India and the Gulf Cooperation Council (GCC) have taken the first formal step to restart negotiations for a Free Trade Agreement (FTA), signing the terms of reference (ToR) on Thursday to begin talks.
The ToR lay down the scope and modalities of the proposed trade pact. Commerce and industry minister Piyush Goyal presided over the signing ceremony of the ToRs with the GCC.
GCC is a union of six countries in the Gulf region - Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain. Goyal said that the agreement will help boost bilateral trade and investments between the two.
He added that about 10 million Indians are living and working in the GCC region. The move marks a return to negotiations that began nearly two decades ago.
India and the GCC held two rounds of talks in 2006 and 2008, but the process stalled after the bloc decided to defer negotiations with all countries and economic groups. The current initiative is being seen as a resumption of those discussions.
India already has a trade agreement in place with one GCC member. The free trade pact with the UAE came into force in May 2022.
More recently, India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on December 18, 2025.
Trade between India and the Gulf has expanded steadily, driven largely by energy imports and a broad basket of Indian exports. India imports mainly crude oil and natural gas from countries such as Saudi Arabia and Qatar.
Its exports to the region include pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel, and chemicals.
In 2024-25, India’s exports to the GCC grew by about one per cent to around USD 57 billion, up from USD 56.32 billion in 2023-24.
Imports rose by 15.33 per cent to USD 121.7 billion from USD 105.5 billion in the previous fiscal. Bilateral trade stood at USD 178.7 billion in 2024-25, compared with USD 161.82 billion a year earlier.
The UAE emerged as India’s third-largest trading partner in the last fiscal. Exports to the country were valued at USD 36.63 billion, while imports stood at USD 63.40 billion, resulting in a trade deficit of USD 26.76 billion in 2024-25.
Saudi Arabia was India’s fifth-largest trading partner during the same period. Exports to the kingdom were USD 11.75 billion, while imports reached USD 30.12 billion, leading to a trade deficit of USD 18.36 billion.
Qatar ranked as India’s 22nd-largest trading partner in 2024-25. Exports stood at USD 1.68 billion, while imports were USD 12.46 billion, leaving a trade deficit of USD 10.78 billion.
India mainly imports liquefied natural gas (LNG) from Qatar and exports cereals, meat, fish, chemicals and plastics. Oman was India’s 28th-largest trading partner in 2024-25.
Exports were valued at USD 4 billion, while imports aggregated USD 6.54 billion, with a trade deficit of USD 2.48 billion. Kuwait ranked 29th among India’s trading partners.
Exports stood at USD 1.93 billion, while imports were USD 8.28 billion, leading to a trade deficit of USD 6.35 billion. Bahrain, India’s 65th-largest trading partner, recorded exports from India worth USD 797.47 million in the last fiscal.
Imports were USD 843.44 million, leaving a trade deficit of USD 45.97 million in 2024-25.
