Amid a delay in signing of the India-UK free trade agreement (FTA), New Delhi has started negotiations with the Gulf Cooperation Council (GCC) for a trade treaty. GCC is a grouping of Gulf nations which includes Qatar, Oman and Bahrain, Saudi Arabia, and UAE.
It is to be noted that India signed a bilateral trade agreement with UAE in May.
A potential India-GCC trade agreement will boost economic cooperation between the two regions and help India increase its footprint in global trade.
An Indian government official told news agency PTI that deal terms are being finalised and negotiations are likely to begin next month.
During former UK prime minister Boris Johnson’s visit to India in April this year, the two countries agreed to sign a bilateral trade deal by Diwali this year; however, negotiations derailed towards the end and the deadline was postponed. A number of factors are believed to have derailed the signing of the deal. These include UK’s protective tariffs to restrict steel imports and India’s demand for easier access to the UK for students and IT workers—an ask that Suella Braverman, UK’s Home Secretary is opposed to, and whose comments on the matter reportedly angered New Delhi.
Prime Minister Narendra Modi on Thursday spoke with the newly elected prime minister of UK Rishi Sunak. According to an official statement, the two leaders vowed to work together to strengthen the India-UK relationship and securing a comprehensive free trade agreement.
Experts view the GCC as a crucial trade partner and an FTA would help India increase its exports significantly. Bilateral trade between the two regions increased to $154.73 billion in 2021-22 from $87.4 billion a year ago. India’s GCC exports increased over 58% to $44 billion in 2021-22 from $27.8 billion in 2020-21.
India’s share of exports to GCC as compared to overall exports rose to 10.1%in 2021-22 from 9.51% a year ago. Similarly, imports rose by 85.8% to $110.73 billion compared to $59.6 billion in 2020-21.
