New Delhi, Oct 31 (KNN) With the aim to boost economic ties between India and the Gulf region, New Delhi is likely to start free trade agreement negotiation with the Gulf Cooperation Council (GCC) next month.

"Terms of reference for the agreement are being finalised and we expect to launch the negotiations next month," an official told PTI.

The Gulf region holds tremendous potential for trade and an agreement with the GCC will further help in boosting India’s exports to the market.

GCC is a union of six countries in the Gulf region that includes Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain. In May, India had implemented a free trade agreement with the UAE.

"GCC is a major import dependent region. 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," said Rakesh Mohan Joshi, Director, Indian Institute of Plantation Management, Bangalore.

India targets to ramp up exports of goods and services to USD 2 trillion by 2030 and also eyes to raise the share of its exports in global trade to 3 per cent by 2027 and 10 per cent by 2047 from the current 2.1 per cent, promoting hundred Indian brands as global champions.

Bilateral trade between the regions increased to USD 154.73 billion in 2021-22 from USD 87.4 billion a year earlier.

“India's exports to the GCC increased by 58.26 per cent to about USD 44 billion in 2021-22 against USD 27.8 billion in 2020-21,” according to data of the commerce ministry.

The share of these six countries in India's total exports has risen to 10.4 per cent in 2021-22 from 9.51 per cent in 2020-21. Similarly, imports rose by 85.8 per cent to USD 110.73 billion compared to USD 59.6 billion in 2020-21, the data eludes.

Federation of Indian Exports Organisation (FIEO) Vice Chairman Khalid Khan said sectors like chemicals, textiles, gems and jewellery and leather will get a major impetus by this agreement.

Saudi Arabia was India's fourth-largest trading partner last fiscal. From Qatar, India imports 8.5 million tonnes a year of LNG and exports products ranging from cereals to meat, fish, chemicals, and plastics.

Kuwait was the 27th largest trading partner of India in the last fiscal, while the UAE was the third-largest trading partner in 2021-22.

FTA with the GCC comes at the backdrop of the missed deadline by India and the United Kingdom to finalise their trade agreement. The prime ministers of both nations are set to resume talks and agreed on the need for early conclusion.  (KNN Bureau)