India and the six-member Gulf Cooperation Council (GCC) are set to formally relaunch negotiations for a Free Trade Agreement (FTA), more than two decades after the first attempt was initiated. The two sides are scheduled to sign the Terms of Reference (ToR) for the proposed agreement on Thursday, marking the formal start of negotiations.
The ToR will define the framework, scope, objectives and procedural roadmap for the talks. The signing represents the first official step towards negotiations between India and the GCC, which comprises Saudi Arabia, the United Arab Emirates (UAE), Oman, Qatar, Bahrain and Kuwait.
The GCC is a key trade and economic partner for India, especially for the textile and apparel industry. Apparel exports from India to the GCC stood at US $ 1.79 billion in 2024–25.
India has already concluded free trade agreements with individual GCC members, including the UAE and Oman, and is in discussions with Qatar to lay the groundwork for initiating formal negotiations. With Bahrain, draft ToR have been exchanged for the launch of talks on a Comprehensive Economic Partnership Agreement (CEPA).
The push for a broader India–GCC FTA revives an earlier effort that began in August 2004, when the two sides signed a Framework Agreement on Economic Cooperation. This paved the way for FTA negotiations, with two rounds of talks held in 2006 and 2008. However, in 2009, the GCC suspended negotiations with all trading partners, bringing the process to a halt.
Among GCC members, the UAE is India’s largest trading partner, with apparel trade valued at US $ 1.22 billion in FY 2024-2025 followed by Saudi Arabia at US $ 360.11 million in FY 2024-2025. The region is also a significant source of foreign direct investment into India, with inflows totalling approximately US $ 31 billion between April 2000 and September 2025.
The formal launch of FTA negotiations is expected to strengthen economic integration between India and the Gulf region, with potential implications for trade, investment flows and labour mobility.
