India and GCC Forge Ahead with Free Trade Agreement Negotiations

India has embarked on negotiations for a free trade agreement with the Gulf Cooperation Council (GCC), which includes six Middle Eastern nations. This agreement aims to enhance bilateral trade and investment, building on a trading relationship that spans over 5,000 years. Commerce Minister Piyush Goyal highlighted the potential benefits, including improved food and energy security, and opportunities for Indian professionals in the GCC market. With bilateral trade already reaching USD 179 billion, the proposed FTA seeks to eliminate tariffs and non-tariff barriers, further boosting Indian exports. The negotiations mark a revival of previous discussions held in the mid-2000s, reflecting the importance of cooperation amid global economic uncertainties.

By Narendra Chaudhary Feb 5, 2026, 18:01 IST

New Trade Agreement on the Horizon

New Delhi: India has officially commenced negotiations for a free trade agreement (FTA) with the Gulf Cooperation Council (GCC), a coalition of six Middle Eastern nations, as they signed the terms of reference on Thursday.

The terms of reference delineate the framework and procedures for the proposed trade agreement. The signing ceremony was led by Commerce and Industry Minister Piyush Goyal.

The GCC comprises Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain.

Goyal emphasized that this agreement is poised to enhance trade and investment between India and the GCC.

He noted that the two regions have engaged in trade for over 5,000 years.

Currently, around 10 million Indians reside and work in the GCC, contributing significantly to the economies of these nations.

Goyal remarked that establishing a more robust trading framework will facilitate the seamless exchange of goods and services, ensuring policy stability and encouraging investment.

The agreement is also expected to bolster food and energy security for both India and the GCC, with India being a leading food grain producer and the GCC nations being major oil and gas exporters.

With bilateral trade already reaching approximately USD 179 billion, Goyal expressed confidence that Indian professionals can meet the GCC's diverse needs, while the GCC can assist India in diversifying its energy sources.

The proposed FTA aims to eliminate tariffs and non-tariff barriers, thereby boosting Indian exports.

Goyal highlighted the potential for collaboration in infrastructure development, benefiting both Indian and GCC companies, particularly in the petrochemical sector.

Additionally, India's information and communication technology firms are set to gain access to the expanding GCC market.

India has previously established a free trade agreement with the UAE in May 2022 and signed a Comprehensive Economic Partnership Agreement (CEPA) with Oman in December 2025.

Goyal noted that the Indian government has finalized nine trade agreements in recent years, encompassing 38 developed nations.

Raja Al Marzouqi, the chief negotiator for the GCC, stated that this pact is crucial amid global uncertainties, signaling the need for enhanced cooperation to mitigate risks to the global economy.

Ajay Bhadoo, Additional Secretary in the Department of Commerce, is leading India's negotiations for this agreement.

The initiation of FTA discussions marks a revival of negotiations that were previously held in 2006 and 2008, which were paused due to the GCC's decision to defer talks with various countries and economic groups.

India primarily imports crude oil and natural gas from the Gulf nations, including Saudi Arabia and Qatar, while exporting a variety of goods such as pearls, precious stones, metals, electrical machinery, and chemicals.

In the fiscal year 2024-25, India's exports to the GCC increased by nearly 1% to around USD 57 billion, while imports surged by 15.33% to USD 121.7 billion.

Bilateral trade has risen to USD 178.7 billion in 2024-25, up from USD 161.82 billion the previous year.

The UAE ranked as India's third-largest trading partner last fiscal year, with exports totaling USD 36.63 billion and imports at USD 63.40 billion, resulting in a trade deficit of USD 26.76 billion.

Saudi Arabia was 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 at USD 1.68 billion and imports at USD 12.46 billion, resulting in a trade deficit of USD 10.78 billion.

Oman ranked 28th, with exports of USD 4 billion and imports of USD 6.54 billion, leading to a trade deficit of USD 2.48 billion.

Kuwait was 29th, with exports of USD 1.93 billion and imports of USD 8.28 billion, resulting in a trade deficit of USD 6.35 billion.

Bahrain, India's 65th largest trading partner, saw exports of USD 797.47 million and imports of USD 843.44 million, leading to a trade deficit of USD 45.97 million.