By Admin 
India has taken a big step to start formal negotiations for a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC). On 5 February 2026, Commerce and Industry Minister Piyush Goyal presided over the ceremony and signed the Terms of Reference (ToR) for the FTA.
6 Gulf countries together created GCC
GCC includes Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain. All these are important countries of the Gulf. Bilateral trade between India and GCC is expected to reach approximately $178.7 billion in 2024-25. This is India’s largest trading block, which is bigger than the European Union, ASEAN, America or China.
After signing the ToR, Piyush Goyal said, ‘We both have been doing business for 5,000 years. Now a stronger and better trading agreement will lead to better flow of goods and services and investment will increase. Our young and skilled people can provide many products to GCC and they can help us in energy diversification.
How much trade happens between India and GCC?
- Exports from India to GCC are about $57 billion, which has increased by 1% compared to last year. These include gems, metals, electronics, chemicals, jewellery, iron and steel.
- Imports from GCC to India are about $121.7 billion, which has increased by 15.33% compared to last year. GCC mainly sends crude oil and natural gas to India.
According to current data, India has a trade deficit, but FTA can increase exports. However, India has already signed FTAs with some countries. FTA with UAE is in force from May 2022. Comprehensive Economic Partnership Agreement (CEPA) with Oman has been signed on 18 December 2025. This FTA negotiation between India and Gulf countries is old. Earlier two rounds were held in 2006 and 2008, but GCC had stopped talks with all the countries. Now it has been started again.
What will be the benefits of doing FTA with GCC?
- Duty and non-tariff barriers will be removed, making Indian goods cheaper and easier to import into GCC.
- Free flow of goods and services will increase.
- Investment will increase, there will be stability in policies.
- India will get energy security (oil-gas).
- GCC will get food security (India is a big grain producer).
- Petrochemical, IT and other sectors will get new opportunities.
- 1 crore Indians work there, there can be benefit for them also.
This deal is an important step towards making the Gulf the next big market for India, especially when there are problems like tariffs and wars in global trade. Negotiations have now formally begun, and further meetings will take place in the coming months.