India and Six Gulf Nations Prepare to Initiate Free Trade Agreement Discussions

NEW DELHI: In a significant move to strengthen economic ties, India has signed the terms of reference (ToR) for negotiations with the Gulf Cooperation Council (GCC) aimed at establishing a free trade agreement (FTA). This agreement marks a crucial step as India seeks to enhance its trade relations with the GCC, which consists of six member states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The GCC is already a vital trading partner for India, accounting for a substantial portion of its global trade.

Details of the Agreement

The ToR outlines the framework for negotiations regarding the proposed FTA, detailing the scope, structure, and modalities of the discussions. India has previously established comprehensive economic agreements with the UAE and Oman, with the latter set to be implemented in the coming months. The GCC is a key player in India’s trade landscape, with exports nearing $57 billion and imports around $122 billion, representing over 15% of India’s total global trade. Over the past five years, trade with the GCC has experienced an impressive average annual growth rate of approximately 15%.

Opportunities for Growth

Commerce and Industry Minister Piyush Goyal emphasized that the new agreement will further strengthen existing ties and create opportunities across various sectors, including food processing, infrastructure, petrochemicals, information and communication technology (ICT), and services. A significant aspect of the negotiations will likely involve discussions on visa provisions for Indian workers and professionals, as well as investment opportunities. The bilateral trade deal with the UAE has already provided a substantial boost to trade between the two nations.

Global Context and Future Prospects

GCC chief negotiator Raja Al Marzouqi highlighted the importance of this agreement amid global economic uncertainties, stating that enhanced cooperation is essential to mitigate risks facing the global economy. Ajay Bhadoo, the additional secretary in the commerce ministry, will serve as India’s chief negotiator in these discussions. Goyal noted that the proposed trade treaty with the GCC is part of a broader strategy to build on recent FTAs with countries ranging from New Zealand to the UK, EU, and the US, with additional agreements with nations like Chile and Canada also in progress.

Reviving Previous Negotiations

The FTA discussions between India and the GCC had previously been suspended, but the momentum was reignited following India’s successful agreement with the UAE. However, the negotiations faced delays as not all GCC member countries were in agreement. Goyal expressed optimism that eliminating duties and non-tariff barriers could significantly enhance exports in agriculture and fisheries, bolster energy and food security, attract more investments, and create job opportunities in both regions.

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