• Source:JND
Add as a preferred

India-Gulf FTA: India signed a Terms of Reference (ToR) with the Gulf Cooperation Council (GCC), a body of six Arab nations, to resume negotiations for a free trade agreement (FTA). The ToR will guide the negotiations for the GCC-India FTA by defining its scope and modalities. The development is seen as another big achievement in the trade sector after sealing an FTA with the European Union (mother of all deals) and a crucial breakthrough in the India-US trade agreement.

The Terms of Reference (ToR) for the India-GCC FTA were signed between Ajay Bhadoo, Additional Secretary and Chief Negotiator, Department of Commerce and Raja Al Marzouqi, Chief Negotiator, Secretariat General of the Gulf Cooperation Council, on Thursday at Vanijya Bhawan, New Delhi. The signing took place in the presence of Union Minister of Commerce and Industry Piyush Goyal, Union Minister of State for Commerce and Industry Jitin Prasada, and Commerce Secretary Rajesh Agrawal.

What Is Gulf Cooperation Council (GCC)?

The Gulf Cooperation Council (GCC) was established by an agreement concluded on May 25, 1981, in Riyadh, Saudi Arabia, in view of their special relations, geographic proximity, similar political systems based on Islamic beliefs, joint destiny and common objectives. Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain are the members of the council.

ALSO READ: Shehbaz Sharif's Dirty Game On Kashmir Issue Exposed As Pakistan PM Links Dispute With Four-Day Conflict In May

How Will India-GCC Deal Help Grow Economy?

The FTA will be a force multiplier for the global good, Goyal said, underlining that the agreement will bring predictability and stability, taking the relationship between the two sides to greater heights. He exuded confidence that FTA will enable the seamless flow of goods and services and attract investments while expanding job opportunities and fostering food and energy security for the region, elevating our deep economic ties.

"GCC and India have shared historic trade relations, and the signing of ToRs marks the commencement of negotiations towards a mutually beneficial FTA. The FTA will further reinforce relations between India and GCC, particularly in the context of prevailing global uncertainties," said Chief Negotiator, Secretariat General of the Gulf Cooperation Council, Dr Al Marzouqi.

ALSO READ: Pakistan Blast: 31 Killed, Over 160 Injured After Massive Explosion Hits Islamabad Mosque During Friday Prayers

What Is The Significance Of India–GCC FTA?

The India–GCC FTA holds significant potential to unlock and expand trade with an important region, with which India has longstanding historical ties in trade and commerce. India’s trade with GCC stood at USD 178.56 billion (Exports: USD 56.87 billion; Imports: USD 121.68 billion) in FY 2024-25, accounting for 15.42% of India’s global trade. In the last five years, India’s trade with the GCC has expanded steadily, registering an annual average growth rate of 15.3 per cent. Collectively, the GCC countries represent a market of 61.5 million people (2024) and USD 2.3 trillion in terms of GDP at current prices, ranking 9th globally in this category. The GCC region is also a significant source of FDI for India, with cumulative investments exceeding USD 31.14 billion as of September 2025.

Which Sectors Will Benefit?

Key exports from India to GCC include engineering goods, rice, textiles, machinery, gems and jewellery. Key sectors of imports from GCC primarily comprise crude oil, LNG, petrochemicals, and precious metals such as gold.

Why Is India–GCC FTA A Worry For Pakistan?

After India's 'Operation Sindoor' success, Pakistan has been making attempts to get support from the Gulf countries. In September 2025, Pakistan and Saudi Arabia signed a Strategic Mutual Defence Agreement (SMDA), pledging that "any aggression" against one is considered an attack on both. Islamabad also deepened ties with Türkiye as Ankara extended its support to Islamabad during the India-Pakistan conflict last May. On the economic front, Islamabad looks to Gulf countries for investment to get support for its fragile economy. Amid Pakistan's full efforts to draw investment from the Gulf countries, an FTA between India and the GCC will be a blow to it. The deal could gradually narrow Pakistan's traditional "strategic space" as Gulf nations may prioritise stable, large-scale economic partners like India over the debt-burdene Pakistan.


Also In News