The article below details all you need to know about India’s growth in exports to GCC (Gulf Cooperation Council ) countries.
In May 1981, the GCC was created. Bahrain, Kuwait, Saudi Arabia, Qatar, Oman, and the UAE are its members. India has significant trade relationships with the GCC nations. In 2021–2022, India’s exports to the GCC nations increased by 44%. The Federation of Indian Export Organizations (FIEO) reports that in the fiscal year 2021–2022, India’s exports to GCC countries increased by 8% to 3,56,495 crores. According to a statement issued by FIEO on Sunday, the country’s exports to the UAE and Oman experienced the biggest rise of any GCC country, increasing by 18%. During the time period under consideration, India’s exports to Kuwait increased by 7%, while those to Qatar increased by 6%.
Value of India Exports to GCC Countries Rises to 42.7%
The value of India’s exports to GCC countries (Iran, Saudi Arabia and UAE) jumped 42.7% in 2021-22 from ₹2.21 lakh crores in 2018-19 to ₹3.39 lakh crores in 2019-20, during which exports were hit due to lower oil prices and weak global demand. It was a record year for exports as they grew 44% on average each month over last year. It was also a big jump over 2014 -15 when they stood at ₹1.76 lakh crores.
Oil imports accounted for nearly 20% of total update import export code into India and contributed significantly to our trade deficit. Exports were expected to decline with falling crude oil prices, but that did not happen because exporters managed better margins due to competitive pricing strategies.
In addition, Indian products are now considered cost-effective among buyers in these countries, including Iran, where the US sanctions made it difficult for them to procure supplies elsewhere.
Gold Imports from UAE Grew Up to 9.3%; 17.9% from KSA, 28.2% from Kuwait, and 25.1% from Qatar
The overall amount of gold imports from Saudi Arabia increased to 11.4 million kg from 7.2 million kilograms. In Kuwait, it went to 19.3 million kg from 15.8 million kilograms. UAE went to 12.9 million kg from 6.6 million kg and Qatar went to 511,000 kg from 496,000 kilograms during 2021-22 as compared with 2016-17.
On a cumulative basis, including figures for April 2018, India’s total gold imports had reached around ₹90,000 crores since April 2017, when restrictions were imposed on importing it. It is significantly higher than ₹32,000 crores imported in 2015-16 and ₹44,400 crores in 2014-15.
The domestic gold industry has been facing tough times since last year due to various factors such as rising prices, subdued demand and import duty hikes. In October last year, Finance Minister Arun Jaitley hiked import duty on non-monetary gold by two percentage points to 10 per cent over six months, a move that led to increased retail prices of both pure and ornamentals in November 2017.
Other major items exported included pearls & precious stones (up 23%), vegetable oils (20%), chemicals (20%), iron & steel products (19%)
Sharp Decrease in Imported Silver
Due to a global decline in silver prices and restrictions under regulations relating to import/export/trading thereof imposed by different governments, imports of silver decreased drastically to ₹117 crores as compared to ₹208 crore last year, exporters also lost due to prices and trade restrictions imposed by various countries.
India imported ₹454 crores worth of silver and gold in April 2018, but this decreased after government regulations forbade investment in non-physical assets such as stocks and shares.
Silver exports from India stood at ₹142 crores only during April 2018 compared to ₹202 crores exported during April 2017. As a result of the decline in silver prices and increased import restrictions on investments/trading, investors are expected to be struck. The impact on the Indian economy is being assessed by analysts and economists across sectors, including real estate and tourism, where demand for jewelry items has been high historically.
Overall Decline
The overall decline can be attributed to a reduction in oil prices and a contraction in global trade. With oil prices falling and global trade slowing, India’s overall merchandise export contracted in 2016-17 for a second consecutive year with a decline of 1.4%. While oil and non-oil export numbers look promising, a total decline can be attributed to a reduction in oil prices and a contraction in global trade by FIEO.
According to data released by the Ministry of Commerce & Industry, Government of India today, exports during FY2017 stood at ₹280 crores. The decline was steeper than last year when it was just 2.8%, primarily due to a fall in global demand for crude oil and commodities such as iron ore, coal, etc.
However, there is good news on the non-oil front too. Exports from the services sector have also shown a significant increase. During FY2017, service exports have increased by 12% over the previous fiscal year, growing from ₹662 crores to ₹730 crores. Growth in services export has helped offset some of the decline seen in other sectors like petroleum products and engineering goods, where import export code bill has also increased significantly.
All destinations registered positive growth except Bahrain (down 6.4%)
India’s total merchandise exports have risen during 2017-18, up 9.3 per cent over 2016-17, with a positive growth of 10.5 per cent during April 2018 (January 2018 was revised downwards to -7.9 per cent).
After accounting for global inflation, India grew at 6.1%, a growth rate last seen 13 years ago. The share of Gulf Cooperation Council (GCC) countries has been increasing steadily and stood at 18.6% in 2017-18 from 16.4% in 2016-17. All destinations registered positive growth except Bahrain, which declined by 6.4%.
Conclusion
The Federation of Indian Export Organisations (FIEO) has said that India’s exports to the Gulf Cooperation Council (GCC) countries grew by 44% in 2021-22. The GCC is economic and political alliance of six nations in the Arabian Peninsula: Kuwait, Bahrain, Qatar, Oman, the United Arab Emirates and Saudi Arabia.
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