The bilateral trade between India and the GCC reached approximately $179 billion in 2024-25, driven by exports including gems, metals, electronics, and chemicals.

Amid trade wars and tariff barriers paralysing global trade, the Gulf nations are emerging as a premier strategic market for India. Currently, the Gulf Cooperation Council (GCC)—a union of six West Asian nations—is India's largest trading bloc, larger than the European Union, ASEAN, and even its top bilateral partners, like the United States and China.

The bilateral trade between India and the GCC reached approximately $179 billion in 2024-25, driven by CEPA agreements with the United Arab Emirates (UAE) and Oman, with major exports including gems, metals, electronics, and chemicals. Now, New Delhi is in the process of signing a free trade agreement (FTA) with the six-nation bloc of West Asian nations-- comprising Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain. 

Benefits Of New FTA

India has already implemented a free trade pact with the UAE in May 2022.  With Oman, too, India has a Comprehensive Economic Partnership Agreement (CEPA), signed in Muscat on December 18, 2025. With the new FTA, Indian exports will get a boost in eliminating duties and non-tariff barriers with the rest of the nations as well. 

The Gulf region provided India with vital energy security and hosts 10 million Indians. 

Inside New Trade Pact

India and the GCC inked terms of reference on Thursday for formally launching negotiations for an FTA. The terms of reference (ToR) outline the scope and modalities of a proposed trade pact. Commerce and Industry Minister Piyush Goyal presided over the signing ceremony of the ToRs with GCC. Goyal said that the agreement will help boost bilateral trade and investments between the two."The two trading partners have been trading amongst each other for over 5,000 years," he told reporters.

"It is most appropriate that we now enter into a much stronger and more robust trading arrangement, which will enable a greater free flow of goods and services, bring predictability and stability to policy, and help encourage a greater degree of investment," Goyal said.

According to the minister, the agreement will also encourage food and energy security in the GCC nations as well as ensure energy security for India. While India is a major food grain producer in the world, GCC nations are oil and gas exporters.

"We already have a very robust, nearly $179 billion bilateral trade. I believe several products and services required by the GCC countries can be provided by our young, very talented, and skilled Indians, as the GCC countries can help us with further diversification and growth of our energy sources," he said.

With an FTA in place, India's petrochemical industry and information and communication technology firms are likely to get better opportunities in the ever-growing GCC market.

The launch of FTA talks with the GCC would be a kind of resumption of the negotiations, as the earlier two rounds of negotiations were held in 2006 and 2008 between the two regions. The third round did not happen, as GCC deferred its negotiations with all countries and economic groups.

Gulf: A Growing Market

Economist, United Nations advisor, and Columbia University professor Jeffrey Sachs believes that the Gulf will be the next big market for India. Talking to NDTV, he said, "The big growth is in your neighborhood. The big growth is in Southeast Asia. The big growth is in China, because India and China should be trading with each other. The big growth is in Western Asia, where there's a lot of money in the Gulf. Africa will grow rapidly. So India shouldn't base too much on the US market."

India-Gulf Trade

India imports predominantly crude oil and natural gas from the Gulf nations like Saudi Arabia and Qatar and exports pearls, precious and semi-precious stones, metals, imitation jewelry, electrical machinery, iron and steel, and chemicals to these countries. India's exports to the GCC grew by close to one per cent to about $57 billion in 2024-25 against $56.32 billion in 2023-24. Imports rose by 15.33 per cent to $121.7 billion in 2024-25 from $105.5 billion in 2023-24.

Bilateral trade has increased to $178.7 billion in 2024-25 from $161.82 billion in 2023-24. The UAE alone was India's third-largest trading partner in the last fiscal year. India's exports to the nation stood at $36.63 billion, while imports were $63.40 billion in the last fiscal year, resulting in a trade deficit of $26.76 billion in 2024-25.

Saudi Arabia was India's fifth-largest trading partner during the last fiscal year. Exports to the kingdom were $11.75 billion, while imports stood at $30.12 billion, leading to a trade deficit of $18.36 billion in 2024-25.

Qatar ranked as India's 22nd-largest trading partner last fiscal year. Exports stood at $1.68 billion, while imports were $12.46 billion, leaving a trade deficit of $10.78 billion in 2024-25. India mainly imports liquefied natural gas (LNG) from Qatar, while exporting products ranging from cereals to meat, fish, chemicals, and plastics.

Oman was the 28th largest trading partner of India in 2024-25. Exports stood at $4 billion, while imports aggregated to $6.54 billion. The trade deficit was 2.48 billion.

Kuwait ranked 29th among India's trading partners in 2024-25. Exports stood at $1.93 billion, while imports were $8.28 billion, leading to a trade deficit of $6.35 billion.

Similarly, India's outbound shipments to Bahrain, which is the 65th largest trading partner of India, were $797.47 million in the last fiscal year. Imports were $843.44 million, leaving a trade deficit of $45.97 million in 2024-25.