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India, Gulf nations bloc including UAE, Saudi Arabia agree on trade deal terms
The development comes days after India finalised a free trade pact with the European Union (EU) and sealed a trade deal with the United States.
India and the six-nation Gulf Cooperation Council have agreed on terms to start negotiations for a free trade agreement, union minister Piyush Goyal said on Thursday. The development comes days after India finalised a free trade pact with the European Union (EU) and sealed a trade deal with the United States.
Apart from the UAE and Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman are part of the GCC. Goyal made the announcement as India and the Gulf nations bloc signed the Terms of Reference (ToR). Goyal said that the “robust” trading arrangement would enable a greater free flow of goods and services, and will encourage more investments.
According to news agency Reuters, Goyal also said that the trade pact with the GCC would help with the diversification of India's energy sources, a remark that assumes significance in light of the recently-sealed India-US trade deal after which Trump had claimed India would cut its energy ties with Russia. However, there hasn't been any official confirmation from Indian authorities on that assertion yet.
This marks yet another step for India in boosting economic ties with other countries. The agreement between India and the GCC comes weeks after United Arab Emirates (UAE) President Sheikh Mohamed bin Zayed Al Nahyan paid to visit to India, a trip that had sparked buzz due to its duration.
The UAE President stayed in India for only three hours, during which he also met Prime Minister Narendra Modi and both leaders had reviewed the full scope of bilateral cooperation between the two countries.
India's existing pacts with GCC nations
The recent agreement between India and the GCC on starting trade talks marks a resumption of the negotiations that the two regions earlier carried out in 2006 and 2008.
India already shares rich trade ties with Gulf nations like Saudi Arabia and Qatar, from where they import crude oil and natural gas, and exports back pearls, precious and semi-precious stones, metals, imitation jewellery, electrical machinery, iron and steel, and chemicals.
India has already implemented a free trade pact with the UAE in May 2022. India and Oman also signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat on December 18, 2025.
UAE abandons Pak airport deal
Just weeks ahead of India's agreement on initiating talks on a free trade pact with the GCC, a key member of the Gulf nations bloc, the UAE, reportedly abandoned its proposal to operate Islamabad International Airport - an arrangement that had been under discussion since August 2025.
The development had sparked a big buzz, as it was being linked to the UAE President's brief trip to India that came a few days prior to it.
Big move after Saudi-Pak defence pact
The inking of the terms of reference between India and the GCC is a big development, given Saudi Arabia's close ties to Pakistan. In September 2025, Saudi Crown Prince Mohammed bin Salman and Pakistani Prime Minister Shehbaz Sharif signed a Strategic Mutual Defence Agreement, sparking concerns of possible implications for India, impacting its regional security dynamics. The agreement stated that "any aggression against either country shall be considered an aggression against both".
However, India's recent agreement with the GCC marks a significant step in enhancing New Delhi's ties with Riyadh.
