In a colossal diplomatic shock, four Gulf Countries including Kingdom of Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain cut relations with Qatar. Travel has been suspended and the borders are shut, cornering Qatar for supporting terrorism. While the impact of this severing ties is being discussed, it will have prospective impact on Indian economy.
The largest expatriate community of Indians are in Qatar, KSA and UAE two of which are now against Qatar. Around 6.5 lakh Indians are living in Qatar employed in various sectors. The democracy has strong ties with monarchy in defence and energy sectors.
Indian companies are working on large scale in the infrastructure field and even in IT sector in the country. Larsen & Toubro recently won 2.1 Billion Qatar Riyadh worth highway project. Doha Metro project worth 740 million dollars was given to this Indian firm. India has commercial ties with Qatar. In 2014-15 $ 15.67 Billion, worth business happened between the two countries while $ 9.93 Billion of bilateral trade in the 2015-16.
As much as 7.5 million metric tonnes of gas was imported last year which constitutes 65 percent of gas import in India. Petronet LNG has a contract to import 8.5 million tonnes of LNG annually from Qatar.
Almost 15% of exports from India go to Qatar. Since 2013-14 bilateral trade has been up-welling between two countries. While India imports oil and gas from Qatar, it exports iron, steel, plastic, construction materials, electrical and electronic goods, textiles, chemicals, precious stones, diamonds, rubber, legumes, spices and cereals.
India is 3rd largest exporter for Qatar and 10th position in imports. The Gulf countries by isolating Qatar will create economic crisis which will have impact on India. Chief minister of Kerala Pinarayi Vijayan has written to Prime Minister Narendra Modi and foreign Affairs Minister Sushma Swaraj urging to take effective steps to ensure safety of Indians as there are 3 lakh Keralites in Qatar. However, Swaraj said that India will not be impacted by some Gulf countries cutting off diplomatic ties with Qatar. Terming it as an “internal matter of GCC” she said that the government is trying to find out if any Indians are stuck in Qatar. Nonetheless, the balance of trade is currently skewed in Qatar’s favour.
