India and the Gulf Cooperation Council are set to start talks on a free trade agreement as early as next month, now that both sides have appointed their chief negotiators, according to officials. While the intent to hold talks on an FTA had been announced in November last year, nothing concrete had been done so far due to a delay in appointing a chief negotiator from the GCC, commerce ministry officials said.
“There was a change in the chief negotiator from the GCC side. However, the chief negotiator of the GCC has now been appointed and talks should begin soon,” an official told Moneycontrol.
With the terms of reference already exchanged and the chief negotiators appointed, the talks should be back on track, another senior official said.
“There is a keenness on both sides to complete these negotiations as early as possible. We should be holding the first round within one month,” the official added.
The GCC is a union of six countries in the Gulf region – Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
Expediting talks
A Framework Agreement on Economic Cooperation between India and the Gulf Cooperation Council was first signed in August 2004. The framework agreement provided that both parties would consider extending and liberalising trade relations and start discussions on the feasibility of an FTA between them.
Accordingly, negotiations commenced with the GCC, with two rounds held in 2006 and 2008. The third round did not take place as the GCC deferred its negotiations with all countries and economic groups.
During Saudi Arabia Crown Prince Mohammed bin Salman’s discussions with Prime Minister Narendra Modi in September, 2023, it was agreed to expedite the FTA negotiations.
About GCC
The Arab region is India’s largest trading partner bloc, with trade exceeding $240 billion during FY23. Trade with the GCC countries alone amounted to over $184 billion.
Among economic regions, the GCC is also India’s top source of imports. Imports from GCC countries were $133 billion in FY23, up 20 percent on year, while exports were 16.7 percent higher at $51.3 billion. India's exports to the GCC grew by 58.3 percent to $44 billion in FY22 from $27.8 billion in FY21.
The UAE was India's third-largest trading partner and Saudi Arabia the fourth-largest trading partner during FY23.
India imports predominantly crude oil and natural gas from Saudi Arabia and Qatar. It exports pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel, and chemicals to these countries.
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