With the India-GCC planned Free Trade Agreement stuck in limbo, the government has said it is “actively engaged” with the UAE to make a better trade relationship with other GCC members.

“With the UAE, we are engaging actively so that we open up with the rest of the GCC members,” Nirmala Sitharaman, minister of state for commerce and industry, told FE.

India and the UAE have begun a dialogue that would firm up a Free Trade Agreement between India and the Gulf Cooperation Council (GCC).

Last October, in a meeting with her counterparts from the GCC countries in New York, external affairs minister Sushma Swaraj called for an early conclusion of the India-GCC FTA and operationalising the Framework Agreement.

According to MEA spokesperson Vikas Swarup, “The minister invited the GCC nations to participate in the Make in India campaign, in particular the Mumbai-Delhi industrial corridor.

She also called for turning the buyer-seller relationship in the energy sector into a “mutually beneficial investment partnership” that involves both upstream and downstream operations, Swarup added.

The GCC is India’s largest trading partner with $137.7 billion (Dh506 billion) trade in 2014-2015, up from only 5.5 billion (Dh20 billion) in 2001. More than 50% of India’s oil and gas come from the GCC countries which host over seven million Indian nationals.

Weak implantation of intellectual property right (IPR) in the country and different legal systems operative in the member-nations of the GCC have led them to seek individual free trade agreement with India.

When Prime minister Narendra Modi visited the UAE last August, he had discussions with Abu Dhabi Investment Authority (ADIA) and top business leaders in the UAE. ADIA has announced an initial allocation of $2 billion for investments in infrastructure projects in India and support for the establishment of a strategic oil reserve.  Bilateral trade between the UAE and India is around $60
billion.

The two sides have agreed to increase the bilateral trade by 60% over the next five years and also to encourage the investment institutions of the UAE to raise their investments in India, including through the establishment of UAE-India Infrastructure Investment Fund, with the aim of reaching a target of $75 billion.

The UAE is planning to invest in programmes like Make in India, Digital India and Smart Cities.

In a recent report, the Indian embassy in Riyadh said, “The GCC constitutes the immediate neighborhood of India separated only by the Arabian Sea. India, therefore, has a vital stake in the stability, security and economic well-being of the Gulf.”