India has formally launched negotiations for a historic free trade agreement with the Gulf Cooperation Council (GCC), a move set to deepen economic ties, unlock trade potential, and foster investment. Union Commerce and Industry Minister Piyush Goyal signed the Joint Statement with GCC Secretary General Jasem Mohammad Al Budaiwi, in the presence of senior delegations from both sides. The six-member GCC bloc includes Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain.
Strengthening Strategic Partnerships
Goyal emphasised that India’s relationship with the GCC, rooted in shared history and cultural ties, would gain significant momentum through a broad-based and mutually beneficial FTA. He noted that “amidst global uncertainties, it is most opportune to start discussions on a robust trading arrangement that harnesses our mutual synergies and complementarities.” The minister highlighted that the agreement would cover trade in goods, services, digital trade, customs procedures, cutting-edge technologies, and enhanced investment flows.
The Joint Statement builds on the Terms of Reference signed on February 5, 2026, formally restarting talks on a pact pending since 2004. Goyal also stressed the infrastructure and petrochemical benefits of the partnership, noting, “We will also get a foothold to grow Indian infrastructure and the infrastructure in the GCC, together with the high-quality companies that are working in the space of infrastructure.”
Economic Significance and Trade Potential
India’s trade with the GCC has grown steadily over the past five years, with bilateral trade in FY25 reaching $178.56 billion, including $56.87 billion in exports and $121.66 billion in imports, accounting for 15.42% of India’s global trade. Saudi Arabia is India’s second-largest GCC trade partner after the UAE. The region has also been a major source of foreign direct investment, with cumulative FDI exceeding $31.14 billion as of September 2025.
India exports engineering goods, textiles, rice, machinery, and gems and jewellery to the GCC while importing crude oil, liquefied natural gas, petrochemicals, and precious metals such as gold. Collectively, the GCC market comprises 61.5 million people and a GDP of $2.3 trillion, ranking ninth globally.
Al Budaiwi underlined that the FTA “will serve as an important tool to further strengthen trade and investment ties by infusing predictability and certainty for businesses.” Officials noted that the agreement is expected to be a “force multiplier for global good,” facilitating export diversification and stronger economic integration.
Boosting Exports: Four-Pronged Strategy
Goyal recently outlined a four-pronged approach to strengthen India’s exports alongside FTA initiatives: raising awareness of FTA benefits among MSMEs, maintaining uncompromising quality, moving up the value chain from raw to finished products, and fostering local export ecosystems. He emphasised, “Standards are not barriers; they are entry tickets,” citing Prime Minister Narendra Modi’s ‘Zero Defect, Zero Effect’ vision.
Following the signing, Al Budaiwi met External Affairs Minister Dr. S. Jaishankar, with both expressing confidence that the agreement will elevate trade and investment relations. The India–GCC Joint Action Plan, anchored in Strategic Dialogue, aims to expand cooperation across energy, agriculture, security, and people-to-people ties. India already has FTAs with the UAE and Oman and is negotiating with Qatar, while exploring additional agreements with Chile and Canada.
