New Delhi: In order to strengthen economic connections between the two regions, India and the GCC members are anticipated to begin talks for a free trade deal next month, an official said.
GCC is an association of six Gulf nations, including Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain.
“Terms of reference for the agreement are being finalised and we expect to launch the negotiations next month,” the official said.
A free trade agreement between India and the UAE was already put into effect in May of this year.
Experts claim that the GCC region has enormous trade potential, and that a trade deal will assist to increase India’s exports to that market.
The GCC market is underutilised by domestic exporters, according to Rakesh Mohan Joshi, Director, Indian Institute of Plantation Management, Bangalore, and it has enormous potential.
“GCC is a major import dependent region. We can increase our exports of food items, clothing and several other goods. Duty concessions under a trade agreement will help in tapping that market. It will be a win-win situation for both sides,” Joshi said.
Sharad Kumar Saraf, a Mumbai-based exporter and the founding chairman of Techno-craft Industries India, claimed that the GCC has grown to be a significant commercial partner for India and that there is great potential for boosting investment between the two areas.
“FTA will have a major benefit for both the sides,” Saraf said.
Khalid Khan, vice chairman of the Federation of Indian Exports Organisation (FIEO), agreed, stating that this agreement will have a significant impact on the chemical, textile, gem and jewellery, and leather industries.
India primarily buys crude oil and natural gas from the Gulf countries, such as Saudi Arabia and Qatar, and exports to these nations electrical machinery, iron, steel, chemicals, pearls, precious and semi-precious stones, metals, and imitation jewellery.
According to figures from the commerce ministry, India’s exports to the GCC rose by 58.26% to around USD 44 billion in 2021–22 from USD 27.8 billion in 2020–21.
The overall exports from India to these six nations increased from 9.51 percent in 2020–21 to 10.4 percent in 2021–22. Similarly, imports increased by 85.8% to 110.73 billion USD from 59.6 billion USD in 2020–21, according to the data.
GCC members’ percentage of all imports into India increased from 15.5 percent in 2020–21 to 18 percent in 2021–22. From USD 87.4 billion in 2020–2021 to USD 154.73 billion in 2021–2022 is the increase in bilateral trade.
In addition to trade, the Gulf region is home to a sizable Indian population. Nearly half of the 32 million non-resident Indians (NRIs) are thought to be employed in Gulf states.
These NRIs frequently send large sums of money home.