GCC Eyes Free Trade Agreement with India in 2025: Key Developments at Kochi Dialogue

TDT | Manama

Email: mail@newsofbahrain.com

The Gulf Cooperation Council (GCC) is set to initiate long-awaited free trade negotiations with India this year, according to its Secretary-General Jasem Mohamed Al-Budaiwi. The announcement was made during the Kochi Dialogue diplomacy conclave held on January 16-17, 2025, in Kochi, Kerala. This milestone reflects the growing importance of economic and diplomatic ties between India and the GCC.

Kochi Dialogue: Strengthening Regional and Global Ties

Themed “India’s Look West Policy in Action: People, Prosperity and Progress,” the forum was organized by India’s Ministry of External Affairs in collaboration with the Centre for Public Policy Research. It brought together government officials, business leaders, and diplomats from India, GCC nations (Oman, Kuwait, Bahrain, Qatar, Saudi Arabia, and the UAE), as well as representatives from Australia, Malaysia, and Sri Lanka.

As a key speaker, Al-Budaiwi emphasized the strategic significance of India-GCC relations and outlined plans to advance cooperation, including the initiation of free trade agreement (FTA) talks. “Expanding free trade negotiations will pave the way for economic integration, removing trade barriers, expanding cooperation in digital economies, and transforming industries. I also hope that we hold our first round of FTA negotiation this year, 2025,” Al-Budaiwi told the participants.

Robust Economic Ties Between India and the GCC

Economic collaboration forms the cornerstone of India-GCC relations. In 2024, the value of annual trade between the two sides exceeded $160 billion, with GCC exports to India accounting for $90 billion—representing 71% of the bloc’s total exports.

“This underscores the significant importance of this cooperation,” Al-Budaiwi said. “Trade between the two sides includes a diverse area of industrial and agricultural products, contributing to economic integration and creating opportunities for growth and market expansion.”

The GCC’s investment in India has surpassed $5.7 billion across various projects. These investments have not only fostered economic growth but also created jobs and enhanced market opportunities, making India a key trading partner for the bloc.

Long Road to a Comprehensive Trade Agreement

India and the GCC signed a Framework Agreement on Economic Cooperation in 2004, but efforts to formalize a comprehensive FTA have been slow. Previous negotiation rounds in 2006 and 2008 failed to yield conclusive results. Currently, India has a free trade agreement with only one GCC country, the UAE, under the Comprehensive Economic Partnership Agreement signed in 2022.

A potential FTA with the entire GCC could open significant opportunities for India, including access to a large, affluent market and concessions on visas. The Gulf region is home to approximately nine million Indian expatriates, making it a vital economic and cultural hub for India.

Looking Ahead

The GCC’s renewed focus on trade negotiations with India highlights the bloc’s commitment to deepening economic and strategic ties. With the first round of negotiations anticipated this year, the collaboration could pave the way for transformative growth in bilateral trade and investment.

By fostering closer cooperation, the GCC and India aim to create a partnership that drives prosperity and progress for both regions, aligning with the broader goals of the Kochi Dialogue.