The Indian government is poised to open talks on a new free trade agreement (FTA) with the Gulf Cooperation Council (GCC) next month, it has been reported.
Sources told the Economic Times that terms of reference for the agreement are currently being finalized ahead of discussions beginning in earnest in November.
According to India's commerce ministry, bilateral trade between the country and the GCC has already seen a significant increase in recent times, rising from $87.4 billion in 2020-21 to $154.73 billion in 2021-22.
Overall, exports from India to the GCC climbed by 58.26 per cent to about $44 billion in 2021-22 compared with $27.8 billion in 2020-21, and the bloc is seen as a major trading partner for New Delhi as it seeks to increase the country's total exports of goods and services to $2 trillion by 2030.
The GCC is a six-nation group consisting of Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain. India has already struck a bilateral trade deal with the UAE in May of 2022 that may act as a basis for a wider agreement.
Trade experts have highlighted the region as offering great potential for growth for Indian firms as the countries of the GCC are heavily dependent on imports.
Rakesh Mohan Joshi, director of the Indian Institute of Plantation Management in Bangalore told the Economic Times: "We can increase our exports of food items, clothing and several other goods. Duty concessions under a trade agreement will help in tapping that market. It will be a win-win situation for both sides."
India's main imports from the Gulf region are crude oil and natural gas from nations such as Saudi Arabia and Qatar, while it exports items including pearls, precious and semi-precious stones, metals, imitation jewelry, electrical machinery and chemicals to these countries.
The news comes shortly after India and the UK missed a deadline for the completion of an FTA following a dispute over the UK's desire to restrict steel imports and India's demand for easier access to the UK for students and IT workers.