India is vigorously pursuing for a Free Trade Agreement with Gulf countries, Finance Minister P Chidambaram said on Monday.
"We are in the process of negotiating an FTA with Gulf Cooperation Council (GCC). The first round of meeting between India and GCC had taken place in March 2006," he said.
"We hope to take it further," Chidambaram said, adding that the Arab countries should take advantage of India's cost competitiveness by sourcing more manufactured items.
India is becoming a major global manufacturing hub.
"We believe India has competitive advantage in many areas especially in manufacturing and services," he said.
The country is fast becoming a hub for manufacturing particularly, steel petroleum refinery, automobiles and auto parts, textiles, leather and leather products and pharmaceuticals, he said.
This can be leveraged to forge close economic ties and investment relationship with the Arab world.
Chidambaram assured foreign investors of hassle-free clearances for their projects. "The red-tape is out and red carpet is in," he said.
Chidambaram also said that India has already signed a Bilateral Investment Protection Agreement with six Gulf countries and four more are in the pipeline.
The six countries with which India has signed BIPA are—Oman, Qatar, Kuwait, Yemen, Bahrain and Saudi Arabia.
High oil prices have contributed to the wealth of oil producing countries he said, adding that these countries should explore investment prospects in India.