tackling extreme poverty, a major and longstanding area of concern in India.

 The level of extreme poverty decreased sharply from 46% to approximately 13.4% between 1995 and 2015.

 India has the largest democracy and second-largest English-speaking population in the world.

 India is home to the Taj Mahal, a UNSECO World Heritage Site and one of the New7Wonders of the World.

3. GENERAL INFORMATION

General information about India

 Capital New Delhi

 Official language Hindi

 Population 2021 1,393,409,033

 Population density 464.15 people per sq km

 GDP 2021 US$3173.40B

 GDP per capita 2021 US$2,277.43

 Income tax 42.7%

 Corporate tax 40%

 Currency Indian rupee

 Exchange rate USD/INR=82.33

 Time zone UTC +05:30

 VAT 18.0%

 Average applied tariff rate 9.4%

The Republic of India occupies most of the subcontinent of India in southern Asia. It borders on China in the northeast. Other neighbours are Pakistan on the west, Nepal and Bhutan on the north and Burma and Bangladesh on the east. The country can be divided into three distinct geographic regions: the Himalayan region in the north, which contains some of the highest mountains in the world, the Gangetic Plain, and the plateau region in the south and central part.

Source: Avalara, PWC, index of economic freedom, export.gov, santander trade

Overview

In 2021, India exported US$394.81B and imported US$570.40B, resulting in a negative trade balance of US$-175.59B. Globally, India ranks 18 in exports and 10 in imports in 2021.

• Trade indicators

India’s top trade categories include Mineral fuels, mineral oils; bituminous substances; mineral waxes (HS Code: 27) ($226.8B) which represent 23.5% of the total trade of India, Natural, cultured pearls; precious stones; precious metals ... (HS Code: 71) ($126.5B) which account for 13.11%, Electrical machinery and equipment; image/sound recorders and reproducers … (HS Code: 85) ($75.56B) which account for 7.83%, Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof (HS Code: 84) ($72.58B) which account for 7.52%, and Organic chemicals (HS Code: 29) ($48.43B) which account for 5.02%.

• Trade with world

• Trade with GCC Countries

4.1 TRADE INDICATORS

India’s import indicators over time

India's import value index is at 723.67 in 2020 (2000=100).

The import share of GDP amounts to 22.86% in 2021.

India’s export indicators over time

India’s export value index has increased compared to 2015 and is at 651.97 in 2020 (2000=100).

The exports share of GDP amounts to 20.81% in 2021.

4.2 TRADE WITH WORLD

India is the 18th largest exporter in the world

In 2021, India exported US$394.81B and imported US$570.40B, resulting in a negative trade balance of US$-175.59B.

Globally, India ranks 18 in exports and 10 in imports in 2021.

Countries with which India has the highest surplus are USA, Bangladesh and Nepal.

Trade balance in billion US$

Countries where India earned the highest trade surpluses in 2021, in Billion

US$

60% of India’s exports with 15 trade partners

India exported $394.81B in 2021, making it the 18th largest exporter in the world. India’s top export destinations include USA ($71.51B), UAE ($25.45B), China ($23.04B), China, Bangladesh ($14.09B), and Hong Kong ($11.29B).

India imported $570.40B in 2021, making it the 10th largest importer in the world. India’s top import origins are China ($87.54B), UAE ($43.07B), USA ($41.39B), Switzerland ($29.49B), and SaudiArabia ($27.69B).

Top export partners in 2021 in billion

Top import partners in 2021 in billion

Export Growth by Market

India’s fastest growing export markets are China with $1.27B (+ 7.36%), Venezuela with $517M (+ 214%) and Australia with $515M (+ 16%).

Total Export Growth by Market (2019 - 2020)

FASTEST GROWING EXPORT MARKETS (2019 - 2020)

 China

 Venezuela

 Australia

$1.27B (+ 7.36%) $517M (+ 214%)

$515M (+ 16%)

Import Growth by Market

India’s fastest growing import markets are South Africa with $1.75B (+ 28.6%), Guinea with $606M (+ 160%) and Colombia with $589M (+ 158%).

Total Import Growth by Market (2019 - 2020)

FASTEST GROWING IMPORT MARKETS (20192020)

 South Africa

 Guinea

 Colombia

$1.75B (+ 28.6%)

$606M (+ 160%)

$589M (+ 158%)

4.3 TRADE WITH GCC COUNTRIES

Rank of GCC Countries according to trade with India

Bahrain

6th partners in GCC countries

Bahrain makes up 1.18% of India

total trade with GCC Countries

Oman

5th partners in GCC countries

Oman makes up 6.0% of India

total trade with GCC Countries

Kuwait

4th partners in GCC countries

Kuwait makes up 7.74% of India

total trade with GCC Countries

UAE

1st partners in GCC countries

UAE makes up 49.5% of India

total trade with GCC Countries

Saudi Arabia

2nd partners in GCC countries

Saudi Arabia makes up 26.0% of India total trade with GCC Countries

Qatar

3rd partners in GCC countries

Qatar makes up 9.6% of India

total trade with GCC Countries

India & GCC Countries total trade volume

In 2021, the export value of India to GCC Countries US$40,030.40M, which represents 28.9% of the total trade with GCC. The main export categories have been Mineral fuels, mineral oils and products of their distillation…., Natural, cultured pearls; precious, semi-precious stones… , Electrical machinery and equipment and parts thereof…, Iron and steel, and Organic chemicals.

The value of total imports from GCC Countries was US$98,352.99M which represents 71.1% of the total trade with GCC. The main categories were Mineral fuels, mineral oils and products of their distillation…, Natural, cultured pearls; precious, semi-precious stones…, Organic chemicals, Fertilizers, and Plastics and articles thereof.

In total, India had a negative trade balance with GCC Countries of US$-58,322.59M ​in 2021. The total value of the trade between India & GCC Countries in 2021 is equal to US$138,383.39M.

49.8% of India exports to GCC Countries are within 5 categories

India export value to GCC Countries was US$40,030.40M in 2021.

The top export products are Petroleum oils and oils from bituminous minerals… (HS code: 2710) (US$7594.77M), Jewellery articles and parts thereof, of precious metal… (HS code: 7113) (US$3016.61M), Telephone sets, including telephones for cellular networks… (HS code: 8517) (US$1959.06M), Diamonds, whether or not worked, but not mounted or set (HS code: 7102) (US$1933.91M), and Rice (HS code: 1006) (US$1508.43M).

Mineral fuels, mineral oils and products of their distillation…

Natural, cultured pearls; precious, semi-precious stones…

Electrical machinery and equipment and parts thereof…

Iron and steel Organic chemicals

90.4% of India imports from GCC Countries are within 5 categories

India import value from GCC Countries was US$98,352.99M in 2021.

The top import products are Petroleum oils and oils obtained from bituminous minerals; crude (HS code: 2709) (US$ 40145.79M), Petroleum gases and other gaseous hydrocarbons (HS code: 2711) (US$ 18078.17M), Diamonds, whether or not worked, but not mounted or set (HS code: 7102) (US$ 8761.55M), Gold (including gold plated with platinum) unwrought… (HS code: 7108) (US$ 7051.88M), and Petroleum oils and oils from bituminous minerals… (HS code: 2710) (US$ 3655.70M).

Top categories for import from GCC Countries in 2021, in million US$

Bahrain makes up 1.18% of India total trade with GCC Countries

In 2021, the export value of India to Bahrain US$899.87M, which represents 54.9% of the total trade with Bahrain. The main export categories have been Mineral fuels, mineral oils and products of their distillation; bituminous…, Plastics and articles thereof, Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof, Natural, cultured pearls; precious, semi-precious stones…, and Cereals.

The value of total imports from Bahrain was US$738.51M which represents 45.1% of the total trade with Bahrain. The main categories were Fertilizers, Inorganic chemicals; organic and inorganic compounds of precious metals…, Aluminium and articles thereof, Mineral fuels, mineral oils and products of their distillation; bituminous…, and Natural, cultured pearls; precious, semi-precious stones; precious metals…

In total, India had a positive trade balance with India of US$161.36M ​in 2021.

The total value of the trade between India & Bahrain in 2021 is equal to US$1,638.38M.

Kuwait makes up 7.74% of India total trade with GCC Countries

In 2021, the export value of India to Kuwait US$1,230.32M, which represents 11.5% of the total trade with Kuwait. The main export categories have been Cereals, Organic chemicals, Electrical machinery and equipment and parts thereof; sound recorders…, Ceramic products, and Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof. The value of total imports from Kuwait was US$9,482.19M which represents 88.5% of the total trade with Kuwait. The main categories were Mineral fuels, mineral oils and products of their distillation…, Organic chemicals, Copper and articles thereof,Aluminium and articles thereof, and Iron and steel. In total, India had a negative trade balance with India of US$-8,251.87M ​in 2021. The total value of the trade between India & Kuwait in 2021 is equal to US$10,712.51M.

Oman makes up 6.0% of India total trade with GCC Countries

In 2021, the export value of India to Oman US$2,493.25M, which represents 30% of the total trade with Oman. The main export categories have been Mineral fuels, mineral oils and products of their distillation…, Iron and steel, Iron or steel articles, Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof, and Cereals.

The value of total imports from Oman was US$5,827.73M which represents 70% of the total trade with Oman. The main categories were Mineral fuels, mineral oils and products of their distillation…, Fertilizers, Organic chemicals, Salt; sulphur; earths, stone; plastering materials, lime and cement, and Ships, boats and floating structures.

In total, India had a negative trade balance with India of US$-3,334.48M ​in 2021.

The total value of the trade between India & Oman in 2021 is equal to US$8,320.98M.

Qatar makes up 9.6% of India total trade with GCC Countries

In 2021, the export value of India to Qatar US$1,714.91M, which represents 12.9% of the total trade with Qatar. The main export categories have been Iron or steel articles, Cereals, Mineral fuels, mineral oils and products of their distillation…, Natural, cultured pearls; precious, semi-precious stones…, and Organic chemicals.

The value of total imports from Qatar was US$11,544.87M which represents 87.1% of the total trade with Qatar. The main categories were Mineral fuels, mineral oils and products of their distillation; bituminous…, Organic chemicals, Inorganic chemicals; organic and inorganic compounds of precious metals…, Plastics and articles thereof, and Fertilizers.

In total, India had a negative trade balance with India of US$-9,829.96M ​in 2021.

The total value of the trade between India & Qatar in 2021 is equal to US$13,259.77M.

Saudi Arabia makes up 26.0% of India total trade with GCC Countries

In 2021, the export value of India to Saudi Arabia US$8,245.42M, which represents 22.9% of the total trade with Saudi Arabia. The main export categories have been Mineral fuels, mineral oils and products of their distillation…, Organic chemicals, Cereals, Vehicles; other than railway or tramway rolling stock, and parts and accessories thereof, and Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof. The value of total imports from Saudi Arabia was US$27,689.35M which represents 77.1% of the total trade with Saudi Arabia. The main categories were Mineral fuels, mineral oils and products of their distillation…, Organic chemicals, Fertilizers, Plastics and articles thereof, and Aluminium and articles thereof. In total, India had a negative trade balance with India of US$-19,443.93M ​in 2021. The total value of the trade between India & Saudi Arabia in 2021 is equal to US$35,934.76M.

UAE makes up 49.5% of India total trade with GCC Countries

In 2021, the export value of India to United Arab Emirates US$25,446.64M, which represents 37.1% of the total trade with UAE. The main export categories have been Natural, cultured pearls; precious, semi-precious stones…, Mineral fuels, mineral oils and products of their distillation…, Electrical machinery and equipment and parts thereof…, Iron and steel, and Ships, boats and floating structures.

The value of total imports from United Arab Emirates was US$43,070.34M which represents 62.9% of the total trade with UAE. The main categories were Mineral fuels, mineral oils and products of their distillation…, Natural, cultured pearls; precious, semi-precious stones, Plastics and articles thereof, Salt; sulphur; earths, stone; plastering materials, lime and cement, and Iron and steel.

In total, India had a negative trade balance with India of US$-17,623.71M ​in 2021.

The total value of the trade between India & United Arab Emirates in 2021 is equal to US$68,516.98M.