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Brief on India-Kuwait Trade and Economic Relation |
Kuwait is a small, rich, relatively open, petroleum-based economy with heavy dependence on foreign manpower. It has always offered an open, highly competitive and affluent market for capital and consumer goods and for project exports. It has estimated crude oil reserves of 100 billion barrels or 8-10% of world reserves. Kuwait oil revenues constitute the main source of income and amount to approximately 95% of its revenues. Kuwait has posted record budget surplus of KD 13.2 billion ($ 47 billion) during fiscal year 2011-12 for the 13th consecutive year, previous high being KD 9.33 during 2007-08. Its GDP per capita was $38,778.39 in 2010. The climate in Kuwait is not suitable for agriculture; resultantly, it depends on imports from other countries for all its food requirements. To meet its need for potable water, Kuwait depends on either desalination or import.
2. Kuwait is a relatively diverse project market. It is expected to award contracts worth more than $ 117 billion in various sectors during 2012-16 as part of its Development Plan. The projects cover a wide range and include oil and gas sector both upstream and downstream, construction, including new cities, hospitals and housing units, infrastructure, including roads, airport, port, metro and railway projects, power and transmission, petrochemicals, gas processing, pipeline, etc.
3. Historically, Indo-Kuwaiti relations have always had an important trade dimension. The overall trend of our trade with Kuwait has been positive. India-Kuwait trade was US$ 17.56 billion in 2011-2012, of which non-oil trade accounted for approximately US$ 1.9 billion (approx) while petroleum exports from Kuwait to India were approximately US$ 15.67 billion. Our exports to Kuwait during 2010-11 and 2011-12 were over US$ 1 billion which in the past had been in the range of $ 700-800. India has consistently been among the top ten trading partners of Kuwait. The bilateral trade during 2007-08 to 2011-12 was as follows:
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India-Kuwait Bilateral Trade FY 2007-08 to 2011-12 |
|
2007-08 |
2008-09 |
2009-10 |
2010-2011 |
2011-12 |
Indian Exports to Kuwait |
681.54 |
797.50 |
782.45 |
1856.01* |
1,181.41 |
Indian Imports from Kuwait |
7,704.25 |
9593.74 |
8,249.49 |
10,313.64 |
16,375.37 |
Total |
8,385.79 |
10,391.24 |
9,031.94 |
12,169.65 |
17,556.78 |
Source: Department of Commerce, M/o Commerce & Industry (MOCI), GOI
* The figure is revised as per the latest data of MOCI. Earlier it was US$ 1,959.48 million. |
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2007-08 |
2008-09 |
2009-2010 |
2010-2011 |
2011-2012
(April – Sept) |
Indian Exports to Kuwait |
2,744.90 |
3,628.40 |
3,710.37 |
8,915.17 |
2,658.78 |
Indian Imports from Kuwait |
30,959.93 |
43,199.44 |
38,987.99 |
46,976.02 |
28,414.00 |
Total |
33,704.83 |
46,827.85 |
42,698.36 |
55,891.20 |
31,072.78 |
Source: Department of Commerce, M/o Commerce & Industry, GOI
All figures on FOB basis |
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Note : POL imports accounted for US$ 7,278.97 million (Rs. 29,291.29 crores) in the year 2007-08; US$ 9,193.78 million (Rs. 41,402.19 crores) in the year 2008-09; US$ 7,909.80 million (Rs 37,391.30 crores) in the year 2009-10; US$9729.09 million (Rs 44,320.03 crores) in the year 2010-11; and US$ 15,667.11 million (Rs.75,813.01 crores) in the year 2011-12.
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| India’s Exports to Kuwait |
4. During 2011-12, the top 5 items of exports from India were cereals; articles of iron and steel; pressure vessels reactors, columns/towers or chemical storage tanks and industrial valves; electrical machinery and equipments, sound recorders and reproducers, television image; and meat & edible meat offal. A pie chart on our exports to Kuwait is given below:
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Source: Department of Commerce, Ministry of Commerce & Industry, Government of India
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India’s Imports from Kuwait |
5. India’s imports from Kuwait went up by 58.77% from US$ 10.313 billion in 2010-11 to US$ 16.375 billion in 2011-12. In Rupee terms, the imports rose by 68.6% from Rs.46,976.02 crores to Rs.79,188.34 crores in the corresponding period. India imported US$15.67 billion (Rs.75,813.01 crores) worth of POL from Kuwait in the year 2011-12.
6. India’s imports from Kuwait (excluding POL) were US$ 708.26 million in 2011-12. A pie-chart showing the share of top 5 items of imports (excluding Petroleum & its products) - organic chemicals, iron and steel, salt; sulphur; earths and stone; plastering materials; and lime and cement, plastic and its articles and aluminum and its articles - is given below: |
Source: Department of Commerce, M/o Commerce & Industry, Government of India
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| Non-Oil Bilateral Trade
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7. Total non-oil bilateral trade between India and Kuwait dropped by 21.5% from US$2,397.84 million in 2010-11 to US$ 1,882.92 million in 2011-12. In Rupee terms, it dropped by 17.42% from Rs.10,908.79 crores in 2010-11 to Rs.9,007.99 crores in 2011-12. |
India-Kuwait Non-Oil Trade FY 2008-09 to 2011-12 |
|
2008-09 |
2009-2010 |
2010-2011 |
2011-12 |
Indian Exports to Kuwait |
755.88 |
780.23 |
1813.29 |
1174.66 |
Indian Imports from Kuwait |
399.96 |
339.69 |
584.55 |
708.26 |
Total |
1,155.76 |
1119.92 |
2397.84 |
1882.92 |
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2008-09 |
2009-2010 |
2010-2011 |
2011-12 |
Indian Exports to Kuwait |
3,434.14 |
3699.89 |
8252.80 |
5632.66 |
Indian Imports from Kuwait |
1,797.25 |
1596.69 |
2655.99 |
3375.33 |
Total |
4,387.27 |
5,231.39 |
10,908.79 |
9007.99 |
Source: Department of Commerce, Ministry of Commerce & Industry, Government of India
All figures on FOB basis | |
| Agreements between India and Kuwait in the Economic Field |
- Trade Agreement was signed in February 1974.
- MOU on cooperation in the field of Telecommunications was signed in February 1992.
- Agreement for the promotion of Economic, Commercial and Technical Cooperation was signed in February 1992.
- Agreement for Encouragement and Reciprocal Protection of Investment was signed in November 2001 and ratified in June 2003.
- Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs, Psychotropic Substances and Precursor Chemicals and Related Matters was signed in June 2006 is awaiting ratification.
- MOU on Civil Aviation between India and Kuwait authorities, latest one signed in June 2007.
- Agreement on the Avoidance of Double Taxation and Prevention of Fiscal Evasion of Taxes on Income was signed in June 2006; it came into force with effect from October 17, 2007
- MOU on Health Cooperation was signed on April 23, 2012.
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| Kuwaiti Investment in India |
According to Secretariat for Industrial Assistance (SIA) figures, Kuwaiti investment in India has been very modest. According to SIA approved FDI figures from Kuwait during 2000-12 are as follows:
Amount in Rs. Million
2000-04 |
2005 |
2006 |
2007 |
2008 |
Cumulative till February 2012 |
175.15 |
8.73 |
123.73 |
1.4 |
9.85 |
843.80 |
Kuwait Investment Authority (KIA) has indicated that it has invested about $ 1.0 billion through the stock exchange/institutional fund managers. |
| Presence of Indian Corporate Sector in Kuwait |
- M/s Larsen & Toubro Ltd
- Ranbaxy Laboratories Limited
- M/s Wockhardt India
- Dr. Reddy’s Laboratories
- Lupin Limited,
- Claris Lifesciences Limited
- IPCA Lab
- Cadila Pharmaceuticals Limited
- Cadila Healthcare Limited
- Ambalal Sarabhai
- Dr. Reddy’s Lab and Cipla Limited
- Punj Lyod
- Shapoorji Pallonji
- TATA Consultancy Services
- Toyo Engineering Co.
- Apollo Hospital group and Fortis Group of India
- Bridge & Roof Company Ltd
- UTI Asset Management Company
- KEC International Ltd, Mumbai
- Shalimar Valves
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| Indian PSUs in Kuwait |
- LIC (International),
- LIC Housing Finance Company,
- New India Assurance Company,
- Oriental Insurance Company and
- National Aviation Company – NACIL (including Indian and Air India)
- ONGC TERI Biotech Ltd (OTBL)
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