India and the Gulf Cooperation Council (GCC) member countries are expected to start negotiations for a free trade agreement next month with the aim of boosting economic ties between the two regions, PTI reported quoting official sources.
The Gulf Cooperation Council (GCC) is a political and economic union of Arab states bordering the Gulf. It was established in 1981 and its 6 members are the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain.
"Terms of reference for the agreement are being finalised and we expect to launch the negotiations next month," the official said.
India has already implemented a free trade pact with the UAE in May this year. According to experts, the GCC region holds huge trade potential, and a trade agreement would help further boost India's exports to that market, the report said.
The share of GCC nations 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 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, up from USD 87.4 billion in 2020-21.
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.
According to a November 2021 report from the World Bank, India received USD 87 billion in foreign remittances in 2021. Of this, a sizeable portion came from the GCC nations.
Saudi Arabia was India's fourth-largest trading partner last fiscal. From Qatar, India imports 8.5 million tonnes a year of LNG and exports products ranging from cereals to meat, fish, chemicals, and plastics.
Kuwait was the 27th largest trading partner of India in the last fiscal, while the UAE was the third-largest trading partner in 2021-22.
Meanwhile, after a decade of negotiations, Australia has signed a historic free trade deal with India, reducing its economic dependence on China.
On April 02, 2022, India and Australia signed an Interim Economic Cooperation and Trade Agreement (ECTA). According to media reports, this is the first bilateral trade agreement of India with a developed country in the last decade.
Indian exports to Australia are up 104.8 per cent year on year, while Australian imports to India are up 99.5 percent year on year, according to data from the Ministry of Commerce and Industry.
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