India mostly imports crude oil and natural gas from Gulf countries like Saudi Arabia and Qatar.
• According to experts, the GCC region has huge trade potential and a trade agreement will help boost India's exports to that market.
New Delhi: India and Gulf Cooperation Council (GCC) member countries are expected to start talks next month on a free trade agreement aimed at boosting economic ties.
The GCC is a federation of six Gulf countries – Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain.
"The terms of reference for the agreement are being finalized and we expect to start the talks next month," the official said.
India has already implemented a bilateral free trade agreement with the UAE in May this year.
According to experts, the GCC region has huge trade potential and a trade agreement will help boost India's exports to that market.
Rakesh Mohan Joshi, director, Indian Institute of Plantation Management, Bengaluru, said the GCC market has not been tapped by domestic exporters and has huge potential.
“GCC is a major import dependent region. We can increase our exports of food items, clothing and many other goods. Duty concessions under a trade agreement would help exploit that market. It will be a win-win situation for both the parties."
Sharad Kumar Saraf, Mumbai-based exporter and Founder President, Techno-Craft Industries India, said that GCC has emerged as a major trading partner for India and there is a huge potential for increasing investments between the two regions.
"The FTA will be of great benefit to both the parties," Saraf said.
Federation of Indian Export Organizations (FIEO) vice chairman Khalid Khan said the agreement will give a major boost to sectors such as chemicals, textiles, gems and jewelery and leather.
India mostly imports crude oil and natural gas from Gulf countries like Saudi Arabia and Qatar, and exports pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel and chemicals to these countries .
According to the commerce ministry, India's exports to the GCC grew by 58.26% to about $44 billion in 2021-22 from $27.8 billion in 2020-21.
The share of these six countries in India's total exports increased to 10.4% in 2021-22 from 9.51% in 2020-21.
Imports grew 85.8% to $110.73 billion as compared to $59.6 billion in 2020-21.
The share of GCC members in India's total imports increased to 18% in 2021-22 from 15.5% in 2020-21.
Bilateral trade increased to $154.73 billion in 2021-22 from $87.4 billion in 2020-21.
Apart from trade, the Gulf countries are host to a large Indian population.
Nearly half of the 32 million non-resident Indians (NRIs) are believed to be working in the Gulf countries.
These NRIs send a huge amount back home.
Saudi Arabia was India's fourth largest trading partner in the last financial year.
From Qatar, India imports 8.5 million tonnes of gas annually and exports products ranging from cereals to meat, fish, chemicals and plastics.
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