India and six-nation Gulf Cooperation Council (GCC) on Thursday signed Terms of Reference for a Free Trade Agreement (FTA) setting the framework for negotiations that would follow.
The discussions on the FTA with GCC have been going on for two decades and now finally reached the ToR stage. are ready to take-off more than two decades after the first attempt was made. The ToR establishes the framework, scope, objectives, and procedures for the negotiations. The signing of ToR is the first step for negotiations to begin.
“It is most appropriate that we now enter into a much stronger and robust trading arrangement which will enable greater free flow of goods, services, bring predictability and stability to policy, help encourage greater degree of investments and take our bilateral relations between the six nation GCC group and India to greater heights,” commerce and industry minister at the signing of the ToR.
A $178 Billion Economic Partnership
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.
The agreement with the GCC will further strengthen our relations both on geopolitical and trading elements, will help draw greater amounts of investments, create job opportunities, encourage the food security and energy security of both the GCC nations and India, the minister added.
“We already have 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 our nations,” he added.
From UAE to Saudi Arabia
Among the GCC nations, India already has signed FTAs with UAE, Oman and is in discussions with Qatar for laying 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.