India-GCC FTA in News
India-GCC FTA: India and Gulf Cooperation Council (GCC) have resumed their Free Trade Agreement (FTA) Negotiations. India-GCC FTA is important for UPSC Prelims 2023 and UPSC Mains Exam (GS Paper 2- International Relations).
India-GCC FTA in News
- Shri Piyush Goyal, Indian Minister of Commerce and Industry and Dr. Nayef Falah M. Al-Hajraf, Secretary General, Gulf Cooperation Council (GCC), held a Joint Press Conference, in New Delhi, to announce the intent to pursue negotiations on the India-GCC FTA.
Key Developments on India-GCC FTA
- With forward-looking and solution-oriented deliberations, bilateral engagements witnessed significant progress on all matters of mutual interest across the entire gamut of bilateral economic relations between India and the GCC nations.
- Both sides agreed to expedite conclusion of the requisite legal and technical requirements for formal resumption of the FTA negotiations.
- Both sides emphasized that the FTA will create new jobs, raise living standards, and provide wider social and economic opportunities in India and all the GCC countries.
- Both sides agreed to significantly expand and diversify the trade basket in line with the enormous potential that exists on account of the complementary business and economic ecosystems of India and the GCC.
Gulf Cooperation Council (GCC)’s Importance for India
- GCC is currently India’s largest trading partner bloc with bilateral trade in FY 2021-22 valued at over USD 154 billion.
- GCC’s Exports is valued at approximately USD 44 billion and imports of around USD 110 billion (non-oil exports of USD 33.8 Billion and non-oil imports of USD 37.2 Billion).
- Bilateral trade in services between India and the GCC was valued at around USD 14 billion in FY 2021-22, with exports valued at USD 5.5 Billion and imports at USD 8.3 Billion.
- GCC countries contribute almost 35% of India’s oil imports and 70% of gas imports. India’s overall crude oil imports from the GCC in 2021-22 were about $48 billion, while LNG and LPG imports in 2021-22 were about $21 billion.
- Investments from the GCC in India are currently valued at over USD 18 billion.
What is Free Trade Agreement (FTA)?
- The Free Trade Agreement (FTA) is envisaged to be a modern, comprehensive Agreement with substantial coverage of goods and services.
- The FTA negotiations are part of India’s broader strategy to forge balanced trade agreements with key economies and revamp existing trade pacts to improve trade and investment.
- India earlier this year has concluded FTAs with Australia and the UAE in a record time. The FTA talks with Canada and the UK are also underway.
What is Gulf Cooperation Council (GCC)?
- Established in 1981, the Gulf Cooperation Council (GCC) is a political and economic union of Arab states bordering the Gulf.
- GCC members: United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain.
- The GCC’s prime geographical location is at the crossroads of the major Western and Eastern economies.
- Since the discovery of oil, the GCC region has undergone a profound transformation and is now home to some of the fastest growing economies in the world.
- The established and efficient air and sea connections and developed infrastructure make it a great place to establish and expand business.
India’s Trade with Individual GCC Countries
- Saudi Arabia: Saudi Arabia was the fourth-largest trading partner of India in the last fiscal. Total bilateral trade has increased to about USD 43 billion in 2021-22 from USD 22 billion in the previous fiscal.
- Qatar: India imports 8.5 million tonnes a year of LNG (Liquified Natural Gas) from Qatar and exports products ranging from cereals to meat, fish, chemicals, and plastics. Two-way commerce between India and Qatar rose to USD 15 billion in 2021-22 from USD 9 billion in 2020-21.
- Kuwait: Kuwait was the 27th largest trading partner of India in the last fiscal. Bilateral trade has jumped to USD 12 billion in 2021-22 as compared to USD 6 billion in the previous financial year.
- UAE: UAE was the third-largest trading partner of India in 2021-22. India’s bilateral trade with the nation increased to USD 72 billion in 2021-22 as compared to USD 43 billion in 2020-21.
- Oman: Oman was the 31st largest trading partner of India in 2021-22. India’s bilateral trade with the nation has increased to about USD 10 billion in 2021-22 as compared to USD 5 billion in 2020-21.
- Bahrain: Bahrain’s two-way commerce with India stood at USD 1.65 billion in 2021-22 as against USD 1 billion in 2020-21.
India-GCC FTA MCQs
- What is Free Trade Agreement (FTA)?
Ans. The Free Trade Agreement (FTA) is envisaged to be a modern, comprehensive Agreement with substantial coverage of goods and services.
- When was Gulf Cooperation Council (GCC) established?
Ans. Gulf Cooperation Council (GCC) was established in 1981 by Arab states bordering the Gulf.
- What is the Full form of GCC?
Ans. GCC stands for Gulf Cooperation Council (GCC).