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Source — Source: PIB ///Category — GS Paper 2 ///Published — 2026-02-25 ///Exam — Both Prelims and Mains ///Tags — Rapid Fire CA, Quick Facts For Prelims, GS Paper - 2 ///Source — Source: PIB ///Category — GS Paper 2 ///Published — 2026-02-25 ///Exam — Both Prelims and Mains ///Tags — Rapid Fire CA, Quick Facts For Prelims, GS Paper - 2 ///

Source: PIB · GS Paper 2

India–GCC Free Trade Agreement

India and the Gulf Cooperation Council (GCC) have signed a joint statement to accelerate negotiations on a free trade agreement, underscoring the strategic economic partnership. The GCC accounts for over 15% of India’s global trade, with bilateral trade touching USD 178.56 billion in FY 2024‑25, making the agreement pivotal for India’s trade, energy security and diaspora engagement.

2026-02-25

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Source: PIB

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Key Facts and Data Points

GCC’s share in India’s global trade: 15.42%.
Bilateral trade (FY 2024‑25): USD 178.56 billion (Exports: USD 56.87 billion; Imports: USD 121.68 billion).
Average annual trade growth (last 5 years): 15.3%.
Major Indian exports to GCC: Engineering goods, rice, textiles, machinery, gems & jewellery.
Major Indian imports from GCC: Crude oil, LNG, petrochemicals, gold.
GCC market size: 61.5 million people; GDP USD 2.3 trillion (9th globally).
Cumulative Indian FDI from GCC (till Sep 2025): > USD 31.14 billion.
Indian diaspora in GCC: ~10 million.

Background and Context

GCC formation (1981): A political‑economic bloc of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, created to counter regional instability post‑Iranian Revolution and Iran‑Iraq war.
India‑GCC relations: Historically anchored on energy imports, trade, and a large expatriate community; recent diplomatic outreach aims to diversify into services, investment, and technology.
Joint Statement (25 Feb 2026): Re‑affirmed the Terms of Reference for the India‑GCC FTA and set a roadmap for negotiations, signalling a shift from ad‑hoc trade to a structured agreement.

Significance for India / Governance / Policy

Energy security: Formalizing trade terms can ensure stable, possibly cheaper oil and gas supplies.
Economic diversification: An FTA can open GCC markets for Indian engineering, pharmaceuticals, and services, reducing over‑reliance on traditional commodities.
Investment boost: Clearer rules may attract more GCC FDI, especially in infrastructure, renewable energy, and tourism.
Diaspora leverage: The 10 million Indian expatriates act as a “living bridge,” facilitating business linkages and cultural diplomacy.
Strategic balance: Strengthening ties with GCC complements India’s broader Indo‑Pacific strategy and counters competing influences in the Gulf.

Related Constitutional / Legal Provisions

Article 252 of the Indian Constitution: Allows the Parliament to enter into agreements with other countries or international bodies for trade and commerce.
Foreign Trade (Development and Regulation) Act, 1992: Provides the legal framework for negotiating and implementing FTAs.
Make in India & Export Promotion Schemes: Existing policies can be aligned with FTA provisions to maximize export potential.

References

PIB Press Release, 25 Feb 2026
India‑GCC Economic and Strategic Links (daily‑updates)