Minority Issues – SC, ST, Dalits, OBC, Reservations, etc.

Why the Gulf matters for India?


From UPSC perspective, the following things are important :

Prelims level: Gulf Cooperation Council

Mains level: Indian diaspora in Gulf

India has hit out at the Organisation of Islamic Cooperation (OIC) over its statement condemning the comments made by two Indian leaders in retaliation to the insults on Hindu deities.

The spread of religious hatred should be condemned in any form.

But do you think that the onus of secularism has been bestowed only on a particular religious community?

It is often observed that the other community is free to make blasphemous comments on various deities in guise of the exercise of their freedom of speech!

What is the news?

  • The remark had triggered outrage in the Islamic world.
  • Qatar and Kuwait summoned India’s Ambassadors and handed over to them protest notes.
  • India has categorically rejected and condemned the controversial remarks.

Why is Gulf outraging?

  • Barring the Jewish state of Israel, the 10 other countries of the Gulf region — Saudi Arabia, Qatar, Iran, Iraq, Bahrain, Kuwait, UAE, Oman, Jordan and Yemen — together account for one-fifth of the world’s Muslim population.
  • They are among the strongest voices of the Muslim world.

Gulf countries and India

  • India has enjoyed centuries of good relations with countries like Iran, while smaller gas-rich nation Qatar is one of India’s closest allies in the region.
  • India shares good relations with most of the countries in the Gulf.
  • The two most important reasons for the relationship are oil and gas, and trade.
  • Two additional reasons are the huge number of Indians who work in the Gulf countries, and the remittance they send back home.

How much trade does India do with countries in this region?

  • The Gulf Cooperation Council (GCC) substantial oil and gas reserves are of utmost importance for India’s energy needs.
  • The GCC includes UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait.
  • It has emerged as a major trading partner of India and has vast potential as India’s investment partner for the future.

(1) UAE

  • 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.
  • In terms of total trade volume, the UAE ($72.9 billion) was behind the United States ($1.19 trillion) and China ($1.15 trillion).
  • The UAE 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.

(2) Saudi Arabia

  • At a total volume of $42.9 billion in 2021-22, 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.

(3) Iraq

  • It was India’s fifth largest trading partner in 2021-22 at $34.3 billion.

(4) Qatar

  • The total trade was $15 billion, accounting for just 1.4% of India’s total trade, but the country is India’s most important supplier of natural gas.
  • Qatar accounts for 41% of India’s total natural gas imports.
  • The UAE accounts for another 11%.

How much oil does India import?

  • More than 84% of India’s petroleum demand, which included crude oil and petroleum products, was met with imports.
  • The share of Persian Gulf countries in India’s crude imports has remained at around 60% over the last 15 years.
  • India sourced crude oil from 42 countries in 2021-22, up from 27 countries in 2006-07. Hence the sources are now more diversified.
  • In 2021-2022, the largest exporter of oil to India was Iraq, whose share has gone up from 9% in 2009-2010 to 22%.
  • Saudi Arabia has accounted for 17-18% of India’s oil imports for over a decade. Kuwait and UAE remain major oil exporters to India.
  • Iran used to be the second largest oil exporter to India in 2009-2010, its share went down to less than 1% in 2020-21, due to US sanctions.

Why Gulf matters?

Ans. Huge remittances

  • More than 13.46 million Indian citizens work abroad. If Persons of Indian Origin are added, this number goes up to over 32 million.
  • Counting only the 13.4 million non-resident Indians (NRIs), the Gulf has the largest numbers.
  • The UAE (3.42 million), Saudi Arabia (2.6 million) and Kuwait (1.03 million) together account for over half of all NRIs.
  • In terms of remittances from abroad, India was the largest recipient in 2020 at $83.15 billion, according to World Bank data.
  • This was nearly twice the remittances to the next highest recipient, Mexico, at $42.9 billion.
  • The UAE accounted for 26.9%, Saudi Arabia for 11.6%, Qatar for 6.4%, Kuwait for 5.5% and Oman for 3%.
  • Beyond the GCC, remittances from the US accounted for 22.9%, second only to the UAE.


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1 year ago

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