Kuwait’s Polity

Kuwait was founded in the early 1700s after tribes from Central Arabia settled in the Bay of Kuwait City. The Al-Sabah family has been in power since 1756. Fearful that the Ottoman Empire would expand further south, Kuwait came under British protection in 1899. In 1961 Kuwait gained independence from Britain while Iraq pressed a territorial claim to the country. Iraq invaded and occupied Kuwait on August 2, 1990. On February 26, 1991 a US-led international coalition liberated Kuwait by ousting Iraqi troops.

Kuwait is hereditary Amirate with an elected National Assembly and relatively democratic style of governance. The Amir is the Head of State and appoints the Prime Minister who heads the Government. The Constitution provides for separation of powers among the Executive, Judiciary and Legislature. Unicameral National Assembly (Majlis Al-Umma) with 50 members elected for a four-year term.  Number of constituencies was reduced to 5 in July 2006. Ministers are not elected but sit as ex-officio MPs. The number of Ministers is fixed at 16 including the PM (⅓rd the strength of the House). One MP has to be included in the Council of Ministers.

To complete National Assembly quorum, at least one Cabinet Minister has to attend session.

Following the demise of the 13th Amir Sheikh Jaber AI-Ahmad Al-Jaber Al-Sabah in January 2006, the Kuwaiti cabinet announced the appointment of the Crown Prince Sheikh Saad Al-Abdullah Al-Salem Al-Sabah as the 14th Amir of Kuwait.   However, due to his ill health, then Prime Minister Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah was appointed the 15th Amir of Kuwait. The Amir appointed Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah as the new Crown Prince and Sheikh Nasser Al-Mohammad Al-Ahmad Al-Sabah as the new Prime Minister on February 7, 2006.

The last elections (12th) to the 50-member National Assembly (Parliament) of Kuwait were held on May 17, 2008 following which, the Government of Prime Minister Sheikh Nasser Al-Mohammed Al-Ahmed Al-Sabah was reappointed to office.  The new Cabinet comprises 16 Ministers including the Prime Minister with 7 new appointees.

India-Kuwait Relations

India and Kuwait enjoy traditionally friendly relations.  These are based in history and have stood the test of time. Geographic proximity, historical trade links, cultural affinities and presence of a large number of Indian expatriates continue to sustain and nurture this long standing relationship.  India has been a natural trading partner and a destination for higher learning.  Until 1961, the Indian Rupee was legal tender in Kuwait. 

            High level visits from Kuwait to India have included those by the His Highness Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, Amir of the State of Kuwait from June 14-19, 2006 accompanied by senior Ministers and officials.  The Amir held talks with the President, the Vice President and the Prime Minister of India.  In New Delhi the Amir addressed a luncheon meeting of representatives of apex Indian Chambers of Commerce and Industry ASSOCHAM, CII and FICCI.  In Mumbai, the Amir met the Governor of Maharashtra and addressed a meeting organised by CII.

  Three Agreements were concluded during the visit.  These included a Avoidance of Double Taxation Agreement and for the Prevention of Fiscal Evasion with respect to Taxes on Income (DTAA); an Agreement on Drug Demand Reduction and Prevention of Illicit Trafficking in Narcotic Drugs, Psychotropic Substances and Percursor Chemicals and Related Matters; and an Executive Programme for the Cultural and Information Exchanges between India and Kuwait for the years 2006 – 2008.

The Foreign Minister Sheikh Mohammed visited India in August 2004.  During the visit to India, three bilateral agreements were signed in addition to the Indo-GCC Framework Agreement for Economic Cooperation.  There has been regular exchange of visits at Ministerial level. Visit to India includes those of Dr. Ismael Khudhur Shatti, then Minister of Communications on June 28, 2006 and Engr. Falah Fahed Mohammad Al-Hajri, Minister of Commerce and Industry to Bangalore to attend the CII Partnership Summit in Bangalore on January 17-19, 2007.

From India, visits have included those of Minister of State for External Affairs Mr. E. Ahamed on April 16-17, 2006 on a bilateral visit; on October 16, 2006 for meetings with the Kuwaiti leadership; on November 26-27, 2006 to co-Chair the first meeting of the Kuwait-India Joint Ministerial Commission; on March 10, 2006 to canvas for India’s bid to host the 17th Asian Games in Delhi in 2014; from January 29-31, 2008; and on May 15, 2008 to convey condolences on the demise of the Father Amir His Highness Sheikh Saad Al-Abdullah Al-Salem Al-Sabah on behalf of Government of India to the Royal Family and the people of Kuwait.

India and Kuwait both share common perceptions on various regional and international issues and have cooperated with each other in regional and international fora.  There have been several high level discussions and consultations at political and senior diplomatic levels as well as exchange of visits between the two countries.

India and Kuwait have signed various Agreements to provide a framework for the development of bilateral relations.  These include:

Total bilateral trade between India and Kuwait grew by 65% from Rs. 431,503.46 lakhs (US$ 974.63 million) in FY 2005-06 to Rs. 713,484.46 lakhs (US$ 1.57 billion) in FY 2006-07.

India’s Exports to Kuwait

India’s exports grew by 33.15% from Indian Rupees 227,428.27 lakhs (US$ 513.69 million) in 2005-06 to Indian Rupees 302,818.46 lakhs (US$ 669.22) in 2006-07.

Above is a pie-chart showing the share of top 10 items of

India’s Imports from Kuwait

Joint Ministerial Commission

An “Agreement between India and Kuwait for the promotion of Economic, Commercial and Technical Cooperation” was signed in Kuwait in February 1992 during the visit of then EAM Shri Madhavsinh Solanki.  At the same time both sides also agreed to set up an “Indo-Kuwait Joint Ministerial Commission on Economic and Technical Cooperation”.  During the visit of the Amir to India in June 2006, it was decided that the Joint Commission for Economic and Commercial Cooperation would hold its first meeting in the last quarter of 2006. 

Accordingly, the first meeting of the India-Kuwait Joint Ministerial Commission for Trade and Economic Cooperation took place in Kuwait on November 25-27, 2006.  The meeting was co-chaired by Mr. E. Ahamed, Minister of State for External Affairs on the Indian side and Mr. Bader Meshari Al-Homeidhi, Finance Minister from the Kuwaiti side.  Discussions were held in four Working Groups dealing with Labour and Employment; Trade, Investment and Finance; Energy, Petroleum, Petrochemicals and Fertilisers; and Science & Technology,Information Technology and Communications, Health and Education.

The second meeting of the India-Kuwait Joint Ministerial Commission was held in New Delhi on July 1-3, 2008. It was co-chaired by Mr. E. Ahamed, Minister of State for External Affairs from India and His Excellency Mr. Mustafa Jassim Al-Shamali, Minister of Finance from Kuwait. Among the notable decisions of the JMC include forming of a Joint Working Group (JWG) on Hydrocarbons whose first meeting would take place in last quarter of 2008.

Both sides also agreed to set up a technical level mechanism to review the implementation of the decisions arrived at the Joint Ministerial Commission Meeting which will meet in the interim periods in each other’s capitals. The first such meeting will be held in the first quarter of 2009 in Kuwait City.

Kuwait is among the largest supplier of crude oil to India and the second largest supplier from the Gulf region. Crude oil imports in 2006-07 by India from Kuwait were 11.38 mmt which went up to 12.6 mmt valued at around US$ 6.7 billion.

Bilateral MOUs in the Economic Field

• MoU between the Public Authority for Industry (PAI) of Kuwait and Indian Importers Association (IIA) based in New Delhi in May 2006 wherein IIA will promote the export, re-export and sales of Kuwaiti manufactured non-oil industrial products in its appointed territory for the Kuwaiti manufacturers introduced to it by PAI.

Indian Companies’ Presence in Kuwait

Kuwaiti Investment in India

According to the figures released by the Department of Industrial Promotion & Policy’s Secretariat for Industrial Assistance (SIA), Kuwaiti investment in India has been modest or may be said to be negligible. 

Much of the Kuwaiti investments, however, have gone into India through portfolio management.  Kuwaiti FDI has also gone into India through international investment companies or through countries providing tax breaks. This may now change with the implementation of Double Taxation Avoidance Agreement between the two countries effective April 1, 2008.
           
Following the visit to India by His Highness the Amir of the State of Kuwait, there has been considerable interest in the Indian market. The Kuwait Investment Authority (KIA) and some others have shown interest in sectors dealing with infrastructure, power, financial services, real estate, and information technology among others. 

The Kuwait Petroleum Company (KPC) through its international arm, the Kuwait Petroleum International (KPI) has also expressed interest in investment in the petrochemical sector. 

Until December 1997, the Kuwait Fund for Arab Economic Development (KFAED) has extended concessional loans to India for 8 projects in various sectors (Industry – 2 projects totaling Rs. 3.10 billion; Power – 5 projects totaling Rs. 6.71 billion and Agriculture – 1 project amounting to Rs. 0.80 billion) to the extent of KD. 88.854 million (Rs. 10.61 billion).

The updated figures of total loan advanced upto December 31, 2002 were US $ 270.17 Million working out to a little over Rs. 12.97 billion at the current rate of exchange.  However, due to the change in policy in 2003-04, the loans from KFAED were discontinued and repaid.

India Funds

Authentic and complete information regarding investments made in Indian equities by Foreign Institutional Investors (FIIs) from Kuwait is not available.

The Kuwait Investment Authority has made regular portfolio

Civil Aviation

Following the last round of talks between civil aviation delegations of India and Kuwait held in Kuwait on June 28 – 30, 2007, an MoU was signed with both sides reaffirming their commitment to the Air Services Agreement governing civil aviation relations. Both sides also agreed to increase capacity entitlements of each side from 8,320 to 12,000 seats per week. The designated carriers of Kuwait were granted access to 3 additional points of call in India viz. Hyderabad and Kolkata with immediate effect and Bangalore with effect from the winter 2008 schedule. Both sides reached a common understanding that increases in future traffic rights and

capacity entitlements would be used to serve only the direct India-Kuwait market and not indirect markets to/from third countries through 5th freedom rights.

Culture, Science & Technology and Education

Indian Community

According to the Kuwaiti Ministry of Interior, there are 579,058 Indians as on July 1, 2008 who constitute the largest expatriate community in Kuwait. The Indian community is regarded by the Kuwaitis as the community of first preference among the expatriates in Kuwait.  Kuwait recognizes India’s capabilities as a fast growing economy and also a source of highly qualified professional and technical personnel. 
Of late, there has been an increase in the number of highly qualified experts in hi-tech areas, especially in the software and financial sector. In the field of health, India not only supplies top specialists but also para-medical staff who enjoy a high reputation. Inwardremittances from Kuwait to India are substantial.

Professionals like engineers, doctors, chartered accountants, scientists, software experts, management consultants,

architects, skilled workers like technicians and nurses, semi-skilled workers, retail traders and businessmen mainly constitute the Indian community. A large proportion of the Indian expatriates are also unskilled and semi-skilled workers.   

The MoU on Labour, Employment and Manpower Development signed in April 2007 has been ratified by both countries and has entered into force with effect from October 18, 2007. 

There are 17 Indian Schools in Kuwait affiliated to the Central Board of Secondary Education.