Workers walk past containers at a depot on Willingdon Island in the southern Indian city of Kochi. File/Reuters
Indian exports to GCC grew by 44 per cent in the financial year 2021-22 (FY 2021-22) to $43.9 billion compared to last fiscal’s $27.8 billion with the UAE leading the trade with 68 per cent growth, valued at $28 billion against $16.7 billion in 2021, the Federation of Indian Export Organisations (FIEO), the apex body of the country’s Export Promotion Councils said.
In a statement at the niche expo, Super Sourcing Dubai (SSD), co-located with Propaper Dubai 2022 taking place at Festival Arena, Dubai Festival City during Sept.20-22, top FIEO officials said paper and allied products exports to the GCC touched $638 million in 2021 with the UAE taking a major share in the trade at $386 million.
“Our exports performance in the GCC in financial year 2021-22 has been marvellous. Apart from the UAE, our exports to Saudi Arabia grew by 49 per cent, Oman by 33 per cent, Qatar by 43 per cent, Kuwait by 17 per cent and exports to Bahrain increased by 70 per cent,” said Dr. Ajay Sahai, Director-General and CEO of FIEO.
In the case of the paper industry, India has a 16 per cent market share in GCC and the target is to corner a 25 per cent market share by 2027 with the signing of Comprehensive Economic Partnership Agreement (CEPA) with other Gulf countries.
India and the UAE signed CEPA in February this year which came into force on May 1, 2022.
The cumulative demand for paper and allied products in the GCC market is estimated to be over $3.8 billion.
“We see a lot of opportunities for Indian companies post signing of CEPA with the UAE and are sure that participation in the SSD with such a large contingent, perhaps the biggest after Dubai Expo from India, will give a boost to our trade further,” Dr Sahai said, adding that the export prospects will further scale up since zero-duty access for Indian products to the UAE is expected to expand over 5-10 years to 97 percent of UAE tariff lines, or 99% of Indian exports by value.
SSD is an exclusive show for Indian Exporters to get connected with decision-makers in the supermarkets, hypermarkets, retail chains, buying agents and importers in the Middle East, GCC and African region
“FIEO has been aggressively pushing to enhance India’s exports to the GCC region.
In the current financial year, FIEO has planned various activities for the development of India’s export to the region, including exhibitions, B2B delegations, interactive sessions and capacity building programs,” said Dr. A Sakthivel, President of FIEO.
He said FIEO has already participated in exhibitions and trade activities in Qatar, Egypt, Jordan, Oman, UAE and Saudi Arabia and there are even more activities lined up in Bahrain, Kuwait, Iraq, Oman and the UAE.
The India-UAE CEPA is expected to lift merchandise trade to $ 100 billion by 2030. Further, the agreement will also open up opportunities for MSMEs and provide job opportunities to the tune of 1 million. India is the UAE’s second-largest trading partner and largest in terms of exports. Under the CEPA, around 90 per cent of the products exported and 80 per cent of lines of trade from India and to the UAE attract zero duty instantly.
Meanwhile India’s top lender State Bank of India has asked exporters to avoid settling deals with Bangladesh in the dollar and other major currencies as it looks to curb exposure to Dhaka’s falling reserves, according to an internal document and a source. Bangladesh’s $416-billion economy is battling rising prices of energy and food as the Russia-Ukraine conflict widens its current account deficit, and dwindling foreign exchange forces it to turn to global lenders such as the International Monetary Fund (IMF).
“The country is facing a shortage of foreign currency due to higher import bills and weaknesses of Bangladeshi taka against dollar in recent times,” the SBI said in an Aug. 24 letter sent to its branches and seen by Reuters.
The letter and its contents have not previously been reported.
The SBI did not immediately respond to an e-mail seeking comment.
The decision not to increase exposure to the dollar and other foreign currencies in relation to Bangladesh stemmed from the current economic situation and the neighbouring nation’s shortage of foreign currency, the bank said in its circular.
“However exposure in Indian rupee (INR) and taka will continue,” it added.
Bangladesh’s foreign exchange reserves declined to $37 billion by Friday from $48 billion a year earlier, according to data from the central bank, which provides import cover of just five months.
Finance ministry officials have said Bangladesh is seeking a $4.5 billion loan from the IMF, in excess of its maximum entitlement of $1 billion under the IMF Resilience and Sustainability Trust.
A source familiar with the matter said SBI did not want to increase its exposure to Bangladesh.
“We have an approximate exposure of $500 million to Bangladesh and have taken the decision not to grow it further aggressively, and maybe, even reduce it as needed, with the news surrounding the economy,” added the source, who spoke on condition of anonymity.”