Weak oil prices may hit remittances from Gulf nations: CRISIL
Continuing weakness in oil prices may impact remittances from Gulf countries into India, a report by domestic ratings agency Crisil said.
However, it added that low oil prices have reduced the country’s trade deficit with Gulf Cooperation Council (GCC) countries.
“The Gulf lost some charm for India last fiscal, both as a destination for exports and a source of remittances, but a hard look at the numbers suggests the situation isn’t as bad as it appears,” its research arm said in a note.
“While falling oil prices have curbed India’s exports to GCC, imports from the GCC have also fallen steeply. In FY16, imports from these countries fell at a faster clip of 34.5 per cent,” it said. Compared to this, the exports have declined 18.7 per cent, since petroleum accounts for a bulk of the exports, while the remittances from the region were also down 2.2 per cent to USD 35.9 billion as compared to the previous year.