India, GCC begin discussions for FTA

India and the Gulf Cooperation Council (GCC) have recently commenced discussions on the framework of a free trade agreement.

This agreement holds great promise for India as it seeks to tap into a vast and prosperous market for its goods while also aiming for concessions on visas in a region traditionally hosting a substantial number of Indian workers and professionals. In return, India hopes to attract investment to bolster its economic growth.

However, government officials have indicated the possibility of replacing a bilateral investment treaty with a dedicated chapter within the agreement. Both parties appear receptive to this alternative, although in-depth negotiations for the proposed treaty have not yet to begin.

The GCC, consisting of six nations—Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain, and Oman—had expressed their intent to move forward with the proposed Free Trade Agreement over a year ago. However, certain reservations within the region have led to delays. Notably, this will be the second trade pact in the region, following the UAE, and there are indications that Oman is also inclined to sign a separate agreement.

India’s exports to GCC nations were valued at over US$ 51 billion in the last financial year, with shipments reaching nearly US$ 21 billion from April to August. Essential export items include oil products, gems and jewellery, electrical machinery, chemicals, and cereals. In contrast, imports were valued at US$ 133 billion during the 2022-23 financial year and just over US$ 39 billion from April to August this year.

Source: Times of India