India-GCC Free Trade Agreement, Significance, India-GCC Relations

India and the Gulf Cooperation Council (GCC) have signed a Joint Statement to move forward with negotiations on a comprehensive India-GCC Free Trade Agreement (FTA), following the earlier agreement on the Terms of Reference. This development marks an important step in strengthening economic cooperation between India and the Gulf region, which has long been a key partner in trade, energy, and people-to-people relations.

India-GCC Free Trade Agreement Significance 

The India-GCC Free Trade Agreement is expected to serve multiple objectives:

• Trade Expansion and Diversification: The agreement will likely reduce tariffs and non-tariff barriers, facilitating expansion and diversification of exports.
• Energy Security and Stability: Given India’s heavy dependence on Gulf energy imports, the FTA can ensure long-term supply stability.
• Investment Promotion: Greater predictability and regulatory certainty can boost bilateral investment flows.
• Supply Chain Resilience: Amid global uncertainties, a structured trade framework can strengthen supply chains and economic resilience.
• Boost to Indian Businesses: Improved market access in a high-income region can benefit sectors like engineering, textiles, and gems & jewellery.

About the Gulf Cooperation Council (GCC)

• The Gulf Cooperation Council (GCC) is a regional political and economic alliance established in 1981.
• It comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
• The organisation was formed in the backdrop of regional instability, including the Iranian Revolution of 1979 and the Iran-Iraq War (1980-1988), with the objective of promoting economic integration, security cooperation, and cultural coordination among member states.
• It is headquartered in Riyadh, Saudi Arabia.
• The Supreme Council, consisting of the heads of member states, is its highest decision-making body and functions on a rotating presidency basis.

The Gulf Cooperation Council (GCC) region represents a significant market of 61.5 million people and has a combined GDP of about USD 2.3 trillion, ranking ninth globally. 

‹ ›

India-GCC Relations 

• The GCC is India’s largest trading partner bloc, accounting for 15.42% of India’s total global trade.
• Bilateral trade stood at USD 178.56 billion in FY 2024-25, with exports of USD 56.87 billion and imports of USD 121.68 billion. 
• Over the past five years, trade between the two sides has grown steadily at an average annual rate of 15.3%, reflecting deepening economic engagement.
• India’s exports to the GCC mainly include engineering goods, rice, textiles, machinery, and gems and jewellery.
• India’s imports are largely energy-driven, consisting of crude oil, LNG, petrochemicals, and gold.
• It is also an important source of foreign investment for India, with cumulative FDI exceeding USD 31.14 billion as of September 2025.
• Nearly 10 million Indians live and work in GCC countries. This large diaspora acts as a living bridge between the two regions, strengthening social, cultural, and economic connections. The strong presence of Indian professionals and companies across the Gulf further deepens bilateral engagement.

Conclusion 

The India-GCC Free Trade Agreement can deepen an already strong partnership between India and the Gulf region. By expanding trade, ensuring energy security, attracting investment, and supporting Indian businesses and diaspora, the agreement can strengthen India’s economic growth and strategic presence in West Asia.