India and Gulf bloc including UAE and Saudi agree trade terms
The move follows India finalising a free trade pact with the EU and concluding a separate trade agreement with the United States
India and the Gulf Cooperation Council have agreed on terms to begin talks for a free trade agreement. Union minister Piyush Goyal shared the news on Thursday. He said both sides signed the Terms of Reference, which sets the ground rules for negotiations.
The move comes only days after India closed two major trade deals. One was a free trade pact with the European Union. The other was a trade agreement with the United States. Together, these steps show India pushing hard to expand its global trade reach.
The GCC is a six nation bloc. It includes the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman. These countries are key partners for India, especially in energy and trade. The agreement signals a fresh push to deepen those ties.
Goyal said the planned trade deal with the Gulf bloc would be strong and wide ranging. He said it would allow goods and services to move more freely between the regions. He also said it would help attract more investment on both sides. According to him, the goal is to build long term trust and balance.
News agency Reuters quoted Goyal as saying the pact would also help India diversify its energy sources. This comment drew attention because of recent claims by former US President Donald Trump. Trump had said India would cut its energy ties with Russia after the India US trade deal. Indian officials have not confirmed that claim.
India depends heavily on imported energy. Gulf nations play a major role in meeting that need. Saudi Arabia and Qatar are among India’s top suppliers of crude oil and natural gas. A trade deal with the GCC could help ensure steady supply and better terms.
The new agreement also marks progress after a long pause. India and the GCC had earlier discussed a trade pact in 2006 and 2008. Those talks did not lead to a final deal. The current move shows both sides are ready to restart the process with fresh intent.
This step fits into a larger pattern. India has been actively building economic links across regions. In recent years, it has signed trade agreements with countries in Asia, Europe, and the Middle East. Officials say these deals help boost exports and create jobs at home.
The India GCC move also follows a recent high level visit. The visit drew attention because it was very short. He stayed in India for about three hours.
During that time, the UAE President met Prime Minister Narendra Modi. The two leaders reviewed the full range of ties between India and the UAE. They discussed trade, investment, energy, and people to people links. The meeting was brief but seen as meaningful.
India and the UAE already share strong economic relations. Many see the GCC talks as a way to expand that success across the wider Gulf region.
India already has deep trade ties with several GCC members. From countries like Saudi Arabia and Qatar, India imports large amounts of oil and gas. These imports are vital for running industries and transport across India.
In return, India exports many goods to the Gulf. These include pearls, precious and semi precious stones, metals, imitation jewellery, and electrical machinery. India also exports iron, steel, and chemicals. Millions of Indian workers live and work in Gulf countries, adding another layer to the relationship.
A free trade agreement could reduce tariffs on many of these goods. It could also make rules clearer for businesses. This may help small exporters who often struggle with paperwork and costs.
Experts say the talks may take time. Trade deals are complex and involve many sectors. Both sides will need to balance their interests. Still, the signing of the Terms of Reference is seen as an important first step.
For India, the timing matters. Global trade is changing fast. Supply chains are shifting. Countries are looking for reliable partners. By moving ahead with the GCC, India is signaling it wants to be part of that change.
For Gulf nations, India offers a huge market and a growing economy. Stronger trade ties could bring new opportunities beyond oil and gas. As talks begin, both sides appear ready to test what deeper cooperation can bring.