India's Trade with Arabian Gulf States Declined Due to the Fall in Crude Oil Prices By Shafeeq Rahman

India is a major trading partner of the Gulf countries but due to political disturbances in region and fall of petroleum prices, volume of trade has been declined according to the latest release statement. In spite of increasing India’s overall volume of international trade at the rate of 2.75% between April-December 2014 to its previous quarter, total trade between India and Gulf has decreased 4.52%. Trade volume is mainly affected due to decrease of import value. Export with GCC has increased at 8.76% while the import has decreased at 10.56%.

Balance of trade is mainly moved in favour of India as it exporting more than import, improved from -42385.27 to -31082.21 Million$ in 3^rd quarter of 2014-15 financial year. United Arab Emirates, Oman and Bahrain are mainly adverse affected countries in terms of balance of trade and decreasing of volume.

India's Trade with Gulf (In Million $)
Particular	Period	UAE	Saudi Arabia	Oman	Kuwait	Qatar	Bahrain	Total - GCC	Total - World
Export	Apr-Dec 2013	22443.74	8864.9	2260.03	749.78	498.13	532.04	35348.63	231829.9
	Apr-Dec 2014	25105.87	9500.81	1793.39	884.19	792.94	366.26	38443.47	236089.9
	%Growth	11.86	7.17	-20.65	17.93	59.18	-31.16	8.76	1.84
Import	Apr-Dec 2013	22892.11	27010.08	2590.95	13515.57	11244.47	480.73	77733.9	338907.3
	Apr-Dec 2014	21081.52	23180.44	1487.31	11418.91	11997.36	360.13	69525.68	350387.6
	%Growth	-7.91	-14.18	-42.6	-15.51	6.7	-25.09	-10.56	3.39
Total Trade	Apr-Dec 2013	45335.85	35874.98	4850.98	14265.35	11742.6	1012.77	113082.5	570737.2
	Apr-Dec 2014	46187.39	32681.25	3280.7	12303.1	12790.3	726.39	107969.2	586477.5
	%Growth	1.88	-8.90	-32.37	-13.76	8.92	-28.28	-4.52	2.76
India's Trade Balance	Apr-Dec 2013	-448.37	-18145.2	-330.92	-12765.8	-10746.3	51.31	-42385.3	-107077
India's Trade Balance	Apr-Dec 2014	4024.35	-13679.6	306.08	-10534.7	-11204.4	6.13	-31082.2	-114298

Import is declined due to devaluation of petroleum products which was the main source of import from Gulf. Around 60% of total India’s import from Gulf comes through the crude petroleum and it consists 40% of India’s total import of crude oil.

India's Import of Crude Petroleum from Gulf (In Million $)
Particular	Period	UAE	Saudi Arabia	Oman	Kuwait	Qatar	Total - GCC	Total - World
Import of Crude Petroleum	Apr-Dec 2013	8634.42	22939.13	1339.36	11999.3	2933.08	47845.29	106677
	Apr-Dec 2014	9320.17	18189.9	527.83	9821.1	1850.04	39709.04	98566.68
	%Growth	7.94	-20.70	-60.59	-18.15	-36.93	-17	-7.60
Share of crude petroleum in total import	Apr-Dec 2013	37.72	84.93	51.69	88.78	26.08	61.55	31.48
Share of crude petroleum in total import	Apr-Dec 2014	44.21	78.47	35.49	86.01	15.42	57.11	28.13
Share of country in India's total import of crude petroleum	Apr-Dec 2013	8.09	21.50	1.26	11.25	2.75	44.85	100
Share of country in India's total import of crude petroleum	Apr-Dec 2014	9.46	18.45	0.54	9.96	1.88	40.29	100

Such adverse impact on balance of trade to Gulf countries may discourage the trading relations with India in long term as it will come with decline in export also. Oman and Bahrain are countries which have decreased the export also to minimise its deficits. India has to strategize its commercial relationship with Gulf until the prices of petroleum scaled down to its normal rates.