• India and the Gulf Cooperation Council (GCC) have agreed to pursue a free trade agreement (FTA) between the two regions and resume the negotiations, Commerce and Industry Minister Piyush Goyal said.

• GCC is a union of six countries in the Gulf region — Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain. 

• The GCC is India’s largest trading bloc.

• Both sides agreed to expedite conclusion of the requisite legal and technical requirements for formal resumption of the FTA negotiations. 

• Both sides held negotiations for the trade pact in 2006 and 2008 but talks stalled thereafter due to unknown reasons.

• The FTA is envisaged to be a comprehensive agreement with substantial coverage of goods and services. 

• Both sides emphasized that the FTA will create new jobs, raise living standards, and provide wider social and economic opportunities in India and all the GCC countries. 

• Both sides agreed to significantly expand and diversify the trade basket in line with the enormous potential that exists on account of the complementary business and economic ecosystems of India and the GCC. 

What is the Gulf Cooperation Council?

• The Gulf Cooperation Council (GCC) was established by an agreement concluded on May 25, 1981 in Riyadh among Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE in view of their special relations, geographic proximity and similar political systems.

• GCC comprises some of the fastest growing economies in the world, mainly due to an increase in oil and natural gas revenues coupled with a building and investment boom backed by reserves, etc.

The GCC Charter states that the basic objectives are to:

• Have coordination, integration and inter-connection between Member States in all fields. 

• Strengthen ties between their peoples.

• Formulate similar regulations in various fields such as economy, finance, trade, customs, tourism, legislation, administration.

• Foster scientific and technical progress in industry, mining, agriculture, water and animal resources.

• Establish scientific research centres.

• Set up joint ventures.

• Encourage cooperation of the private sector.

The structure of the GCC consists of:

• The Supreme Council which comprises the Heads of State of the six member countries.

• The Ministerial Council which comprises the foreign ministers of the six member countries.

• The Secretariat General which prepares reports, studies, accounts and budgets for the GCC.

• The Secretariat is located in Riyadh. 

India and the GCC

• The Gulf Cooperation Council (GCC) as a collective entity has tremendous significance for India. 

• India has a close and strong relationship with the Gulf region which has remained a region of prime importance in our extended neighborhood. 

• Bilateral friendly ties with each of the Gulf countries are deep-rooted in shared history and have been constantly nourished through growing multidimensional cooperation and vibrant people-to-people engagement.

• There has been an unprecedented boost in political and economic engagement with the Gulf region over the past few years. With sustained efforts and focused engagement, the traditional buyer-seller relationship (basically focused on energy supplies) has been transformed into a strategic engagement. 

• India’s old, historical ties with the GCC states, coupled with increasing imports of oil and gas, growing trade and investment, and the presence of approximately 6.5 million Indian workers in the region, are of vital interest to India.

• India’s economic linkage with the GCC has increased steadily, especially due to the growth in oil imports. 

• The Gulf region is one of the largest trading partners of India 

• India’s exports to the GCC member countries grew by 58.26 per cent to about $44 billion in 2021-22 against $27.8 billion in 2020-21.

• Bilateral trade in goods has increased to $154.73 billion in 2021-22 from $87.4 billion in 2020-21. Services trade between the two regions was valued at around $14 billion in 2021-22, with exports aggregated at $5.5 billion and imports at $8.3 billion.

• GCC countries contribute almost 35 per cent of India's oil imports and 70 per cent of its gas imports. India's overall crude oil imports from the GCC in 2021-22 were about $48 billion, while LNG and LPG imports in 2021-22 stood at about $21 billion.

• Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in the Gulf countries.

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