India and Gulf Cooperation Council to Sign Terms of Reference for FTA Talks on February 5

India and the Gulf Cooperation Council (GCC) are set to formalise the terms of reference for initiating discussions on a free trade agreement (FTA). This agreement outlines the framework and procedures for the proposed trade deal. Commerce and Industry Minister Piyush Goyal will oversee the signing ceremony with the GCC, which comprises Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain.

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India has previously established a free trade agreement with the UAE in May 2022. Additionally, India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on December 18, 2025. The upcoming FTA talks with the GCC mark a continuation of earlier negotiations held in 2006 and 2008. However, the third round was postponed as the GCC halted its talks with all countries and economic groups.

Trade Dynamics with GCC Nations

The trade relationship between India and the GCC is significant. In 2024-25, India's exports to the GCC increased by about one per cent to approximately USD 57 billion compared to USD 56.32 billion in 2023-24. Imports from these nations rose by 15.33 per cent to USD 121.7 billion from USD 105.5 billion in the previous fiscal year.

Bilateral trade between India and the GCC reached USD 178.7 billion in 2024-25, up from USD 161.82 billion in 2023-24. India primarily imports crude oil and natural gas from countries like Saudi Arabia and Qatar. In return, it exports pearls, precious stones, metals, imitation jewellery, electrical machinery, iron and steel, and chemicals.

Key Trading Partners within GCC

The UAE was India's third-largest trading partner last fiscal year. Exports to the UAE amounted to USD 36.63 billion, while imports were USD 63.40 billion, resulting in a trade deficit of USD 26.76 billion in 2024-25. Saudi Arabia ranked as India's fifth-largest trading partner during this period.

Exports to Saudi Arabia were valued at USD 11.75 billion, while imports stood at USD 30.12 billion, leading to a trade deficit of USD 18.36 billion in 2024-25. Qatar was India's 22nd-largest trading partner last fiscal year with exports at USD 1.68 billion and imports at USD 12.46 billion, resulting in a trade deficit of USD 10.78 billion.

Trade Figures for Other GCC Nations

Oman was India's 28th largest trading partner in 2024-25 with exports worth USD 4 billion and imports totalling USD 6.54 billion, creating a trade deficit of USD 2.48 billion. Kuwait ranked as India's 29th trading partner with exports at USD 1.93 billion and imports at USD 8.28 billion, leading to a trade deficit of USD 6.35 billion.

Bahrain was India's 65th largest trading partner last fiscal year with outbound shipments valued at USD 797.47 million and imports at USD 843.44 million, resulting in a trade deficit of USD 45.97 million in 2024-25.

Indian Diaspora's Role

A substantial number of Indians reside in Gulf nations, contributing significantly to remittances sent back home. Of approximately 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries.

The upcoming FTA discussions aim to strengthen economic ties between India and the GCC further while addressing existing trade imbalances.

With inputs from PTI