India’s New Trade Push With GCC
India has taken a major stride in global trade by formally launching negotiations for a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC), following recent trade milestones with the European Union (EU) and the United States. This marks another milestone in India’s expanding role as a deal-maker on the world stage.
On 5 February 2026, India’s Union Commerce and Industry Minister Piyush Goyal presided over an official ceremony in New Delhi where India and the GCC signed the Terms of Reference (ToR)—a formal foundation that outlines the scope and modalities for upcoming FTA negotiations. This is a crucial first step toward finalizing a comprehensive free trade pact.
Who Are the GCC Member States?
The Gulf Cooperation Council is an economic and political alliance of six countries in the Arabian Peninsula:
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Saudi Arabia
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United Arab Emirates (UAE)
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Qatar
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Kuwait
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Oman
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Bahrain
Collectively, these nations make up one of India’s most significant trading partners, with total bilateral trade exceeding USD 170–178 billion in the fiscal year 2024-25. The UAE alone accounts for over USD 100 billion in annual trade with India.
What the ToR Signing Means
The Terms of Reference are not the final agreement but set the framework to begin formal negotiations. They define:
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The scope of the proposed FTA
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Objectives, timelines, and procedures for talks
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Key sectors to be included in discussions
This official start follows two decades of intermittent talks between India and the GCC and represents renewed momentum to deepen economic ties, reduce tariffs, and facilitate investment and trade flows.
Trade and Market Access
Once concluded, the agreement is likely to:
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Reduce or eliminate tariffs on key goods and services
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Improve market access for Indian exports
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Boost competitiveness in sectors such as petrochemicals, food processing, infrastructure, and ICT.
Energy Security and Strategic Partnerships
GCC countries are major energy producers. Greater trade cooperation may help India diversify and secure long-term energy supplies, especially important given global market uncertainties.
People-to-People & Investments
With millions of Indian workers living and working in the Gulf region, the agreement stands to enhance remittances and strengthen social ties. It is also expected to attract investment into Indian infrastructure and technology sectors.
India’s Broader Free Trade Strategy
The GCC agreement builds on India’s recent trade breakthroughs:
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A long-awaited FTA with the European Union concluded in January 2026, ending nearly two decades of negotiations.
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Ongoing discussions with the United States on a bilateral trade deal.
These negotiations reflect India’s broader strategy to integrate more deeply into global markets and bolster its role in international supply chains.
Looking Forward
Negotiations for the India-GCC FTA may take time and involve detailed discussions across tariff schedules, services, investment, intellectual property, and regulatory frameworks. However, the formal start signals a new chapter in India’s trade diplomacy, positioning the country as a major deal-maker with diversified global partners.
