“Terms of reference for the agreement are being finalised and we expect to launch the negotiations next month.”
— Official
The GCC, an union of six countries in the Gulf region — Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain and India are expected to start negotiations for a free trade agreement in November with an aim to boost economic ties between the two regions, reported PTI quoting an official source. “Terms of reference for the agreement are being finalised and we expect to launch the negotiations next month,” the official said.
India has already implemented a free trade pact with the UAE in May this year. The GCC region holds huge trade potential and a trade agreement would help in further boosting India’s exports to that market, according to analysts.
PTI quoted Rakesh Mohan Joshi, Director, Indian Institute of Plantation Management, Bangalore, who said that the GCC market was unexploited by domestic exporters and it held huge potential. “GCC is a major import dependent region. We can increase our exports of food items, clothing and several other goods. Duty concessions under a trade agreement will help in tapping that market. It will be a win-win situation for both sides,” Joshi said.
Besides trade, Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries. These NRIs send a significant amount of money home and according to a November 2021 report of the World Bank, India got $87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations
Mumbai-based exporter and founder chairman of Techno-craft Industries India, Sharad Kumar Saraf said that the GCC had emerged as a major trading partner for India and there was huge potential for increasing investments between the two regions. “FTA will have a major benefit for both the sides,” Saraf said.
The Federation of Indian Exports Organisation (FIEO) Vice Chairman Khalid Khan said sectors like chemicals, textiles, gems and jewellery and leather will get a major impetus by this agreement.
India’s exports to the GCC increased by 58.26% to about $44 billion in 2021-22 against $27.8 billion in 2020-21, according to data of the Commerce Ministry. The share of these six countries in India’s total exports has risen to 10.4% in 2021-22 from 9.51% in 2020-21. Similarly, imports rose by 85.8% to $110.73 billion compared to $59.6 billion in 2020-21, the data showed. The share of GCC members in India’s total imports rose to 18% in 2021-22 from 15.5% in 2020-21. Bilateral trade has increased to $154.73 billion in 2021-22 from $87.4 billion in 2020-21.
Besides trade, Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries. These NRIs send a significant amount of money home and according to a November 2021 report of the World Bank, India got $87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations.
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