India, GCC to Finalise Terms to Launch Free Trade Talks

India and the Gulf Cooperation Council (GCC) are set to formalise the terms of reference on February 5, marking a crucial step towards launching negotiations for a comprehensive free trade agreement (FTA). The signing ceremony will be overseen by Commerce and Industry Minister Piyush Goyal along with representatives of the GCC, which includes Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain.

The terms of reference will define the scope, structure and procedural framework for the proposed trade agreement, paving the way for formal negotiations. The move signals renewed momentum in India–GCC trade engagement after earlier attempts in 2006 and 2008. Those talks were eventually stalled when the GCC suspended FTA negotiations with all countries and economic blocs.

India has already made progress with individual GCC members. It signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE in May 2022, followed by a similar agreement with Oman in Muscat on December 18, 2025. The broader GCC-level FTA is expected to build on these bilateral arrangements and deepen regional economic integration.

The UAE remains India’s most significant trading partner within the GCC and was its third-largest trading partner globally in the last fiscal year. India’s exports to the UAE stood at USD 36.63 billion, while imports reached USD 63.40 billion, resulting in a trade deficit of USD 26.76 billion in 2024–25. Saudi Arabia ranked as India’s fifth-largest trading partner, with exports of USD 11.75 billion and imports of USD 30.12 billion, leading to a trade deficit of USD 18.36 billion.

Qatar was India’s 22nd-largest trading partner, with exports valued at USD 1.68 billion and imports at USD 12.46 billion. Oman ranked 28th, Kuwait 29th, and Bahrain 65th, each contributing to varying levels of trade deficits for India during 2024–25.

Beyond trade, the Indian diaspora plays a vital role in India–GCC relations. Of the estimated 32 million non-resident Indians worldwide, nearly half are believed to be employed in Gulf countries, contributing significantly to remittance inflows.

The proposed FTA aims to strengthen economic ties, expand market access, and address existing trade imbalances between India and the GCC, reinforcing their long-standing strategic and economic partnership.