India, GCC Formalise Start of Free Trade Talks

India has moved closer to a comprehensive free trade agreement with the six-nation Gulf Cooperation Council (GCC) by signing the Terms of Reference for negotiations, marking a renewed push to deepen economic ties with one of its most critical trading partners amid global uncertainty.

What the Terms of Reference Mean

The signing of the Terms of Reference (ToR) formally outlines the scope, structure and modalities of negotiations for a proposed India–GCC free trade agreement. This step enables both sides to begin structured discussions on tariff reduction, market access and regulatory cooperation. The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, collectively forming India’s largest regional trading bloc.

GCC’s Central Role in India’s Trade

The GCC is a key trade and investment partner for India, accounting for over 15% of India’s total global trade. India’s exports to the bloc are valued at nearly $57 billion, while imports, largely driven by crude oil, gas and petrochemicals, stand at around $122 billion. Bilateral trade with the GCC has grown at an average annual rate of about 15% over the past five years, highlighting the region’s strategic economic importance.

Government’s Objectives and Focus Areas

Commerce and Industry Minister Piyush Goyal stated that the proposed agreement would build on already strong economic ties and open new opportunities for Indian businesses. Priority sectors include food processing, infrastructure, petrochemicals, information and communication technology, and services. Issues related to mobility—such as visas for Indian workers and professionals—along with investment flows are expected to be important elements of the negotiations.

Important Facts for Exams

• The GCC consists of six West Asian countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE.
• The ToR defines the framework for negotiating a free trade agreement.
• GCC accounts for over 15% of India’s total global trade.
• India already has a trade agreement with UAE and a concluded pact with Oman.

Reviving a Stalled Negotiation Track

India and the GCC had initiated FTA discussions earlier, but talks were suspended after the bloc paused all external trade negotiations. Momentum returned after India signed a comprehensive trade deal with the UAE, although consensus among all GCC members took time. The renewed talks align with India’s broader strategy of expanding FTAs with complementary economies to boost exports, strengthen energy and food security, attract investment and generate employment across regions.