At a time when trade with countries in the Gulf region is picking up after a brief lull, controversial remarks made by the now-suspended Bharatiya Janata Party leaders on Prophet Muhammad have stirred a debate on whether they can affect India’s ongoing trade negotiations with some of these nations
Countries such as Saudi Arabia, Libya, United Arab Emirates (UAE), Indonesia, Kuwait, Qatar, Bahrain, Iran, Yemen, Oman, among other islamic nations, criticised the comments made by spokesperson Nupur Sharma and Naveen Jindal last week during a television debate. The Organisation of the Islamic Co-operation (OIC), collective voice of the Muslim world, condemned the remarks.
On its part, BJP not only distanced itself from the comments made by Sharma and Jindal, but also suspended them on Sunday.
India shares close ties with most of the countries in West Asia, especially the Gulf Cooperation Council (GCC). Some of these nations are even India’s biggest export markets.
GCC is a regional, inter-governmental political economic union comprising 6 countries–Bahrain, Kuwait, Oman, Qatar, UAE and Saudi Arabia. Region wise, it is India’s fourth largest trading partner after North America, EU and North-East Asia.
Most importantly, India is dependent on these countries for meeting its energy needs. Of the total imports from West Asia, nearly two-thirds consist of petroleum products. As far as India’s overall import basket is concerned, petroleum products have a share hovering around 30 per cent. For instance, a fifth of the total crude oil imports is met by Iraq, followed by Saudi Arabia and UAE at 18 per cent and 10 per cent, respectively.
UAE was also India’s second largest export and import market in FY22. Similarly, Saudi Arabia was India’s fourth largest trading and import partner during the last fiscal.
In February, India and UAE even signed a Comprehensive Economic Partnership Agreement (CEPA). The trade pact was implemented last month.
India and Oman have also agreed to undertake a joint feasibility study, before going ahead with a preferential trade deal on limited goods. Similarly, India is set to begin deeper engagement with the GCC countries to finalise a free trade agreement (FTA) with the group of nations.
India’s exports to the 6 GCC nations stood at $43.93 billion during FY22, up 58.3 per cent year-on-year, while imports stood at $110.72 billion, up nearly 86 per cent year-on-year.
The share of exports was 10.4 per cent as compared to the total exports, while that of imports stood at 18 per cent in FY21.
Petroleum products, precious and semi precious stones, plastics are the top imported items from GCC. Cereals, electrical equipment, apparels, machinery are the top exported items in the region.