India has maintained good relations with countries such as Iran for centuries, while Qatar, a low-gas-rich country, is one of India’s closest allies in the region. India shares good relations with most of the countries in the Gulf.
The two main reasons for the relationship are oil and gas and trade. Two additional reasons are the large number of Indians working in the Gulf countries and the remittances they send back to their hometowns.
How much trade does India have with countries in the Gulf region?
According to the Indian Embassy in Riyadh, the Gulf Cooperation Council (GCC), which includes the UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait, has “emerged as India’s key trading partner” and “has the potential to become India’s investment partner in the future”. The GCC’s substantial oil and gas resources are vital to India’s energy needs.
United Arab Emirates: The UAE was India’s third largest trading partner in 2021-2022, and the second largest country when calculated separately for both exports ($ 28 billion) and imports ($ 45 billion).
In terms of total trade volume, the United Arab Emirates ($ 72.9 billion) is next to the United States ($ 1.19 trillion) and China ($ 1.15 trillion). The UAE accounted for 6.6% of India’s total exports and 7.3% of its imports in the last financial year, an increase of 68.4% over the previous year when international trade was affected by the epidemic.
Saudi Arabia: With a total of $ 42.9 billion in 2021-22, Saudi Arabia was India’s fourth largest trading partner.
While exports fell to $ 8.76 billion (2.07% of India’s total exports), imports from Saudi Arabia became the fourth largest country at $ 34.1 billion (7%), up 50% from the previous year. Most of it is crude oil.
Iraq: Iraq was India’s fifth largest trading partner with a value of $ 34.3 billion in 2021-22.
Qatar: Total trade was $ 15 billion, just 1.4% of India’s total trade, but the country is India’s most important natural gas supplier.
Despite the outbreak of diplomatic conflict last weekend, Vice President Venkaiah Naidu, who is on a three-day visit to Qatar, said on Sunday that Qatar had agreed to contribute 41% of India’s total natural gas imports. The UAE has agreed to import another 11% of natural gas.