India-Gulf Trade Relations

Abstract

This paper analyses India's trade relations with the Gulf region comprising six members of the Gulf Cooperation Council (GCC) -- namely, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE)—Iran and Iraq. While it is evident that India's trading relations with the Gulf region has transformed considerably over the years primarily underpinned by burgeoning economic growth, the structure and pattern of trade is yet to be diversified. The bilateral trade volume has surpassed USD100 billion mark, but, India's export basket continues to be concentrated to few traditional items, signifying less dynamism. Notably, the higher growth in bilateral trade has happened in the absence of any specialised policy framework for trade promotion, although there are occasional bilateral interactions and exchanges involving multiple stakeholders. There are huge potentials for diversifying India's export structure based on certain new growth sectors in which India has global comparative advantages with respect to the Gulf regions' imports structure. Therefore, there is a pervasive need for a unified Gulf specific trade strategyinvolving government, private sector and trade bodies, which could be called, GULF DIRECT. Such a special strategy would not only diversify India's trade basket, but, would also synergise other economic and commercial avenues of cooperation with the strategically important Gulf region.