New Delhi: India and the six-nation Gulf Cooperation Council (GCC) have formally kicked off negotiations for a free trade agreement (FTA) after signing the Terms of Reference (ToR) on February 5, marking a key step toward deepening one of India’s most consequential economic partnerships.
The ToR was signed at Vanijya Bhawan by Ajay Bhadoo, Additional Secretary and India’s chief negotiator, and Dr Raja Al Marzouqi, chief negotiator for the GCC Secretariat General, in the presence of Commerce and Industry Minister Piyush Goyal and other senior officials.
Calling the proposed pact a “force multiplier,” Goyal said the FTA would add predictability and stability to the relationship, enable seamless movement of goods and services, attract investments and expand job opportunities, while also strengthening food and energy security for the region. The ToR will define the scope and modalities of the negotiations, effectively setting the guardrails for the talks ahead.
From the GCC side, Al Marzouqi said the two sides share historic trade ties and that the signing of the ToR marks the formal start of negotiations toward a mutually beneficial agreement, especially significant amid global economic uncertainties. He also held discussions with Commerce Secretary Rajesh Agrawal on broadening the overall economic partnership and cooperation in areas of mutual interest.
The economic stakes are sizeable. India’s trade with the GCC stood at $178.56 billion in FY2024-25—exports of $56.87 billion and imports of $121.68 billion—accounting for 15.42% of India’s global trade. Over the last five years, bilateral trade has grown at an average annual rate of 15.3%, underlining the region’s importance to India’s external commerce.
India’s key exports to the GCC include engineering goods, rice, textiles, machinery, and gems and jewellery, while imports are dominated by crude oil, LNG, petrochemicals and precious metals such as gold. The GCC, with a combined market of about 61.5 million people and a GDP of $2.3 trillion, is also a significant source of foreign direct investment for India, with cumulative inflows exceeding $31.14 billion as of September 2025.
Beyond trade and capital flows, people-to-people links remain a cornerstone of the relationship, with nearly 10 million Indians living and working across the GCC and a strong presence of Indian companies in the region—ties policymakers hope the FTA negotiations will further institutionalise and expand.