174
would be discussed, the Kingdom continued to be the largest supplier of
oil to India and the quantity of fuel (Table 9.3) imports from the Kingdom
remained stable. While the trade figures grew substantially, the quantum
of oil imports only changed marginally; in 1991–92 India imported
US$800 million worth of crude oil from the Kingdom and this reached
US$14 billion in 2016–17. This is reflected in the Saudi share in India’s
overall foreign trade; it stood at 3.2 per cent in 1991–92 and rose to 3.8
per cent in 2016–17 (Fig. 9.3). Thus, the fluctuations in the trade figures
have been primarily the result of changes in oil prices discussed in the next
section. For Saudi Arabia, India is the fifth largest export market, account-
ing for about 8 per cent of its total global trade, while India ranks ninth in
terms of Saudi imports, making up 4 per cent of the total goods imported
by the Kingdom (WITS 2015 ).
At the same time, the balance of trade is skewed in favour of the
Kingdom owing to India’s oil imports, which form the bulk of the bilat-
eral trade. As of 2016–17, Saudi Arabia is the 14th largest market for
Indian goods and account for 1.8 per cent of its global exports and is the
source of 6 per cent of imports into India. In 2016–17, India’s imports
from Saudi Arabia stood at US$19.5 billion while its exports were at
US$5.13 billion or a third of its imports. Major Indian imports comprise
of crude oil, organic chemicals, fertilizers, dry fruits, nuts and pearls. On
the other hand, India’s exports mainly consist of cereals, building materi-
als, edible oil, animal and dairy products, sugar, vegetables, coffee, tea and
spices. It must be remembered that a significant portion of these products
are meant for the consumption of the Indian expatriate community who
are more comfortable or used to household and food items they are accus-
tomed to in their home states. After reaching a high of 6.36 per cent in
2013–14, India’s exports to the Kingdom have also declined. If the low oil
price is directly responsible for declining imports, it had a cascading impact
upon India’s exports to Saudi Arabia.
The two-way flow of investments plays a small but significant role in
shaping the bilateral trade. When harnessed properly this would be the
game-changer in the bilateral relations and make a multifaceted one.
While visiting the Kingdom in April 2008, the then Foreign Minister
Pranab Mukherjee indicated that India’s infrastructure projects would
require and “can absorb US$500–600 billion” in the coming decades
(India, MEA 2008 ). In the words of one observer, “unlike being a
buyer- seller relationship, India is now looking at making investments”
(Aneja 2008 ).
P. R. KUMARASWAMY AND MD. M. QUAMAR