INDIA-KUWAIT
1. Context
India and Kuwait on Sunday signed a memorandum of understanding (MoU) on defence cooperation that will allow for exchange of defence personnel, joint exercises, and supply of military equipment.
2. India and Kuwait relations
- India and Kuwait share historically close and enduring relations, strengthened by geographical proximity, historical trade connections, cultural ties, and the significant Indian community in Kuwait.
- These bonds have been nurtured over time, with India serving as a natural trading partner. Notably, until 1961, the Indian Rupee was Kuwait's legal tender. Before the discovery of oil, Kuwait's economy was centered around its strategic harbor and maritime activities, including shipbuilding, pearl diving, fishing, and trade with India via wooden dhows carrying dates, Arabian horses, and pearls in exchange for wood, cereals, textiles, and spices.
- Kuwait's economy today is dominated by petroleum, with crude oil reserves of 101.5 billion barrels (around 6% of global reserves) and proven natural gas reserves of 1,784 billion cubic meters (63 trillion cubic feet) (source: OPEC).
- Oil revenues account for approximately 94% of Kuwait's state income .
- The country offers a wealthy and competitive market for consumer goods and project exports, ranking as the 4th largest market among GCC nations after the UAE, Saudi Arabia, and Qatar. Kuwait also boasts a Sovereign Wealth Fund (SWF) of around USD 1 trillion, managed by the Kuwait Investment Authority (KIA).
- Trade has been a key element of India-Kuwait relations. India is one of Kuwait's leading trading partners, with bilateral trade totaling USD 10.479 billion during 2023-24.
- Indian exports to Kuwait reached USD 2.1 billion, reflecting a year-on-year growth of 34.78%. Kuwait remains a dependable supplier of crude oil and LPG to India, meeting approximately 3.5% of the country's total energy needs.
- In FY 2023-24, Kuwait was India's 6th largest crude oil supplier and 4th largest petroleum gas provider
3. Indian Community in Kuwait
- India and Kuwait share historically strong and friendly relations, with the Indian diaspora serving as a vital link between the two nations. Historically, India was a key trading partner for Kuwait, and the Indian Rupee remained the country’s legal tender until 1961.
- Today, Kuwait heavily relies on the Indian workforce, with approximately one million Indians constituting 21% of Kuwait's total population and 30% of its workforce, making them the largest expatriate community in the country.
- In the 19th and early 20th centuries, Kuwait thrived as a small trading port, primarily engaged in maritime trade with the Indian subcontinent through ports like Karachi, Mumbai, and Cochin.
- Kuwaiti merchants transported goods such as Arabian horses, dates, and pearls to India on wooden dhows and returned with timber, spices, and textiles. This flourishing trade also attracted Indian traders, who became involved in various businesses, including textiles, spices, and food products.
- Kuwait’s economic boom during the 1970s and 1980s, fueled by its oil reserves, spurred rapid infrastructure development. The Indian community played a crucial role during this period, with many professionals and skilled workers contributing significantly to the oil, gas, and construction sectors.
- However, the Gulf War of 1990-1991 caused a mass exodus of Indians, including a large-scale evacuation by the Government of India, which airlifted over 1.7 lakh Indians from Jordan. Post-liberation, most of the Indian community returned to Kuwait, eventually becoming the largest expatriate group in the country.
- According to the Public Authority for Civil Information (PACI) of Kuwait, as of December 2023, Kuwait’s population stood at 4.859 million, with 3.3 million expatriates.
- Indian workers represent a substantial portion of the workforce, particularly in the private and domestic sectors.
- The Indian medical community in Kuwait is particularly noteworthy, comprising approximately 1,000 doctors, 500 dentists, and 24,000 nurses, who are highly regarded for their professionalism and compassion.
- The Indian community is valued for its hard work, trustworthiness, and non-interfering nature. Indian professionals, including businessmen, entrepreneurs, and medical and engineering experts, hold esteemed positions in Kuwait. Strong cultural and social ties with India are maintained through over 200 registered Indian associations that organize cultural events and humanitarian initiatives.
- Kuwait also hosts 26 CBSE-affiliated schools, catering to more than 60,000 students, primarily Indians. However, there are relatively few Indian students pursuing higher education in Kuwait and few Kuwaitis studying in Indian universities.
- The Indian community remains a preferred group in Kuwait, contributing significantly to the country's development while preserving their cultural heritage
4. Bilateral relations
- India and Kuwait share a longstanding relationship rooted in deep cultural ties and mutual exchanges. To commemorate the 60th anniversary of diplomatic relations in 2021-22, the Indian Embassy in Kuwait organized numerous events, including over 200 cultural programs.
- Notable events such as Splendors of India and Namaste Kuwait were hosted in 2022, while a Festival of India took place in March 2023 under the Ministry of Culture, India. Both countries have also agreed to a new Cultural Exchange Programme (CEP) to enhance bilateral cultural collaboration.
- With approximately one million members, the Indian community is the largest expatriate group in Kuwait and is highly regarded. It includes a diverse range of professionals such as engineers, doctors, chartered accountants, scientists, software specialists, management consultants, architects, technicians, and nurses.
- Many Indian workers also contribute significantly in unskilled and semi-skilled roles. The Indian business community has established a strong presence in Kuwait’s retail and distribution sectors, with some businesses operating for two to three generations.
- Notable entities like Lulu Hypermarket and other NRI-owned companies have significantly increased the availability of Indian products in the Kuwaiti market.
- Over 200 Indian associations registered with the Embassy actively organize cultural programs and charitable activities, fostering a sense of community and cultural cohesion
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India and Kuwait have signed several important bilateral agreements over the years, including:
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5. Way Forward
India-Kuwait relationship has been consistently strengthened through shared cultural ties, historical exchanges, and mutual cooperation across various sectors. The Indian community in Kuwait, which constitutes the largest expatriate group, plays a vital role in maintaining and fostering these strong bilateral ties. Over the years, both nations have signed numerous agreements that reflect their commitment to enhancing diplomatic, economic, and cultural collaboration. With ongoing initiatives like the Cultural Exchange Programme and a thriving Indian business community in Kuwait, the India-Kuwait partnership continues to grow and evolve, ensuring a strong foundation for future cooperation in diverse fields such as trade, technology, education, and human resource development
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For Prelims: India-Kuwait relations, Double Taxation Avoidance Agreement (2017)
For Mains: General Studies Paper II (Governance, Constitution, Polity, Social Justice and International relations)
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Source: The Hindu
