India and the Gulf Cooperation Council have resumed talks for concluding a free trade agreement which is expected to bring new business opportunities for both sides, a top Indian official said on Wednesday as he expressed hope that the deal would soon become a reality.
Secretary (Consular, Passport & Visa and Overseas Indian Affairs) in the Ministry of External Affairs Ausaf Sayeed also shared that India is in discussion with its bilateral partners with regard to alternate payment mechanisms like rupee trading and barter trading "especially under the new circumstances where most countries are facing challenges of foreign currency".
GCC is a union of six countries in the Gulf region -- Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain.
The Arab region is the largest trading partner bloc of India with a trade exceeding USD 240 billion during financial year 2022-23. Of this, trade with GCC countries alone amounted to over USD 184 billion. The UAE remained India's third largest trading partner and Saudi Arabia the fourth largest trading partner during the last financial year.
There are several focus areas which have been identified between India and the Arab world, which include food security, supply chains, healthcare and pharma, energy security, renewable energy including green hydrogen, chips and semiconductors and technology including fintech and edtech.
Sayeed highlighted that there exists a huge potential in the industries of tourism, entertainment and culture, where most of the governments are very keen to forge greater partnerships in these areas with India.
India has a Comprehensive Economic Partnership Agreement (CEPA) with the UAE, which came into effect on May 1, 2022. The agreement provides preferential market access to over 97 per cent of tariff lines.
"Separately, India and GCC have resumed discussions on concluding the Free Trade Agreement. We have exchanged preliminary documents and the delegations have been meeting so we do hope that this would also become a reality very soon bringing in newer opportunities to business persons on both sides," the secretary said.
He also touched upon the subject of looking at alternate forms of trading and moving away from one particular currency, as mentioned by another speaker at the India-Arab Partnership Conference organised by Ficci, where he was addressing.
"We are in discussions with our bilateral partners. Talks about rupee trading, barter trading and many other things especially under the new circumstances where most countries are facing challenges of foreign currency," Sayeed said.
India and the GCC agreed to resume negotiations for a free trade agreement in November last year.
Two rounds of FTA negotiations were held earlier in 2006 and 2008 between India and GCC. The third round did not happen as GCC deferred its negotiations with all countries and economic groups.
India imports predominately crude oil and natural gas from the Gulf nations like Saudi Arabia and Qatar, and exports pearls, precious and semi-precious stones; metals; imitation jewellery; electrical machinery; iron and steel; and chemicals to these countries.
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