India, GCC sign ToR to formally launch FTA talks; pact seen boosting trade, investment flows

India and the six-nation Gulf Cooperation Council (GCC) on Thursday signed the terms of reference (ToR) to formally begin negotiations for a proposed free trade agreement (FTA), in a move aimed at strengthening trade and investment ties between the two regions.The ToR outlines the scope and modalities of the proposed trade pact. Commerce and Industry Minister Piyush Goyal presided over the signing ceremony of the ToRs with the GCC bloc, PTI reported.

The GCC comprises Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.Goyal said the proposed agreement is expected to significantly enhance bilateral trade and investment between the two sides.“The two trading partners have been trading amongst each other for over 5,000 years,” he told reporters.He added that around 10 million Indians are currently living and working across GCC nations.“It is most appropriate that we now enter into a much stronger and robust trading arrangement which will enable a greater free flow of goods, services, bring predictability and stability to policy, help encourage a greater degree of investments,” Goyal said.He said the agreement will also strengthen food and energy security for both regions. While India is among the world’s major food grain producers, GCC countries are key exporters of oil and gas.“We already have a very robust, nearly $179 billion bilateral trade. I believe a number of products and services required by the GCC countries can be provided by our young, very talented and skilled Indians, as the GCC countries can help us with further diversification and growth of our energy sources,” he said.He added that the proposed pact will help Indian exports through elimination of duties and non-tariff barriers.“We will also get a foothold to grow Indian infrastructure and the infrastructure in the GCC, together with the high-quality companies that are working in the space of infrastructure. Our petrochemical industry will hugely benefit with this partnership,” Goyal said.He said India’s information and communication technology firms will also get opportunities in the expanding GCC market.India has already implemented a free trade pact with the UAE in May 2022. India and Oman also signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on December 18, 2025.Goyal said India has concluded nine trade pacts in recent years, covering 38 developed nations.GCC chief negotiator Raja Al Marzouqi said the pact is significant amid global economic uncertainties.“So it’s a message, it’s a signal for the whole globe, and it’s important for us at this time to try to be more cooperative to avoid any risk that our global economy is facing as a result of uncertainty,” he said.Additional Secretary in the Department of Commerce Ajay Bhadoo is India’s chief negotiator for the pact.The launch of negotiations marks a resumption of earlier talks, as two rounds were held in 2006 and 2008 before the GCC deferred negotiations with multiple countries and economic blocs.India largely imports crude oil and natural gas from Gulf nations such as Saudi Arabia and Qatar, while exporting pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel and chemicals.India’s exports to the GCC rose nearly 1% to about $57 billion in 2024-25 from $56.32 billion in 2023-24. Imports increased 15.33% to $121.7 billion from $105.5 billion.Total bilateral trade rose to $178.7 billion in 2024-25 from $161.82 billion in 2023-24.The UAE was India’s third-largest trading partner in the last fiscal. India exported goods worth $36.63 billion and imported $63.40 billion, resulting in a trade deficit of $26.76 billion.Saudi Arabia was India’s fifth-largest trading partner, with exports at $11.75 billion and imports at $30.12 billion, resulting in a trade deficit of $18.36 billion.Qatar was India’s 22nd-largest trading partner, with exports of $1.68 billion and imports of $12.46 billion, resulting in a trade deficit of $10.78 billion. India mainly imports LNG from Qatar.Oman ranked 28th among India’s trading partners. Exports stood at $4 billion, while imports were $6.54 billion, leading to a trade deficit of $2.48 billion.Kuwait ranked 29th, with exports of $1.93 billion and imports of $8.28 billion, leading to a trade deficit of $6.35 billion.India’s exports to Bahrain, its 65th-largest trading partner, stood at $797.47 million, while imports were $843.44 million, resulting in a trade deficit of $45.97 million.