Despite the political turmoil in the Arab world, the talks for a free trade agreement (FTA) between India and the Gulf Cooperation Council (GCC) seem to be still on track.
According to a senior Arab diplomat, progressive talks have just concluded between the two sides. ?Both sides need to work together as a team. We (GCC members) are working hard and just very recently had very constructive meetings with the Indian officials on taking forward the FTA negotiations,? said Mohamed Ghassan Shaikho, ambassador of the Kingdom of Bahrain in India.
?Issues including petrochemical industries and certain others were discussed at length and we are now awaiting feedback from the GCC secretariat as well as from the Indian government,? the envoy added.
?If a common currency for the GCC members is in place by the first quarter of 2012, it might result in an early FTA,? said a senior official.
The GCC countries ? Oman, UAE, Bahrain, Kuwait, Qatar and Saudi Arabia ? and India have identified several potential sectors for investment by Indian entrepreneurs, including information technology, telecommunications, education, training, healthcare services, tourism and hotel industry, banking and financial services, oil, gas and petrochemicals, electricity, housing, road and rail network.
An FTA in the region will benefit India substantially as the six member countries control over 45 % of the world’s recoverable oil wealth and 20% of gas resources. They supply about a fifth of the global crude output.
Due to the UAE and Saudi Arabia?s refusal to include petroleum and petroleum products in the negative list, the FTA talks have been getting derailed.
The global financial crisis and the political turmoil in the Arab world have also been pushing back the talks. The talks for the India-GCC FTA are going on since 2005.
In the proposed FTA, India is also seeking greater safeguards for its chemical and petrochemical industry to protect domestic players. The cost of crude oil is extremely low in GCC countries.
India is the third country apart from Japan and the US to have become a dialogue partner of the GCC.