India and the Gulf Cooperation Council (GCC) will announce the launch of negotiations for a free trade agreement on Thursday, which aims at promoting two-way commerce and investments between the regions, an official said.
GCC is a union of six countries in the Gulf region -- Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain.
India's exports to the GCC member countries grew by 58.26 per cent to about USD 44 billion in 2021-22, as against USD 27.8 billion in 2020-21, according to data from the commerce ministry.
The share of GCC members in India's total imports rose to 18 per cent in 2021-22, from 15.5 per cent in 2020-21.
Bilateral trade has increased to USD 154.73 billion in 2021-22, from USD 87.4 billion in 2020-21.
"GCC officials will be here for the announcement," the official said.
India has already implemented a free trade pact with the UAE in May this year.
This would be a kind of resumption of FTA talks as earlier two rounds of negotiations had been held in 2006 and 2008 between India and GCC. Third round did not happen as GCC deferred its negotiations with all countries and economic groups.
India imports predominately crude oil and natural gas from the 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.
Besides trade, Gulf nations are host to a sizeable Indian population. Out of about 32 million non-resident Indians (NRIs), nearly half are estimated to be working in Gulf countries.
These NRIs send a significant amount of money back home.
According to a November 2021 report of the World Bank, India got USD 87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations.
Bangalore-based Indian Institute of Plantation Management (IIPM) Director Rakesh Mohan Joshi said that the Gulf region holds enormous potential for Indian exporters.
"India needs to have a long-term strategy to capture this market and FTA will definitely help in that," Joshi said.
According to commerce ministry data, the share of these six countries in India's total exports has risen to 10.4 per cent in 2021-22, from 9.51 per cent in 2020-21.
Similarly, imports rose by 85.8 per cent to USD 110.73 billion, compared to USD 59.6 billion in 2020-21, the data showed.
The UAE was the third-largest trading partner of India in 2021-22. India's bilateral trade with the nation increased to USD 72.9 billion in 2021-22 as compared to USD 43.3 billion in 2020-21.
Saudi Arabia was the fourth-largest trading partner last fiscal. Total bilateral trade has increased to about USD 43 billion in 2021-22, from USD 22 billion a year ago.
India imports 8.5 million tonnes a year of LNG from Qatar and exports products ranging from cereals to meat, fish, chemicals, and plastics. Two-way commerce between India and Qatar rose to USD 15 billion in 2021-22 from USD 9.21 billion in 2020-21.
Kuwait was the 27th largest trading partner of India in the last fiscal. Bilateral trade has jumped to USD 12.3 billion in 2021-22, as compared to USD 6.3 billion in 2020-21.
Oman was the 31st largest trading partner of India in 2021-22. Bilateral trade with the nation has increased to about USD 10 billion in 2021-22, as compared to USD 5.5 billion in 2020-21.
Two-way commerce between Bahrain and India stood at USD 1.65 billion in 2021-22 as against USD 1 billion in 2020-21.
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First Published: Nov 23 2022 | 2:32 PM IST