India and six-nation Gulf Cooperation Council (GCC) have commenced negotiations of their Free Trade Agreement with the signing of a joint statement on Tuesday.
The joint statement was signed by Commerce and Industry Minister Piyush Goyal and Secretary General of GCC Jasem Mohammad Al Budaiwi in New Delhi.
What did Piyush Goyal say?
“We signed the joint statement for India-GCC FTA, building on the Terms of Reference (ToR) signed on February 5. 2026, formally launching negotiations for a comprehensive and mutually beneficial agreement,” Goyal posted on ‘X’.
“This marks a major step towards deeper collaboration in key strategic areas, including trade in goods, customs procedures, services, digital trade, cutting-edge technologies and enhanced investment flows between India and GCC,” he added.
The Terms of Reference for the FTA signed earlier this month sets the framework for negotiations that would follow.
The discussions on entering into negotiations between India and GCC on the FTA went on for more than two decades but reached the ToR stage this month.
Why is this agreement important
The agreement is crucial because when it comes to just goods trade the GCC – that includes Saudi Arabia, United Arab Emirates, Oman, Qatar, Bahrain and Kuwait – is India’s biggest partner. The bilateral trade between two sides totalled $ 178.56 billion in 2024-25 with India’s exports at $ 58.87 billion and imports at $ 121.68 billion.
Apart from large trade volumes, there are about 10 million Indians living and working in the GCC region, helping power the economies of the GCC and working as a living bridge between our societies between the two.
Among the GCC nations, India already has signed FTAs with UAE and Oman. It is in discussions with Qatar to lay the ground for negotiations to begin. Even with Bahrain, draft ToR has been exchanged for initiation of negotiations on the Comprehensive Economic Partnership Agreement (CEPA).
In August 2004 India and GCC signed a Framework Agreement on Economic Cooperation, paving the way for FTA talks. In 2006 and 2008 two rounds of negotiations were held. In 2009 the GCC deferred its negotiations with all countries.
UAE is India’s biggest trade partner in GCC with bilateral trade of $ 100 billion followed by Saudi Arabia at $ 41.8 billion. It is an important source of Foreign Direct Investment (FDI) with inflows totalling $ 31 billion between April 2000 and September 2025.