(MENAFN- KNN India)
New Delhi, Nov 26 (KNN) Negotiations for a Free Trade Agreement (FTA) between India and the Gulf Cooperation Council (GCC) are experiencing significant challenges, with diplomatic sources revealing intricate diplomatic and economic considerations at play.
Saudi Arabia, the region's most prominent economic powerhouse, is pressing for a Bilateral investment Treaty (BIT) as a prerequisite to advancing FTA discussions, creating a potential impasse in ongoing negotiations.
The Indian government currently perceives the likelihood of an imminent FTA signing as remote, anticipating prolonged negotiation timelines.
This assessment stems from fundamental disagreements in approach, particularly Saudi Arabia's insistence on linking a BIT with the broader trade agreement. While India remains open to trade discussions, it is reluctant to conditionally tie the two negotiation tracks.
Historically, the potential for an FTA with the GCC has been under consideration since 2004.
The strategic importance of these negotiations is underscored by substantial economic and demographic connections, including the presence of approximately 9 million Indian workers in the region and significant bilateral trade volumes.
Recent economic data underscores the robust trading relationship between India and the GCC. In the fiscal year 2023-24, bilateral trade reached USD 161.59 billion, with Indian exports totalling USD 56.3 billion and imports accounting for USD 105.3 billion.
Recognising the complexity of collective negotiations, India has strategically offered individual FTA negotiations to member countries, already successfully establishing an agreement with the United Arab Emirates.
Current diplomatic efforts indicate nuanced progress, with India approaching closer to finalising an FTA with Oman after completing negotiations on most chapters.
However, unresolved market access issues related to petrochemical products continue to pose challenges. Foreign trade experts suggest that existing FTAs with the UAE and Oman could potentially serve as frameworks for future agreements with other GCC nations.
The evolving diplomatic and economic landscape suggests that while comprehensive trade integration remains a priority, the path to a comprehensive GCC-India FTA will likely require continued patient negotiation and mutual compromise.
(KNN Bureau)
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