India’s trade with Gulf Declined due to fall in Crude Oil Prices



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 3rd 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
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
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
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.

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