The Gulf Cooperation Council (GCC) and India are set to officially sign the terms of reference to resume negotiations for a comprehensive free trade agreement (FTA). The signing ceremony will be presided over by India’s Commerce and Industry Minister, Piyush Goyal, marking a significant step towards strengthening economic ties between the six-nation bloc and the South Asian economic powerhouse.
Deepening Economic Partnership
This move formalizes discussions that began in late 2023 to establish the framework and scope for the proposed Comprehensive Economic Partnership Agreement (Cepa). The agreement aims to build on an already substantial trade relationship.
In the 2024-25 period, India’s exports to the GCC grew by 1% to $57 billion, while imports from the bloc, primarily energy, saw a significant 15% increase to $122 billion. The new Cepa is expected to further liberalize trade, reduce tariffs, and open up new avenues for investment and collaboration across various sectors, including technology, finance, and logistics.
Building on Bilateral Success
The potential GCC-wide agreement follows the success of several bilateral treaties between India and individual Gulf nations. In 2022, the UAE and India signed a landmark Cepa when their bilateral trade stood at approximately $60 billion. Building on this momentum, the two countries recently announced an ambitious new target to elevate non-oil bilateral trade to $200 billion by 2032.
More recently, Oman and India finalized their own Cepa in December 2023, further integrating the economies and setting a positive precedent for the broader regional agreement.
A Bridge of Talent and Trade
The economic relationship is strongly supported by deep-rooted cultural and demographic ties. Of the 32 million non-resident Indians globally, nearly half are estimated to live and work in the Gulf countries, forming a vital bridge for talent and remittances.
The UAE alone is home to over 4.3 million Indian expatriates, who constitute nearly a third of the Gulf state’s total population. This extensive diaspora is a key driver of cross-border innovation, entrepreneurship, and investment, creating a natural foundation for a more integrated economic future.
About The Gulf Cooperation Council (GCC)
The Gulf Cooperation Council is a regional, intergovernmental, political, and economic union consisting of six Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The council’s main objective is to promote coordination, integration, and interconnection between its member states in all fields in order to achieve unity.
Source: AGBI
