In a fresh development on India–Gulf trade ties, the Gulf Cooperation Council (GCC) has agreed to separate talks on a Bilateral Investment Treaty (BIT) from the Terms of Reference (ToR) for a Free Trade Agreement (FTA). According to sources, the ToR lays down the scope and framework for FTA negotiations. Meanwhile, a BIT focuses on investment protection and promotion between countries or blocs.

Sources said this decoupling could help move FTA discussions forward if the BIT talks conclude soon. However, if delays persist, India may choose to pursue FTAs individually with GCC members Qatar and Bahrain. India already has a trade pact in place with the UAE, another GCC member.

The six-nation GCC includes Saudi Arabia, the UAE, Kuwait, Qatar, Oman, and Bahrain. Saudi Arabia is the bloc’s largest economy. It has a population and land area larger than the rest of the members combined.

Earlier, in December 2024, Saudi Arabia had expressed its preference to finalise a BIT with India before moving ahead with FTA negotiations. India, however, was not in favour of linking the two processes. BIT discussions with Saudi Arabia were already underway separately. This difference in approach had contributed to delays in FTA talks.

India and the GCC had announced the resumption of FTA negotiations in 2022, reviving an idea first proposed in 2004. The GCC remains a key economic partner for India. This is supported by strong historical ties and the presence of nearly 1 crore Indian workers in the region.

Trade ties have strengthened steadily, driven largely by oil imports. In FY 2023–24, India–GCC bilateral trade stood at $161.59 billion. Exports were at $56.3 billion, and imports at $105.3 billion.

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