India and GCC Begin FTA Negotiations to Boost Economic Cooperation

India-Gulf Cooperation Council (GCC) signed the Terms of Reference(ToR) for Free Trade Agreement. India started the officially comprehensive free trade agreement with the six nations of the Gulf Cooperation Council(GCC). The ToR mentioned the scope and modalities of a proposed trade pact, making a renewed push to deepen economic ties with the Gulf countries. 

GCC and India have shared historic trade relations and that the signing of ToRs marks the commencement of negotiations towards a mutually beneficial FTA. He highlighted that the FTA will further reinforce relations between India and GCC, particularly in the context of prevailing global uncertainties.

Key Objectives: 

• FTA holds significant potential to unlock and expand trade with an important region, with which India has longstanding historical ties in trade and commerce.

• The FTA will be a force multiplier for the global good and bring predictability and stability between two economies.

• FTA will enable 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.

• Security and Employment, fostering food and energy security for both regions while expanding job opportunities and elevating overall economic cooperation.

What is Significance? 

The relationship between India and the GCC is built on a foundation of robust people-to-people ties and massive economic exchange. The GCC is also home to nearly ten million members of the Indian community. These strong and enduring people-to-people ties are further reinforced by the substantial presence of Indian companies across the region.

India’s trade with GCC stood at USD 178.56 billion, 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. 

The GCC region is also a significant source of FDI for India, with cumulative investments exceeding USD 31.14 billion as on September 2025. 

• India’s Export: Key exports from India to GCC include engineering goods, rice, textiles, machinery, gems and jewelry an total Exports: USD 56.87 billion in FY 2024-25. 

• The GCC region is also a significant source of FDI for India, with cumulative investments exceeding USD 31.14 billion as on September 2025.

• India Imports : from GCC primarily comprise crude oil, LNG, petrochemicals, and precious metals such as gold.  Total Imports: USD 121.68 billion) in FY 2024-25

Source: PIB

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What are the Terms of Reference? 

The Terms of Reference(ToR) serve as the foundational blueprint for the FTA negotiations.  It is formally outlined in the scope, structure and modalities of negotiations for the proposed India-GCC Free Trade Agreement. The agreement enables both countries to begin structured discussion on free market access, regulatory cooperation and Tariff reduction. 

The ToR formally outlines the:

• Scope: Defining which sectors and products will be covered.

• Structure: Establishing the framework for how meetings and discussions will proceed.

• Modalities: Setting the rules for negotiations regarding free market access, regulatory cooperation, and the systematic reduction of tariffs.

By establishing these "ground rules," both Indian and GCC can now engage in structured discussions to remove trade barriers and harmonize regulatory standards.

More about the Gulf Cooperation Countries(GCC): 

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

Collectively, the GCC countries represent a market of 61.5 million people (2024) and US$ 2.3 trillion in terms of GDP at current prices, ranking 9th globally in this category. Energy Hub the region remains the world’s primary hub for energy exports, playing a crucial role in India’s energy security.

As negotiations move forward, the India-GCC FTA is expected to transform the Middle East-South Asia corridor into one of the most dynamic trade zones in the world.The GCC is also home to nearly ten million members of the Indian community. These strong and enduring people-to-people ties are further reinforced by the substantial presence of Indian companies across the region.

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