Highlights:

India and the Gulf Cooperation Council have signed the Terms of Reference to start FTA negotiations
The GCC includes Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain
India–GCC trade exceeds $170 billion annually
Talks follow recent trade agreements involving India, the EU, and the United States
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The move reinforces India’s strategic and economic presence in the Gulf region

India has formally launched negotiations for a free trade agreement with the Gulf Cooperation Council, marking a further step in the country’s expanding global trade strategy. On Thursday (5), Commerce and Industry Minister Piyush Goyal confirmed that India and the six-member Gulf bloc had signed the Terms of Reference for the proposed agreement, clearing the way for structured talks on trade, investment, and wider economic cooperation.

The signing of the Terms of Reference sets the framework for negotiations and outlines the scope, objectives, and process for discussions between India and the GCC. According to officials, the agreement will cover goods, services, investment flows, and related regulatory issues, with an emphasis on improving market access and reducing trade barriers.

India’s evolving global trade strategy

The move comes at a time when India is actively pursuing multiple trade engagements to strengthen its position in the global economy. In recent weeks, New Delhi has concluded negotiations with the European Union and finalized a trade agreement with the United States. The launch of talks with the GCC reflects a broader shift toward a more proactive and outward-facing trade policy.

By advancing negotiations with partners across Europe, North America, and the Gulf, India is seeking to diversify its trade relationships while reducing dependence on any single region. Officials view the GCC talks as a key component of this approach, given the bloc’s economic weight and strategic importance.

India and the GCC: economic context

The Gulf Cooperation Council comprises Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman, and Bahrain. Established in 1981, the bloc was formed to promote economic, political, and social cooperation among its member states. Over the years, the GCC has emerged as a major global center for energy production, financial services, infrastructure investment, and logistics.

These sectors closely align with India’s economic priorities. The Gulf region is central to India’s energy imports, while India remains an important source of skilled labor, food supplies, and infrastructure expertise for Gulf economies. Bilateral trade between India and the GCC has consistently exceeded $170 billion annually in recent years, underscoring the scale of the relationship.

India’s long-standing engagement with the Gulf

Formal trade talks between India and the GCC were first launched in 2004. However, negotiations were suspended in 2011 after the GCC paused its global trade discussions. Dialogue resumed in 2022, and the signing of the Terms of Reference represents the most concrete progress in over a decade.

The first round of negotiations is expected to take place in Riyadh in the coming months. Ajay Bhadoo will lead the India negotiating team, while Raja Al Marzouqi will head the delegation for the GCC. Officials from both sides have indicated that talks will proceed in phases, focusing initially on priority sectors.

India, trade, and people-to-people ties

Beyond trade volumes, India’s relationship with the Gulf is shaped by deep social and demographic connections. Around 10 million Indians live and work across GCC countries, making the region home to one of the largest overseas Indian communities. Remittances from the Gulf play a significant role in supporting households and regional economies within India.

The Gulf is also critical to India’s energy security, supplying a large share of crude oil and natural gas imports. In return, India contributes to food security, infrastructure development, and service sector growth in Gulf economies. These interdependencies strengthen the case for a comprehensive trade agreement.

Highlighting the historical depth of ties, Goyal said India and the Gulf have traded with each other “for over 5,000 years.” He added that a formal agreement would support smoother movement of goods and services, improve policy certainty, and encourage stronger investment flows between the two sides.

India’s existing Gulf trade agreements

Within the GCC, the United Arab Emirates is India’s largest trading partner, followed by Saudi Arabia. India already has a free trade agreement with the UAE and a Comprehensive Economic Partnership Agreement with Oman. A GCC-wide agreement would build on these existing frameworks and provide a unified structure for trade across the region.

Officials describe the GCC negotiations as a logical next step that could simplify rules of origin, align standards, and reduce transaction costs for businesses operating across multiple Gulf markets.

Strategic implications for India

The launch of FTA talks with the GCC carries strategic as well as economic significance. As global trade patterns shift and geopolitical uncertainty affects supply chains, India is positioning itself as a stable and reliable economic partner in the Gulf. Deeper integration with the region strengthens India’s role in energy markets, logistics networks, and regional investment flows.

By restarting and formalizing negotiations with the GCC, India signals that it intends to play a more active role in shaping trade rules and expanding its influence across key regions. The talks reflect a broader strategy aimed at securing long-term growth, enhancing competitiveness, and reinforcing India’s standing in the global trading system.