Why the Gulf matters for India

Context: BJP’s action against two of its spokespersons follows outrage from several Gulf countries. The BJP’s action against its own leaders underlines the significance of the Gulf region for India.

Key Points: 

India’s relations with Gulf countries have been shaped by energy needs, trade, and remittances from NRIs working there.

• The UAE was India’s third-largest trading partner in 2021-2022 and second-largest for both exports ($28 billion) and imports ($45 billion) when these are counted individually. The country accounted for 6.6% of India’s total exports and 7.3% of imports in the last financial year, up 68.4% since the previous year when international trade was impacted by the pandemic. 
• Saudi Arabia was India’s fourth-largest trading partner. While exports were low at $8.76 billion (2.07% of India’s total exports), imports from Saudi Arabia were the fourth largest at $34.1 billion (7%), up 50% from the previous year. Most of it was crude oil. 
• Iraq was India’s fifth-largest trading partner in 2021-22 at $34.3 billion. The country is India’s most important supplier of natural gas, accounting for 41% of India’s total natural gas imports. The UAE accounts for another 11%.
• Iraq was also the largest exporter of oil to India from 2021-to 2022. The share of Iraq has gone up from 9% in 2009-2010 to 22%. Saudi Arabia accounted for 17-18% of India’s oil imports for over a decade. Kuwait and UAE also remain major oil exporters to India. Iran used to be the second-largest oil exporter to India from 2009-to 2010; its share went down to less than 1% in 2020-21 due to US sanctions. 
• India received remittances from abroad to the tune of $83.15 billion in 2020. 
• According to World Bank data, India received $83.15 billion as remittances from abroad in 2022. This was almost twice the remittances to the next highest recipient, Mexico, at $42.9 billion.