Free Trade Pact Negotiations Between India And GCC To Start On Thursday

Trade between India and the six gulf countries has increased over the years. The free trade pact will only add to the tremendous potential.

Free Trade Pact Negotiations Between India And GCC To Start On Thursday
Around half of Indian expatriates work in bember countries of the Gulf Council.

INDIA and the Gulf Cooperation Council (GCC) will announce the launch of negotiations for a free trade agreement on Thursday, November 24, which aims at promoting two-way commerce and investments between the regions, a government official said, according to PTI.

The Cooperation Council for the Arab States of the Gulf, also known as GCC, is a union of six countries in the Middle East – Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.

According to data from the Ministry of Commerce and Industry, India's exports to the GCC member countries grew by 58.26 per cent to about $44 billion in 2021-22, as against $27.8 billion in 2020-21, according to data from.

The share of GCC members in India's total imports, on the other hand, also rose to 18 per cent in 2021-22, from 15.5 per cent in 2020-21. Meanwhile, bilateral trade increased to $154.73 billion in 2021-22, from $87.4 billion in 2020-21.

“GCC officials will be here for the announcement,” the official told PTI.

India already has implemented an individual free trade pact with the UAE in May this year.

This is seen as a resumption of FTA talks between India and GCC as two earlier rounds of negotiations had already been held in 2006 and 2008. The third round could not be held as GCC deferred its negotiations with all countries and economic groups.

India imports predominately crude oil and natural gas from the Gulf nations like Saudi Arabia and Qatar, and exports pearls, precious and semi-precious stones; metals; imitation jewellery; electrical machinery; iron and steel; and chemicals to these countries.

Besides trade, Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries.

NRIs send a significant amount of money back home – foreign remittance. According to a World Bank report that was released in November 2021, India got $87 billion in foreign remittances in 2021. A sizeable portion of this came from the GCC nations.

According to commerce ministry data, the share of these six countries in India's total exports has risen to 10.4 per cent in 2021-22, from 9.51 per cent in 2020-21. Moreover, imports rose by 85.8 per cent to USD 110.73 billion, compared to $59.6 billion in 2020-21, the data showed.

The UAE was the third-largest trading partner of India in 2021-22. India's bilateral trade with the nation increased to $72.9 billion in 2021-22 as compared to $43.3 billion in 2020-21. Saudi Arabia was the fourth-largest trading partner last fiscal. Total bilateral trade has increased to about $43 billion in 2021-22, from $22 billion a year ago.

India imports 8.5 million tonnes a year of liquified natural gas from Qatar and exports products ranging from cereals to meat, fish, chemicals, and plastics. Two-way commerce between India and Qatar rose to $15 billion in 2021-22 from $9.21 billion in 2020-21.

With inputs from PTI.

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