Brief on India-Kuwait Trade and Economic Relation

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Bilateral Brief on India-Kuwait Economic and Commercial Relations

OVERVIEW

. India and Kuwait enjoy traditionally friendly relations which are rooted in history and have stood the test of time. Geographic proximity, historical trade links, cultural affinities and presence of large number of Indian nationals in Kuwait continue to sustain and nurture this long-standing relationship. India has been a natural trading partner of Kuwait and until 1961 Indian Rupee was the legal tender in Kuwait. Till the discovery and development of oil, Kuwait’s economy revolved around its fine harbor and maritime activities which included ship building, pearl diving, fishing and voyages to India on wooden dhows carrying dates, Arabian horses and pearls that were traded for wood, cereals, clothing and spices.

Kuwait is a petroleum-based economy, with estimated crude oil reserves of 101.5 billion barrels (about 6% of world reserves), and proven natural gas reserves of 1,784 billion cubic meters (about 63 trillion cubic feet) (source: latest OPEC data). Oil revenues constitute the main source of income and amount to approximately 94% of the state’s revenues. (Central Statistical Bureau, State of Kuwait). Kuwait offers an open, competitive and affluent market for consumer goods and project exports, the 4th largest amongst the GCC countries after the UAE, Saudi Arabia, and Qatar. The country has a Sovereign Wealth Fund (SWF) of over US$ 900 billion, which is managed by the Kuwait Investment Authority (KIA).
Historically, India-Kuwait relations have always had an important trade dimension. India has consistently been among the top trading partners of Kuwait. Total bilateral trade with Kuwait during 2023-24 was US$ 10.479 billion, with Indian exports to Kuwait amounting to USD 2.1 billion, displaying a growth of 34.78% YOY. Kuwait remains a reliable supplier of crude oil & LPG to India, meeting our crucial energy needs. During FY 2023-24, Kuwait was the 6th largest crude supplier to India and it met about 3% of India’s total energy needs.

The trend of bilateral trade during the years FY 2019-20 to FY 2023-24 is as follows:
Values in US$ million

Year	FY 2019-20	FY 2020 -21	FY 2021 -22	FY 2022 -23	FY 2023-24
INDIA’S EXPORT TO KUWAIT	1,286.56	1,054.20	1,241.93	1,560.45	2,103.22
INDIA’S IMPORT FROM KUWAIT	9,573.80	5,214.15	11,001.76	12,247.37	8,375.97
TOTAL TRADE	10,860.36	6,268.34	12,243.68	13,807.82	10,479.19

(Source: M/o Commerce & Industry, India)

 

India’s top Exports to Kuwait in last 3 years
Values in US$ million

S. no	Commodity	FY 2021 -22	FY 2022 -23	FY 2023-24
	Total	1,241.93	1,560.45	2,103.22
1.	Aircraft, spacecraft, and parts	0.14	0.68	508.61
2.	Cereals	143.6	176.1	219.42
3.	Organic chemicals	99.45	147.47	141.53
4.	Vehicles other than railway	48.32	92.77	110.22
5.	Electrical machinery and equipment	98.86	138.53	109.33
6.	Ceramic products	70.97	88.07	94.11
7.	Jewellery – gold, precious metal, precious stones	65.38	65.23	92.5
8.	Machinery and mechanical appliances; parts thereof	68.45	85.34	89.51
9.	Articles of iron or steel	41.06	62.78	59.71
10.	Coffee, tea, mate and spices	48.62	52.71	58.62

Source: Department of Commerce, M/o Commerce & Industry, GOI

 

India’s top imports from Kuwait in last 3 years
Values in US$ million

S.no	Commodity	FY 2021 -22	FY 2022 -23	FY 2023-24
	Total	11,001.76	12,247.37	8,375.97
1.	Mineral fuels, mineral oils and products	9,923.08	10,642.40	6,220.63
2.	Aircraft, spacecraft, and parts thereof	0.03	263.53	845.18
3.	Organic chemicals	623.96	759.19	826.54
4.	Plastic and articles	52.91	133.71	106.66
5.	Iron and steel	58.09	108.11	91.75
6.	Copper and articles	105.91	74.13	72.7
7.	Aluminium and articles	87.75	73.77	71.58
8.	Jewellery – gold, precious metal, precious stones	1.86	80.96	40.26
9.	Electrical machinery and equipment	19.28	18.41	22.81
10.	Earths and stone; plastering materials	45.48	23.05	18.45

Source: Department of Commerce, M/o Commerce & Industry, GOI
INDIAN PUBLIC SECTOR UNDERTAKINGS IN KUWAIT
Telecommunications Consultants India Limited (TCIL) has significant presence in Kuwait since 1980.  TCIL is one of the key contractors for the Ministry of Communication, as well as other Ministries, Departments, and Oil & Gas Companies.
Insurance PSUs
LIC International started operations in Kuwait in 1996.
New India Assurance Company has been present in Kuwait since 1953 and provides insurance solutions for Motor Vehicles, Commercial Properties, House & Contents as well as Construction & Engineering Insurance, Employer’s Liability, Carrier’s Liability and Public Liability etc.
Oriental Insurance Company began operations in Kuwait in 1959, and offers Motor, Marine and General insurance covers for Personal and Corporate clients.

INDIAN PRIVATE SECTOR COMPANIES IN KUWAIT
Major Indian companies having presence in Kuwait include EPCs such as Larsen & Toubro (L&T), Shapoorji Pallonji, Kalpataru Power Transmission Ltd, Afcons, KEC International, as well as IT/ITES firms including Tata Consultancy Service (TCS) and Tech Mahindra. Indian EPCs have been executing projects in various sectors in Kuwait. Notable Indian companies and brands in Kuwait include:

Larsen & Toubro Limited	Essar Projects Limited
Afcons Infrastructure Ltd	Shapoorji Pallonji
Kalpataru Project International Ltd	MEIL -Megha Engineering India Ltd.
KEC International	TATA Consultancy Services (TCS)
Tech Mahindra	TATA Motors – Jaguar and Land Rover (Zayani)
EICHER Motors Ltd. (KAICO)	Himalaya (Medical & FMCG)
Ashok Leyland (Al-Sayer)	HeroMotocorp, Bajaj and TVS motorcycles
Forest Essentials (Apparel Group)	Kalyan Jewellers
Joyalukkas	Malabar Gold & Diamonds
Air India & Air India Express	Indigo Air
Akasa Air

AVAILABILITY OF INDIAN BRANDS IN KUWAIT
Several Prominent Indian brands have presence in Kuwait. Few of them are summarized below:

• Food Products: Dawat, IndiaGate, Country XL, Amul, Eastern, Everest, MTR, Brittania, 24 Mantra, Gits, Haldirams, Bikano, Parle, Tata Tea, Kanan Devan, etc
• FMCG: Himalaya, Dabur, Lakme, Forest Essentials, Mysore Sandal, Santoor, Medimix etc
• Electrical Appliances: Godrej Security Solutions, Godrej Interio, Havells, Finolex, Titan Watches, etc.
• Automobiles & allied products: Royal Enfield, Eicher Buses and Trucks, TATA Buses and Trucks, Ashok Leyland Buses and Trucks, Mahindra pick-ups, Force Mini Buses, Amaron Batteries, Servo Oil
• Tyres: Ceat, TVS, Apollo, MRF, JK
• Home appliances & Products: Onida, Kenstar, Videocon, VIP Luggage, ELGI, Kent, Butterfly, Pigeon, LaOpala, Kent RO, Syska LED

 

KUWAITI BUSINESSES AND THEIR INVESTMENTS IN INDIA
Kuwaiti presence in India includes those by Alghanim Industries; Asiya Investments, National Aviation Services (NAS); Agility Logistics, NBTC Kuwait (KGA Hotels & Resorts Pvt. Ltd), NAPESCO, Boutiqaat etc. among others.

AGREEMENTS AND JOINT WORKING GROUPS BETWEEN INDIA AND KUWAIT IN THE ECONOMIC FIELD

• Trade Agreement signed in February 1974.
• Cooperation Agreement for the Promotion of Economic, Commercial and Technical Cooperation signed in February 1992.
• Agreement for Encouragement and Reciprocal Protection of Investment signed in November 2001 and ratified in June 2003.
• Agreement on Juridical and Judicial Cooperation in Civil and Commercial Matters signed in August 2005 and ratification process completed in June 2009.
• 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 and ratification process was completed in July 2012.
• MOU on Labour, Employment and Manpower Development signed in April 2007.
• 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 signed in June 2006.
• Agreement on Scientific and Technological Cooperation signed in April 2009.
• A Joint Working Group on the Hydrocarbons Sector was set up and its first meeting was held in Kuwait in December 2009. The 6th meeting of India-Kuwait JWG on Hydrocarbon was held on 31 July 2023 virtually.
• MOU on Medical Cooperation signed in April 2012. A Joint Working Group on Medical Cooperation was set up and its first meeting was held in Kuwait in November 2013. 2nd meeting of India-Kuwait JWG on Medical Cooperation was held on 31 August, 2021 virtually.
• MOU on Youth Affairs and Sports signed in November 2013.
• MOU between CSIR and KISR on S&T cooperation signed in November 2013.
• MOU between KISR and Earth Systems Science Organization, Ministry of Earth Sciences on cooperation in S&T signed on 16 October 2014.
• MOU between KISR and Indian Space Research Organization for Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes on 21 August 2015.
• The Protocol amending the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income between India and Kuwait, on 15 January 2017

TRADE & INVESTMENT PROMOTION EVENTS ORGANIZED BY THE EMBASSY OF INDIA, KUWAIT – FY 2023-24

Visits of Indian Business delegations for the last 2 years

• Delegations from the International Financial Services Centres Authority (IFSCA) – GIFT City, National Investment and Infrastructure Fund (NIIF), Invest India and the Confederation of Indian Industry (CII) visited Kuwait to participate in the India-Kuwait Investment Conference 2.0 organized by the Embassy at Hotel Four Seasons, Kuwait.
• Dr. Ashwin Fernandes, Executive Director at QS World University Rankings and Dr. Ramakrishna Raman, Vice Chancellor of Symbiosis International University, Pune visited Kuwait to participate in a Seminar on ‘India’s Higher Education Landscape’ organized at Embassy of India, Kuwait on 14 February 2023.
• A NASSCOM delegation visited Kuwait for “India-Kuwait Information Technology Conference” on 23 October 2023.  The event included a panel discussion, presentations and IT videos, and a B2B session was also conducted.
• A 2-member delegation from the international arm of National Payments Corporation of India (NPCI), viz NIPL (NPCI International Payments Limited), visited Kuwait from 1 to 3 August 2023.
• A 2-member delegation from MAX Healthcare, India arrived in Kuwait on 29 May 2023 and held meetings with various stakeholders in the Medical and Healthcare fields.
• A delegation comprising of high-ranking officials from the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India as well as the National Investment and Infrastructure Fund (NIIF), Confederation of Indian Industry (CII) and Invest India travelled to Kuwait to participate in the India Kuwait Investment Conference titled “UNLEASHING SYNERGIES” on 08 May 2023.
• A Multi-Product delegation from the Federation of Indian Export Organisations (FIEO) visited Kuwait from 16 to 19 October 2022.
• An Indian delegation from the Food & Beverage sector was mobilized by the Federation of Indian Chambers of Commerce & Industry (FICCI) to Kuwait from July 2 to 5, 2022.

 

BUSINESS ACTIVITIES OF INDIAN COMMUNITY IN KUWAIT

The Indian community with a strength of about 1 million is the largest expatriate community in Kuwait and is regarded as the community of first preference among the expatriate communities. Though a large proportion consists of unskilled and semi-skilled workers, professionals such as engineers, doctors, chartered accountants, scientists, software experts, management consultants, architects; technicians and nurses; retail traders and businessmen are present in sizable numbers in Kuwait.
The Indian Business Community in Kuwait has carved a niche in the Kuwaiti market in services, retail marketing as well as distribution. Many of the business houses have been present in Kuwait for three to four generations.
The Indian Business and Professional Council (IBPC) is an association of about 200 businessmen/ professionals in Kuwait who are actively involved in promoting India-Kuwait business relations.
Presence of NRI-owned retail outlets such as Lulu Hypermarket (Lulu International) and CentrePoint (Landmark Group), as well as large NRI owned distributor companies have contributed to a growing range of Indian products in Kuwait and has helped meet the requirements of the large Indian community in Kuwait.
Apart from these, a large number of Indians co-partner/have a significance presence at managerial-level in small and medium-scale enterprises. Many Indian goods and products are available in the local market, some are directly imported from India and some find their way into the Kuwaiti market via Dubai, UAE.

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