By James Mathew
Crude oil is among the major import items by India from the Gulf region, especially from Saudi Arabia, while UAE the is major destination for India's jewellery exports
After almost a five years of a downward trend, India’s exports and imports trade with the Gulf region registered positive growth in the 6-month period of the current financial year, beginning from April 2018.
Indian exports to the GCC region during April-Sept 2018 were to the tune of $21.09 billion, as against $20.55 billion during the same period a year ago, registering an uptick of 2.65 percent, albeit marginally.
India’s imports from the GCC region, however, have picked up by a robust 30.70 percent in the first 6-month period of FY19, going up to $38.24 billion as against $29.26 billion, according to the latest data available with Directorate General of Commercial Intelligence and Statistics (DGCIS) under India’s Department of Commerce.
The trend reversal in the trade with the GCC region, one of India’s major trading partners, comes after consistent negative growth in exports to and imports from the region since 2013.
Indian imports from GCC, however, were in the positive territory in FY18, posting a 16.14 percent, after registering negative growth since 2013-14. The rise in crude oil prices, especially in the second half FY18, inflating India’s import bill, was said to be main reason for increase in imports from the region in last fiscal.
Crude oil is among the major import items by India from the Gulf region, especially from Saudi Arabia.
India’s exports to GCC mainly consists of engineering goods, gems and jewellery, petroleum products, precious metals, food products including seafood, meat, tea, fruits and vegetables, textiles and chemicals.
UAE is the major destination for India’s jewellery exports, accounting for about 80 percent of India’s exports.
Within the GCC region, India’s trade with all member countries, except Oman, turned positive during April-Sept 2018, compared to the corresponding period last year.
“Both export and import intensity have gone up in the latest 6-month period in India’s trade with the GCC region, which is a welcome change as it comes after almost a five year period of negative growth trend in our trade with that region,” Dr Ajay Sahai, Director General and CEO of Federation of Export Promotion Organisations (FIEO), told Arabian Business.
Sahai said the export promotion body expected the growth to pick up further momentum in the coming quarters as well.
The Indian government’s decision on Friday to increase interest equalisation to 5 percent from the prevailing 3 percent to the small and medium exporters is expected to give a further impetus to exports in the coming months.
The 2 percent hike interest equalisation, which is a form of export subsidy, will now enable to access export credit at competitive rates, close to international benchmark.
Ganesh Kumar Gupta, president of FIEO, said the decision on the hike in interest equalisation was a very timely move, as it comes at a time when interest rates in India have started moving northwards already.