RIYADH: Talks between India and the Gulf Cooperation Council (GCC) on a free trade agreement will begin today. India’s trade with the GCC, a union of six countries in the Gulf region – Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain has grown considerably in recent times. India and the GCC are entering into negotiations on a free trade agreement with the aim of giving more impetus to this.
Trade between the two countries was $27.8 billion in 2020-21 and increased by 58.26 percent to $44 billion in 2021-22. The share of GCC members in India’s total imports has increased from 15.5% in 2020-21 to 18% in 2021-22. Bilateral trade has increased from $87.4 billion in 2020-21 to $154.73 billion in 2021-22.
Citing sources, The Hindu reports that GCC officials will visit India for the announcement of the Free Trade Agreement. In May this year, India had reached an agreement on a free trade agreement with the UAE. Earlier, in 2006 and 2008, there were two rounds of talks between India and the GCC, but no final decision could be reached.
The third round of talks with India did not take place because the GCC postponed talks with all countries and economic groups. India exports precious and non-precious stones, metals, jewellery, electrical machinery, metals (mainly iron and steel), foodstuffs etc.
Apart from trade, almost half of the nearly 32 million non-resident Indians (NRIs) work in the Gulf countries. A significant share of India’s foreign exchange inflows is the amount they send here. According to a November 2021 report by the World Bank, a major share of India’s remittances of $87 billion in 2021 came from the Gulf region.
Rakesh Mohan Joshi, director of Bangalore-based Indian Institute of Plantation Management (IIPM) says that Indian exporters have great potential in the Gulf region. Joshi said India needs a long-term strategy to capture this market and free trade will definitely help in that.
According to Commerce Ministry data, the share of these six countries in India’s total exports has increased from 9.51% in 2020-21 to 10.4% in 2021-22. India’s bilateral trade with the country rose to $72.9 billion in 2021-22 from $43.3 billion in 2020-21.
Total bilateral trade has increased to around $43 billion in 2021-22, up from just $22 billion a year ago. India imports 8.5 million tonnes of LNG annually from Qatar and exports products ranging from grains to meat, fish, chemicals and plastics.
Two-way trade between India and Qatar has increased to $15 billion in 2021-22 from $9.21 billion in 2020-21. Bilateral trade has increased to $12.3 billion in 2021-22 from $6.3 billion in 2020-21.
Bilateral trade with the country has increased from $5.5 billion in 2020-21 to nearly $10 billion in 2021-22. Trade between Bahrain and India was $1.65 billion in 2021-22, up from $1 billion in 2020-21. It is expected that this will be a big advantage if the free trade agreement is reached.