BackIndia, GCC members may launch free trade negotiations next month
According to experts, the GCC region holds huge trade potential and a trade agreement would help boost India’s exports to that market
PremiumNEW DELHI : India and Gulf Cooperation Council (GCC) member-countries are expected to start talks on a free trade pact next month with an aim to boost economic ties, an official said.
GCC is a union of six Gulf countries—Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
“Terms of reference for the agreement are being finalized and we expect to launch the negotiations next month," the official said.
India has already implemented a bilateral free trade pact with the UAE in May this year.
According to experts, the GCC region holds huge trade potential and a trade agreement would help boost India’s exports to that market.
Rakesh Mohan Joshi, director, Indian Institute of Plantation Management, Bengaluru, said the GCC market is unexploited by domestic exporters and holds huge 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.
Mumbai-based exporter and founder chairman of Techno-craft Industries India, Sharad Kumar Saraf said the GCC has emerged as a major trading partner for India and there is a huge potential for increasing investments between the two regions.
“FTA will have a major benefit for both the sides," Saraf said.
Federation of Indian Exports Organization (FIEO) vice chairman Khalid Khan said sectors like chemicals, textiles, gems and jewellery and leather will get a major impetus by this agreement.
India imports mostly crude oil and natural gas from Gulf nations 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.
India’s exports to the GCC increased by 58.26% to about $44 billion in 2021-22 from $27.8 billion in 2020-21, according to the commerce ministry.
The share of these six countries in India’s total exports has risen to 10.4% in 2021-22 from 9.51% in 2020-21.
Imports rose by 85.8% to $110.73 billion compared to $59.6 billion in 2020-21.
The share of GCC members in India’s total imports rose to 18% in 2021-22 from 15.5% in 2020-21.
Bilateral trade has increased to $154.73 billion in 2021-22 from $87.4 billion in 2020-21.
Besides trade, Gulf nations are host to a sizeable Indian population.
Out of about 32 million non-resident Indians (NRIs), nearly half are thought to be working in Gulf countries.
These NRIs send a significant amount of money back home.
Saudi Arabia was India’s fourth-largest trading partner last fiscal.
From Qatar, India imports 8.5 million tonnes a year of gas and exports products ranging from cereals to meat, fish, chemicals and plastics.
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