Trade deficit with Saudi Arabia at record high in FY23: CMIE data

The trade balance between India and Saudi Arabia is at its worst since at least the turn of the millennium.

India’s imports from Saudi Arabia was worth $31.3 billion more than its exports to the country. This is the largest gap since 1999-00, the earliest year for which data was available from the Centre for Monitoring Indian Economy (CMIE).

On Monday, Prime Minister Narendra Modi and Saudi Arabian Crown Prince Mohammed bin Salman held bilateral talks and reviewed trade ties on Monday. The duo also agreed to speed up the India-Gulf Cooperation Council (GCC) free trade agreement to further bolster economic ties, as well as an agreement on energy co-operation.

The trade deficit was $23 billion in 2018-19. Since 1999-2000, India recorded a surplus in six years from 2000-01 to 2005-06 (chart 1).

This has largely been driven by higher petroleum imports. Petroleum and petroleum products accounted for over $33 billion in imports. Interestingly, the share of petroleum and crude products declined from 90 per cent in 2009-10 to 78.9 per cent in 2022-23.  The share of manufactured goods increased from 9 per cent to 20.9 per cent (chart 2).

India’s own exports have also seen a greater role for manufactured goods. Their share in total exports has increased over the years. In 2022-23, it accounted for 59.9 per cent of the total compared to 45.9 per cent in 2009-10.

A total of $6.4 billion manufactured goods were exported in 2022-23. On the other hand, the share of agriculture and allied products declined from 27.2 per cent in 2009-10 to 20.4 per cent in 2022-23 (chart 3).