Economic relations of India with West Asia
- June 12, 2022
- Posted by: admin1
- Category: DPN Topics
Economic relations of India with West Asia
Subject : IR
Section : Bilateral relations
- India’s cultural, economic and trade ties with the countries of the West Asian region are deep and abiding.
- Starting with maritime trade, the exchange of goods, services and cultures between the people of the Gulf region including those on the western shores of the Arabian Sea and the people of India’s southern and western States reaches back several millennia and signiﬁcantly predates even the foundation of the Islamic faith.
- The West Asian region also served as a land trade bridge to Greece, Rome and other early European empires and a ﬂourishing trade in spices, cloth, silk and indigo in exchange for gold and silver is well recorded.
- In a more contemporary historical context, the British colonial era saw the advent of even a loose common monetary system with the rupee serving as legal tender in several Gulf states till the middle of the 20th century.
- It was also the discovery and subsequent commercial exploitation of oil in the Gulf region during the colonial era that started to alter the balance of trade ﬂows between India and the countries in the region.
- Today, the countries of the West Asian region collectively account for well over a sixth of India’s total bilateral merchandise trade and contribute about three-ﬁfths of India’s crude oil supplies.
- The region is also a major provider of jobs and economic opportunities to Indian workers, professionals and entrepreneurs and houses about 89 lakh Indians.
- These non-resident Indians (NRIs) annually send home about $40 billion, and account for more than 55% of the country’s total remittance inﬂows.
- Investments from sovereign wealth funds and other large investors from the GCC have also climbed steadily in recent years and India, which earlier this year signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, is looking to signiﬁcantly boost trade ties with the region by negotiating more such trade and investment pacts.
Oil and Gas Trade
- Out of India’s total imports of crude oil, the share of the Gulf countries has remained fairly steady at about 60% over the last 15 years.
- In 2020-21, the top oil exporter to India was Iraq, with a share of more than 22%, followed by Saudi Arabia — about 18%.
- The UAE, Kuwait and Oman were other Gulf countries among the top10 suppliers of crude oil to India in the ﬁscal year ended March 2021.
- Over the ﬁve years from 2017 through 2021, Iran and the GCC member states accounted for a 15.3% share of India’s cumulative two-way merchandise trade of $3.98 trillion in that period.
- Of the $609 billion of exports and imports that the seven countries accounted for in this period, the UAE contributed the lion’s share of $277.4 billion, or almost 7%, making it one of India’s largest trading partners.
- Saudi Arabia was next with $153 billion.
- The region is today a key market for several Indian commodities ranging from tea and basmati rice to electrical equipment, apparel, and machinery.
- Reﬂecting this importance, India and the UAE signed the CEPA in February with the aim of increasing the total value of bilateral trade in goods to more than $100 billion in ﬁve years and getting services trade to exceed $15 billion over the same period.
- The trade pact will provide Indian exporters preferential market access on ‘99% of the country’s exports to the UAE in value terms, particularly from labour intensive sectors such as gems and jewelry, textiles, leather, footwear, sports goods, plastics, furniture, agricultural and wood products, engineering products, pharmaceuticals, medical devices, and automobiles.
- With the region serving as a key hub to markets in Africa, India is keen to gain tariﬀ free access for its exports not just to the Gulf region but also to countries across Africa.
Overseas Jobs for Indians
- The West Asian region provides among the largest number of overseas jobs for Indians, with nearly 89 lakh Indians living and working in the Gulf economies.
- The UAE accounts for the largest share of NRIs in the region and is home to more than 34 lakh Indians.
- Saudi Arabia with close to 26 lakh and Kuwait with over 10 lakh are the other large providers of jobs and economic opportunities for Indians.
- The remittances that they sent back home in 2017, according to Pew Research data, accounted for about 55% of the total $68.97 billion in inward remittances received in India from across the world that year.
Exact dates of African cheetahs’ arrival in India not confirmed
- The governments of South Africa and Namibia are in the process of fine-tuning the move and a decision would be made later.
- African cheetahs were expected to arrive in India in August this year, after several delays due to the COVID-19 pandemic.
- South Africa and Namibia are vaccinating the cheetahs to prevent any pathogens from spreading.
- They are also following the protocols of international translocation as underlined in the Convention on International Trade in Endangered Species (CITES).