In a bid to promote commerce and investment between the two regions, India and the Gulf Cooperation Council (GCC) will announce the launch of negotiations for a free trade agreement today.
GCC is a union of six countries in the Gulf region — Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
India’s exports to the GCC member countries grew by 58.26% to about USD 44 billion in 2021-22, as against USD 27.8 billion in 2020-21, according to data from the commerce ministry.
The share of GCC members in India’s total imports rose to 18% in 2021-22, from 15.5% in 2020-21.
Bilateral trade has increased to USD 154.73 billion in 2021-22, from USD 87.4 billion in 2020-21.
This would be a kind of resumption of FTA talks as earlier two rounds of negotiations had been held in 2006 and 2008 between India and GCC. The third round did not happen as GCC deferred its negotiations with all countries and economic groups.
India imports predominately crude oil and natural gas from the Gulf nations like Saudi Arabia and Qatar, and exports pearls, precious and semi-precious stones; metals; imitation jewellery; electrical machinery; iron and steel; and chemicals to these countries.
Besides trade, Gulf nations are host to a sizeable Indian population.
Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries. These NRIs send a significant amount of money back home.
India and the EU have also re-started negotiations on FTA in June this year after a gap of nearly nine years. Negotiations, which started in 2007, were suspended in 2013 due to differences over several issues.
UK and Australia have already gotten to the near-approved level of negotiations as India plans to go big in the next 5 years with regard to its trade.