India, GCC Sign ToR to Launch Negotiations on Proposed Free Trade Agreement

India and the Gulf Cooperation Council (GCC) on Tuesday signed the Terms of Reference (ToR) for negotiations on a proposed Free Trade Agreement (FTA), marking a major step towards deepening economic engagement between the two sides. The signing of the ToR formally commences negotiations aimed at concluding a comprehensive and mutually beneficial trade pact. 

Framework for Negotiations

According to the Ministry of Commerce & Industry, the ToR will guide the scope, structure and modalities of the India–GCC FTA negotiations. The agreement is expected to unlock substantial trade and investment potential with a region that shares long-standing commercial and cultural ties with India. 

Robust Trade Relationship

India’s trade with the GCC stood at USD 178.56 billion in FY 2024–25, accounting for 15.42 per cent of India’s total global trade. Over the last five years, bilateral trade has grown at an average annual rate of 15.3 per cent, underlining the strategic importance of the region for India’s external trade. 

Key Exports and Imports

India’s major exports to the GCC include engineering goods, rice, textiles, machinery, and gems and jewellery. In contrast, imports from the region are dominated by crude oil, liquefied natural gas (LNG), petrochemicals, and precious metals such as gold, reflecting the energy-centric nature of the trade relationship. 

GCC: Economic Profile

The Gulf Cooperation Council was established on May 25, 1981, in Riyadh, Saudi Arabia. It comprises six member countries—Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman, and Bahrain. Together, the GCC represents a combined market of around 61.5 million people with a GDP of USD 2.3 trillion, ranking ninth globally. 

Investment Linkages

The GCC is also a major source of foreign direct investment (FDI) for India. Cumulative investments from GCC countries in India have exceeded USD 31.14 billion as of September 2025, further strengthening the economic partnership.