India-GCC Relations

Introduction

The Gulf Cooperation Council (GCC) as a collective entity has tremendous significance for India. The Gulf constitutes the “immediate” neighbourhood of India separated only by the Arabian Sea. India, therefore, has a vital take in the stability, security and economic well-being of the Gulf. As a group, the GCC has been increasingly determining the economic, political, and security policies of its member States. The GCC countries are moving ahead rapidly with their economic integration efforts. The GCC has emerged as a major trading partner for India; it has vast potential as India’s investment partner for the future. The GCC’s substantial oil and gas reserves are vital importance for India's energy needs. The GCC countries are collectively host to a large Indian expatriate community. In short, the GCC offers tremendous potential for cooperation in trade, investment, energy, manpower, etc.

Economic and commercial relations

India enjoys traditionally cordial relations and cooperation with the GCC. India’s old, historical ties with GCC states, coupled with increasing imports of oil and gas, growing trade and investment opportunities, and presence of 3.5 million Indian workers in the region, are of vital interest to India. India’s economic linkages with the GCC have increased steadily during 1970s, 80s and 90s, especially due to growth in oil imports. These continue to make steady progress to-date. During 2002-03, India’s exports to GCC were around US $ 5 billion. The bilateral two-way trade exceeded US $ 12.5 billion and was growing at a steady pace. Information Technology exports to GCC stand at US $ 170 million and were poised for a significant upswing. A table of India's trade with the GCC states during 2001-02 and 2002-03 is enclosed.

Strategic relations

From the strategic point of view, India and GCC share the desire for political stability and security in the region. The common political and security concerns of India and GCC translate into efforts for peace, security and stability in the Gulf region and South Asia. The emerging common security perceptions create further opportunities for GCC-India cooperation in the future. The GCC states are going through important changes and transformation; the process of understanding and integration is coming of age. Along with it the areas for cooperation are also widening beyond investments, trade and commerce and sharing and development of human resources to security. This envisages jointly preparing to meet emerging domestic and regional challenges, foremost being the common threat from terrorism and extremism.

India’s trade with GCC countries

(All figures in US $ million)

* The above figures of Indian imports do not include imports of crude oil and petroleum products. During Year 2002-03, India imported crude oil worth approximately US $ 5, 759 million, a major portion of which was imported from the GCC countries.

India-GCC Industrial Conference: The GCC Secretariat General at Riyadh and the Confederation of Indian Industry (CII) are organizing a two-day “India-GCC Industrial Conference” on 17-18 February, 2004 at Mumbai. The Conference would focus on four priority sectors or themes: (i) Trade, (ii) Investment, (iii) Technology Transfer (including IT), and (iv) Industrial Cooperation (including SMEs/SSIs). A large number of Ministers, senior officials, industrialists and business leaders from India and the GCC states are expected to attend the Conference. The Conference is expected to provide a new momentum to the strong relations between the GCC States and India, particularly in the field of economic and commercial exchanges.