NEW DELHI: Amid a flurry of trade agreements with advanced economies, India on Thursday signed the terms of reference (ToR) for negotiations with the six-member Gulf Cooperation Council, marking a key step towards a proposed free trade agreement (FTA) with one of its largest trading partners.
The ToR outlines the scope, structure and modalities for the negotiations. India already has a comprehensive economic partnership agreement with the United Arab Emirates and has finalised a similar pact with Oman, which is expected to be implemented in the coming months.
The GCC, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, is a major trade and investment partner for India. India’s exports to the bloc are valued at nearly $57 billion, while imports stand at about $122 billion, together accounting for over 15% of India’s global trade. Trade with the GCC has grown at an average annual rate of around 15% over the past five years.
Commerce and Industry Minister Piyush Goyal said the proposed agreement would build on strong existing ties and open up opportunities in sectors such as food processing, infrastructure, petrochemicals, information and communication technology, and services. He added that issues related to visas for Indian professionals and workers, along with investment flows, are likely to be important elements of the negotiations.
India’s trade with the UAE has already received a significant boost following the bilateral agreement signed a few years ago, providing a model for wider engagement with the GCC.
GCC chief negotiator Raja Al Marzouqi said the move sends a strong signal at a time of global economic uncertainty. “It is important for us to cooperate more closely to reduce risks arising from global instability,” he said.
Ajay Bhadoo, additional secretary in the commerce ministry, will serve as India’s chief negotiator for the talks.
Goyal said the proposed pact with the GCC would build on India’s recent trade engagements with countries such as New Zealand, the United Kingdom, the European Union and the United States, while negotiations with Chile and Canada are also in the pipeline.
“In recent months, we have finalised FTAs covering more than 30 countries, all of which are complementary economies with India,” he said.
The minister added that removing tariff and non-tariff barriers could boost agricultural and fisheries exports, strengthen energy and food security, attract greater investment and generate employment in both regions.
India and the GCC had earlier initiated FTA talks, but the six-nation bloc suspended negotiations on all trade agreements a few years ago. The proposal gained renewed momentum after India’s deal with the UAE, though progress was delayed as not all GCC members were initially on board.
