India and Gulf Cooperation Council Sign Terms of Reference for India–GCC Free Trade Agreement

India and the Gulf Cooperation Council have signed the Terms of Reference in New Delhi, formally launching negotiations for a Free Trade Agreement between India and the six-nation Gulf bloc.Framework for Negotiations: The ToR defines the scope, objectives, and modalities of the proposed FTA, covering trade in goods, services, and investment.Scale of Economic Engagement: India–GCC goods trade stood at USD 178.56 billion in FY 2024–25 (Exports: USD 56.87 bn; Imports: USD 121.68 bn), accounting for 15.42% of India’s global trade.Sectoral Coverage: Key sectors expected to benefit include food processing, infrastructure, petrochemicals, textiles, gems and jewellery, machinery, and ICT.Investment Linkages: The GCC is a major source of capital, with cumulative FDI inflows into India exceeding USD 31.14 billion.Institutional Continuity: India already has trade agreements with UAE and Oman and is in negotiations with Qatar, indicating growing economic integration with the region.

Significance

¨     Energy and Food Security: The FTA is expected to enhance the stability and diversification of India’s energy supplies from a region that is a major source of crude oil, natural gas, and petrochemicals, while positioning India as a reliable food supplier to the GCC.

¨     Geopolitical and Strategic Value: The agreement strengthens India’s engagement with a strategically vital region amid global economic uncertainty, reinforcing predictability and long-term partnership.

¨     Diaspora and Services Linkages: With nearly 10 million Indians living and working in GCC countries, the FTA can deepen services trade, remittances, and people-to-people ties.

¨ Growth and Employment: By improving market access and investment flows, the agreement is expected to boost manufacturing, infrastructure development, and job creation in both India and the GCC.

Gulf Cooperation Council (GCC)

¨     The Gulf Cooperation Council (GCC), formally known as the Cooperation Council for the Arab States of the Gulf, is a political and economic alliance of six Middle Eastern countries: Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain.

¨     It was established in May 1981 in Riyadh, Saudi Arabia, to promote unity and cooperation rooted in shared Arab and Islamic cultural identity.

Objectives

¨     As per Article 4 of the GCC Charter, the Council seeks to strengthen relations among member states and promote cooperation among their citizens across political, economic, security, and social domains.

¨     The presidency of the GCC rotates annually among member states.

¨  The bloc is a global energy giant, controlling approximately 30% of the world’s oil reserves and a significant portion of its natural gas. It has a combined GDP of over $2.25 trillion.

¨     It is governed by three main bodies: the Supreme Council (heads of state), the Ministerial Council (foreign ministers), and the Secretariat General (the administrative arm).

Some of the key Free trade agreements of India

¨     India–European Union (EU) FTA: Signed in January 2026 after nearly 20 years of talks, this deal eliminates tariffs on over 90% of goods and covers roughly 99.5% of India’s export value to the EU.

¨  India–Oman CEPA: Formally signed on December 18, 2025, this Comprehensive Economic Partnership Agreement (CEPA) grants duty-free access to 99.38% of Indian exports and is set for implementation in early 2026.

¨     India-UK FTA negotiations were launched in January 2022.

¨     The India-Australia Comprehensive Economic Cooperation Agreement (CECA) builds on the foundation laid by the India-Australia Economic Cooperation and Trade Agreement (ECTA), which came into force in December 2022.

¨     India-UAE Comprehensive Partnership Agreement (CEPA): It is in effect from May 2022.