India and the Gulf Cooperation Council (GCC) will likely start fresh negotiations for a planned free trade agreement (FTA) here on November 24, an official source told FE, as both the sides aim to scale up bilateral trade at a time when key western markets are facing a demand slowdown.
Interestingly, the GCC group had earlier dithered on whether to clinch an FTA with India, having started discussion for this purpose more than a decade ago. However, talks for a possible FTA gained traction after India and the UAE signed an FTA in February, which came into force on May 1. The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
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India’s exports to the GCC members jumped by 58.3% in the last fiscal to $43.9 billion, albeit on a contracted base, showed the official data. Together they accounted for 10.4% of India’s overall merchandise exports. However, the UAE alone made up almost 64% of India’s shipments to the GCC members.
Similarly, thanks to its reliance on the sourcing of crude oil from this region, India’s imports from the GCC members stood at $85.8 billion in FY22, up 85.8% from a year before, aided by a low base.
Following its exit from the Beijing-dominated RCEP in November 2019, New Delhi has stepped up efforts to forge “fair and balanced” trade pacts with key countries. In February, India signed an FTA with the UAE, the first such pact by New Delhi with any economy in over a decade. Then followed an interim trade deal with Australia in April. Similarly, India is either negotiating or planning to start FTA talks with key economies, such as the EU, the UK, Canada, Israel and members of Gulf Co-operation Council (GCC). Together these economies (excluding the UAE, with which an FTA was signed in February) contributed as much as $108 billion, or 26%, to India’s merchandise exports in FY22.