India and GCC Sign Terms of Reference for FTA

ToR Signing: India and GCC signed the Terms of Reference to guide FTA negotiations (Feb 2026).\
Bilateral Trade (FY 2024‑25): USD 178.56 billion (Exports: USD 56.87 bn; Imports: USD 121.68 bn).\
Trade Share: 15.42 % of India’s total global trade.\
Growth Rate: Average annual growth of 15.3 % over the last five years.\
Key Indian Exports to GCC: Engineering goods, rice, textiles, machinery, gems & jewellery.\
Key Indian Imports from GCC: Crude oil, LNG, petro‑chemicals, gold.\
GCC‑India FDI: Cumulative USD 31.14 bn (as of Sept 2025).\
Indian Diaspora in GCC: Nearly 10 million people.\
GCC Profile: Six member states (Saudi Arabia, UAE, Bahrain, Qatar, Kuwait, Oman); combined GDP ~USD 2.3 trillion; population ~61.5 million; ninth‑largest economy globally.\

GCC Formation: Established in 1981 to promote political, economic and cultural unity among its members.\
Strategic Location: Sits on the Persian Gulf, a pivotal conduit for global energy trade.\
India‑GCC Relations: Historically anchored on energy imports, labour migration, and growing trade‑investment linkages.\
FTA Negotiations: The ToR outlines scope, modalities, timelines and sector‑wise priorities, paving the way for a comprehensive FTA.

Energy Security: Formalising trade rules can ensure stable, diversified oil and gas supplies.\
Economic Diversification: Enhanced market access for Indian engineering, textiles and services; potential to reduce trade deficit.\
Investment Flows: A clear FTA framework can attract GCC‑based FDI into manufacturing, infrastructure and renewable energy.\
Employment Generation: Expanded trade and investment are likely to create jobs both in export‑oriented sectors and downstream industries.\
Diaspora Engagement: A structured agreement can improve welfare and skill‑utilisation of the large Indian workforce in GCC.

External Affairs (Art. 301‑304 of the Constitution): Grants the Union the power to negotiate and enter into international agreements.\
Foreign Trade Policy (FTA provisions): Under the Foreign Trade (Development and Regulation) Act, 1992, the government may enter into FTAs subject to parliamentary approval.\
World Trade Organization (WTO) Obligations: Any India‑GCC FTA must be consistent with WTO rules, particularly the Most‑Favoured‑Nation (MFN) principle, unless a waiver is obtained.