India and Saudi Arabia are set to kickstart negotiations on the India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA).

India and Saudi Arabia are set to kickstart negotiations on the India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA). During a meeting between Prime Minister Narendra Modi and Crown Prince Mohammed bin Salman of Saudi Arabia, both leaders agreed to resume talks on this vital FTA.

Dr Ausaf Sayeed, Secretary (CPV & OIA) at the Ministry of External Affairs, stated that expediting these FTA negotiations would bolster economic cooperation between the two nations. He attributed the prior delay to a change in the chief negotiator for the GCC. However, with a new chief negotiator in place, discussions are set to regain momentum as both sides are keen to conclude the negotiations swiftly.

Resuming these talks presents exciting prospects for India and the Gulf Cooperation Council. The GCC comprises six Gulf nations: Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain. This region is India’s largest trading partner, with trade exceeding USD 240 billion in the 2022-23 fiscal year. Notably, trade with GCC countries alone accounted for over USD 184 billion. In this context, the UAE ranked as India’s third-largest trading partner, and Saudi Arabia as the fourth-largest in the previous fiscal year.

Several key focus areas have been identified for collaboration between India and the Arab world. These encompass food security, supply chains, healthcare, pharmaceuticals, energy security, renewable energy (including green hydrogen), chips, semiconductors, and technology (including fintech and edtech).

Furthermore, there’s substantial potential for collaboration in tourism, entertainment, and culture. Many governments in the region are keen about strengthening partnerships with India in these sectors.

India already has a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, in effect since May 1, 2022, offering preferential market access for over 97% of tariff lines. Meanwhile, discussions between India and the GCC on the Free Trade Agreement have resumed, with preliminary documents exchanged and delegations meeting. This represents a promising development, creating new opportunities for businesses on both sides.

It’s worth noting that negotiations for a free trade agreement between India and the GCC were revived in November of the previous year. Earlier, two rounds of FTA talks took place in 2006 and 2008, but the third round was deferred by the GCC.

India primarily imports crude oil and natural gas from Gulf nations like Saudi Arabia and Qatar, while exporting a range of products including pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel, and chemicals.

India-Saudi Arabia Bilateral Trade

Regarding bilateral trade between India and Saudi Arabia, both leaders expressed satisfaction with the trade volume achieved. India is the second-largest trading partner of Saudi Arabia, and Saudi Arabia is the fourth-largest trading partner of India. The bilateral trade reached more than USD 52 billion in the 2022-23 fiscal year, marking a remarkable 23% growth. Both sides intend to explore cooperation in the fintech sector and trade in local currencies. Furthermore, they emphasized the importance of ongoing collaboration to enhance and diversify their bilateral trade relationship.

https://www.financialexpress.com/business/defence-india-and-saudi-arabia-bolster-talks-for-game-changing-gcc-free-trade-agreement-3242565/