India’s exports to Gulf Cooperation Council (GCC) countries rebounded to near pre-war levels in May, led by a sharp recovery in shipments to the United Arab Emirates (UAE). However, the rebound appears to have been driven largely by a handful of high-value, volatile commodities rather than a broad-based recovery in regional demand.
Exports to the GCC rose 30.8 percent month-on-month to $4.55 billion in May, recovering from sharp declines triggered by the conflict in West Asia. While shipments were down just 0.75 percent from a year earlier, they increased by about $1.07 billion compared with April.
Overall, exports to the GCC fell 4.3 percent year-on-year in February, plunged 57.6 percent in March and remained more than 30 percent lower in April as tensions in West Asia disrupted trade. Before the conflict escalated, exports had risen 15.9 percent year-on-year to $5.68 billion in January.
The GCC is a regional economic and political bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
The biggest contributor to the recovery was exports of ships, boats and floating structures, which surged to $833.52 million in May. The increase was driven overwhelmingly by the UAE, where shipments jumped to $825.9 million from $125.9 million in April, an increase of more than $700 million in a single month.
A trade analyst said shipbuilding exports are often influenced by delivery schedules, flag transfers and project-based accounting, meaning the delivery of a single vessel can significantly inflate monthly trade data. The analyst said the sharp increase could therefore reflect a one-off shipment or timing effect rather than sustained growth in India’s shipbuilding exports.
Gold was the second-largest contributor to the recovery after exports of the precious metal had virtually disappeared in April. Gold exports to the Gulf stood at $137.8 million in May, with almost the entire amount destined for the UAE.
India’s exports to the UAE increased by $880 million month-on-month, rising to $3.06 billion in May from $2.18 billion in April.
Together, ships and gold contributed roughly $838 million to the increase in India’s exports to the UAE between April and May. Smaller gains were also recorded in exports of iron and steel and zinc.
On a year-on-year basis, exports of ships to the UAE surged 412 percent to $825.9 million in May from $161.4 million a year earlier, making them India’s largest export item to the country during the month. Gold exports also rebounded sharply from near-zero levels.
Elsewhere in the Gulf, export performance remained more subdued. Exports to Saudi Arabia continued to be led by petroleum products, telecom instruments, engineering goods and machinery, while shipments to Oman were driven by petroleum products, iron and steel, machinery, motor vehicles and rice.
