India initiates process to sign FTA with six Gulf nations

Amid a rush of trade deals with advanced countries, India signed the terms of reference (ToR) for negotiations with the six-member Gulf Cooperation Council (GCC) in a bid to begin negotiations for the signing of a Free Trade Agreement (FTA) soon.

India’s Commerce and Industry Minister Piyush Goyal presided over the signing ceremony of the ToRs with the Gulf Coperation Council (GCC), a trade block consisting Saudi Arabia, Oman, the UAE, Qatar, Kuwait and Bahrain.

Ajay Bhadoo, additional secretary in the commerce ministry, will be India’s chief negotiator. On the other hand, Raja Al Marzouqi will lead the GCC's negotiator team.

The terms of reference (ToR) outline the scope and modalities of a proposed trade pact, NDTV reported.

The ToR defines the scope, structure and modalities of negotiations for the proposed FTA. India already has a comprehensive economic agreement with the UAE and has also finalised one with Oman, which will be implemented in the next few months.

GCC's chief negotiator Raja Al Marzouqi highlighted the importance of the proposed free trade agreement, noting that globalisation is under attack.

He said, the move sends a strong signal, amid global uncertainty. “It’s important for us at this time to try to be more cooperative to avoid any risk that our global economy is facing as a result of uncertainty,” he said.

He welcomed the Indian side to hold the first round of negotiations in Riyadh and said that it will "be a pleasure to host you there."

In his address at the signing ceremony, Commerce Minister Piyush Goyal said that the agreement will help boost bilateral trade and investments between the two.

"The two trading partners have been trading amongst each other for over 5,000 years and about 10 million Indians are living and working in the GCC region," he told reporters.

"It is most appropriate that we now enter into a much stronger and robust trading arrangement which will enable a greater free flow of goods, services, bring predictability and stability to policy, help encourage a greater degree of investments," Goyal said.

Piyush Goyal also said that this agreement will build on the already strong ties and will open opportunities across food processing, infrastructure, petrochemicals, ICT and services for India. Visas for Indian workers and professionals along with investments may be a crucial elment of talks in the coming months. India’s trade with UAE got a major boost after the bilateral trade deal was signed a few years ago.

He also said, "We have entered into a record eight FTAs. We will soon announce the ninth bilateral trade agreements, first tranche details with the USA, which has been agreed upon only two days back."

Effectively, these nine free trade agreements between India and other developed nations cover 38 countries.

GCC — comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE — is a key trade and investment partner for India, with exports of nearly $57 billion and imports of around $122 billion, accounting for over 15% of India’s total global trade. Trade with GCC has grown at an average annual rate of about 15% in the last five years.