India and GCC formally launch free trade agreement negotiations.
For businesses operating across India and the Gulf, the signing of the Terms of Reference marks the start of a negotiation process that could reshape trade structures, tariff frameworks and market access across key sectors.
Signing the Terms of Reference
The signing of the Terms of Reference took place at Vanijya Bhawan, New Delhi, in the presence of Union Minister of Commerce and Industry Piyush Goyal. The ToR establishes the formal framework that will guide the proposed free trade agreement (FTA) negotiations, defining the scope and modalities of discussions ahead. While it does not finalise any specific trade terms, it marks the transition from intent to structured dialogue between India and the GCC.
India originally suspended FTA negotiations with the GCC in 2008 after seven rounds of talks, making this resumption a notable development for businesses operating across these markets.
The existing trade relationship
India’s trade with the GCC stood at USD 178.56 billion in FY2024-25, accounting for 15.42% of India’s global trade, with exports of USD 56.87 billion and imports of USD 121.68 billion. Key exports from India include engineering goods, rice, textiles, machinery and gems and jewellery, while imports are largely dominated by crude oil, LNG, petrochemicals and precious metals.
The GCC is a regional intergovernmental union comprising six countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. India has already signed trade deals with two of the six member states, a Comprehensive Economic Partnership Agreement with the UAE in 2022 and a bilateral trade agreement with Oman in December 2025.
What the negotiations will cover
Sectors such as food processing, infrastructure, petrochemicals and information and communications technology are expected to be prioritised once formal negotiations are underway. Both sides have also agreed to de-link negotiations on the Bilateral Investment Treaty from the FTA, meaning the BIT will proceed on its own separate track.
No formal timeline has been set for concluding the agreement. Discussions on services trade, tariff lines for sensitive goods and labour mobility are expected to be among the more complex areas as talks progress.
Implications for businesses
For prospective market entrants, the launch of FTA negotiations may reduce uncertainty for firms considering cross-border expansion between India and the GCC. It creates an opportunity to review market entry strategies, assess where preferential tariff treatment could improve commercial viability and begin planning operating models accordingly.
For businesses already operating across both markets, now is the time to review existing trade structures, supply chains and market access positions. Companies in food and agribusiness, energy, manufacturing and professional services should begin identifying where a concluded FTA could open new opportunities or introduce competitive pressures on current arrangements.
