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India and the Gulf Cooperation Council (GCC) have signed a Joint Statement formally launching negotiations for the proposed India–GCC Free Trade Agreement (FTA), following the previously agreed Terms of Reference. This marks a significant milestone in strengthening India–GCC economic and strategic relations.

About the India–GCC Free Trade Agreement (FTA)

Nature of the Agreement

The India–GCC FTA is a proposed comprehensive trade agreement between India and the six GCC member states:

• Saudi Arabia
• United Arab Emirates (UAE)
• Qatar
• Kuwait
• Oman
• Bahrain

It seeks to establish a structured framework for enhancing:

• Trade in goods
• Trade in services
• Investment flows
• Regulatory cooperation
• Market access

The agreement aims to reduce tariff and non-tariff barriers and facilitate smoother business operations between the two sides.

Economic Significance of India–GCC Trade

1. Major Trading Partner

• The GCC is India’s largest trading partner bloc.
• Accounts for 15.42% of India’s global trade.
• Bilateral trade in FY 2024–25:
  • Total Trade: USD 178.56 billion
  • Exports: USD 56.87 billion
  • Imports: USD 121.68 billion
• Trade has grown at an average annual rate of 15.3% over the past five years.

2. Sectoral Complementarity

Key Indian Exports to GCC:

• Engineering goods
• Rice
• Textiles
• Machinery
• Gems and jewellery

Key Indian Imports from GCC:

• Crude oil
• Liquefied Natural Gas (LNG)
• Petrochemicals
• Precious metals (especially gold)

The trade relationship reflects strong energy–manufacturing complementarity, with the GCC playing a critical role in India’s energy security.

3. Investment Linkages

• GCC countries have invested over USD 31.14 billion (cumulative FDI as of September 2025) in India.
• The FTA is expected to further:
  • Facilitate investment flows
  • Promote joint ventures
  • Enhance financial cooperation

4. Diaspora Dimension

• The GCC region hosts nearly 10 million Indians.
• The diaspora acts as a “living bridge”, strengthening:
  • Remittance flows
  • Cultural linkages
  • Business networks
  • Soft power presence

About the Gulf Cooperation Council (GCC)

• Established in 1981
• A regional political and economic alliance
• Members: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE
• Headquarters: Riyadh, Saudi Arabia

Background

The GCC was formed in response to regional instability, including:

• The Iranian Revolution (1979)
• The Iran–Iraq War (1980–1988)

Objectives

• Economic cooperation
• Security coordination
• Cultural and social integration

Organisational Structure

• Supreme Council (highest authority)
  • Composed of heads of member states
  • Presidency rotates among members