Indian merchandise exports to the six Gulf Cooperation Council countries declined 18.7 per cent in 2015-16. Rating agency Crisil said this “decline has been led by falling oil prices”. Crisil Research said a quarter of the exports to the region are of petroleum products.

“This has had a negative impact on remittances from the region, which declined for the first time in six years, falling 2.2 per cent,” the Crisil research team pointed out in a note.

Even at the lower current level of remittance of $36 billion from GCC countries, including Saudi Arabia, Oman, the UAE, Qatar and Bahrain, it, however, more than funded the goods trade deficit leaving a surplus of $22 billion, the rating agency mentioned.

Exports to each of the GCC countries are different. While petroleum exports account for the largest chunk to Saudi Arabia and Oman, gems and jewellery dominate the Indian export basket to the UAE. The main exports to Kuwait are cereals, while iron and steel are the main metals of export to Bahrain. Exports to Qatar are dominated by the ship and floating structure industry.

The fall in exports to GCC countries is directly related to the fall in crude oil prices. “Falling oil prices have had a sweeping impact on the oil producing economies of GCC, severely denting their oil revenues and spending by both governments and households,” explained the rating agency.

Lower exports and remittances have, however, been balanced out by a steep drop in imports from GCC countries. “In fiscal 2016, imports from these countries fell at a faster clip of 34.5 per cent,” Crisil noted.

“In fact, India’s trade deficit with the GCC has fallen a whopping $46 billion or 77 per cent in three years to $14 billion because of rapidly declining imports,” it said.

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