UAE, Saudi Arabia Forget Hostilities To Come Together As Gulf Nations Agree On Trade Deal Terms With India

New Delhi: In a major move, India and the six-nation Gulf Cooperation Council have agreed on terms to start negotiations for a free trade agreement. Union minister Piyush Goyal informed the media about the development on Thursday.

After recently finalizing an FTA with the European Union and then a trade deal with the US, India is now preparing for another FTA. India and the six countries of the Gulf Cooperation Council (GCC) agreed on Thursday on the terms for initiating negotiations on a free trade agreement. Union Minister of Commerce and Industry Piyush Goyal confirmed this, stating that India and the GCC countries have signed the Terms of Reference (ToR), paving the way for formal negotiations.

What is the GCC?

It is noteworthy that the GCC comprises the United Arab Emirates (UAE), Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman. India and the UAE had already signed a free trade agreement in May 2020.  India and Oman also signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat in 2025.

When will the third round of talks begin? 

The FTA negotiations with the GCC will essentially be a resumption of talks. Previous discussions on a trade deal between the two sides took place in 2006 and 2008. The third round of talks could not be held due to the GCC suspending negotiations with all countries and economic blocs. However, talks are now expected to resume soon.

Will India Import Crude Oil?

This FTA could be a major boon for India. India primarily imports crude oil and natural gas from Gulf countries like Saudi Arabia and Qatar. India exports pearls, precious and semi-precious stones, metals, electrical machinery, iron and steel, and chemicals to these countries. In the financial year 2024-25, India's exports to GCC countries increased by approximately one percent year-on-year to about US$57 billion, compared to US$56.32 billion in 2023-24. Imports, on the other hand, increased by 15.33 percent to US$121.7 billion in 2024-25. Also read: Nahyan suddenly arrived in India and delivered a major blow to Pakistan, as the UAE backed out of the airport deal

Besides trade, a large number of Indians reside in the Gulf countries. According to estimates, nearly half of the approximately 32 million overseas Indians are working in the Gulf countries. Commerce Minister Piyush Goyal has said that this strong trade arrangement will promote better and easier exchange of goods and services. It will also increase investment between both sides.