India, GCC to expedite process for formal resumption of free trade agreement negotiations

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India and the Gulf Cooperation Council have agreed to expedite conclusion of the requisite legal and technical requirements for the formal resumption of the negotiations for a free trade agreement, according to a statement released on November 25 by the commerce and industry ministry.

The FTA is envisaged to be a modern, comprehensive agreement with substantial coverage of goods and services, the ministry said on November 25.

“Both sides agreed to significantly expand and diversify the trade basket in line with the enormous potential that exists on account of the complementary business and economic ecosystems of India and the GCC,” according to the statement.

The GCC, which comprises Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Oman and Kuwait, is India’s largest trading partner bloc with bilateral trade in the fiscal year 2021-22 valued at over $154 billion. Bilateral trade in services between India and the GCC was at $14 billion in 2021-22. GCC-India trade talks had stalled in 2008.

Significantly, GCC countries contribute almost 35 percent of India’s oil imports and 70 percent of gas imports. Investments from the GCC in India are currently valued at over $18 billion, according to the commerce ministry.

India imports about 85% of its crude oil requirements. India also imports LPG and Natural gas to the extent of about 55% and 50% of their domestic consumption

India, which has shunned recent multilateral trade pacts, is rushing to stitch a bunch of free trade deals with several economies to help boost exports that the Narendra Modi-administration looks as a major growth driver.