GCC, India Launch Free Trade Agreement Talks: Trade, Investment, and Sector Implications

The GCC and India have signed the Terms of Reference to formally restart Free Trade Agreement negotiations, moving discussions from political intent to structured talks that could eventually shape tariffs, rules of origin, customs procedures, and regulatory standards.

The Gulf Cooperation Council (GCC) and India have agreed on the Terms of Reference (ToR) to restart negotiations toward a Free Trade Agreement (FTA). This step matters because a ToR is where talks move from intent to structure, defining what will be negotiated, how negotiations will be organized, and what issues are likely to be prioritized.

For companies, that typically translates into future clarity on tariffs, customs facilitation, product standards, and the rules that determine whether goods qualify for preferential treatment. The announcement also fits India’s broader Gulf trade strategy, which already includes a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) and a newly signed CEPA with Oman. From a commercial lens, the stakes are significant: India’s exports to the GCC reached about US$57 billion in the fiscal year (FY) 2024–2025, while imports were about US$122 billion, reflecting the GCC’s central role in India’s energy, metals, and downstream supply chains.

See also: UAE-India CEPA at Three Years: Trade and Investment Growth, Opportunities

Negotiation launch and scope setting

The ToR signature marks the formal reactivation of GCC—India FTA negotiations and clarifies the parameters for the next phase of engagement. Tariffs, border procedures, and regulatory requirements remain unchanged until a final agreement is concluded, signed, and implemented through the relevant domestic processes.

As negotiations begin, timelines will largely depend on the breadth of the agenda and the pace of technical convergence on sensitive areas, particularly rules of origin, customs facilitation, and standards-related provisions that shape how preferential treatment is accessed in practice.

Trade baseline and sector exposure

In the financial year (FY) 2024–25, India’s trade with the GCC provided the baseline for assessing what a future agreement could change, particularly in relation to tariff costs, documentation requirements, and clearance procedures.

The corridor remained structurally shaped by energy-linked imports, largely concentrated in crude oil, liquefied natural gas (LNG), petrochemicals, and precious metals such as gold. On the export side, trade flows were comparatively more diversified, with key categories including engineering goods, rice, textiles, machinery, and gems and jewelry.

This composition was significant because it indicated where commercial sensitivities were likely to emerge during negotiations and where businesses might have shown the earliest interest in utilizing preferential treatment, should it have been introduced.

Investment, services, and regional operating context

The GCC—India corridor extends beyond goods trade to include investment linkages, regional headquarters activity, and cross-border service delivery that support distribution, contracting, and project execution. Licensing practices, conformity assessment, and enforcement intensity may differ across GCC markets, which shapes how commitments are experienced. Consequently, firms often evaluate the value of the agreement based on both the headline market access provisions and the practical operating environment in priority markets.

Process outlook and sequencing

After the ToR is signed, the standard process involves a series of negotiation rounds. These rounds steadily refine the chapter text, address bracketed provisions, and advance toward a thoroughly reviewed draft that is ready for signing and domestic implementation. It is important to note that timelines are often sensitive to scope and complexity.

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Broader coverage of services, stronger commitments on regulatory disciplines, and stricter rules of origin can require additional negotiation cycles and extended technical alignment. In that context, companies should view the ToR as the start of a structured process, while monitoring how quickly the parties converge on the most operationally consequential chapters.

Compliance watch points and operational preparation

Preparation for the near term is focused on documentation, and the primary risk is not meeting the administrative requirements for claiming preferences. Companies should:

• Validate Harmonized System (HS) classifications for priority products;
• Formalize origin substantiation through bills of materials and supplier declaration;
• Standardize invoice and packing-list data to reduce clearance holds; and
• Align record retention and contract liability for origin claims.

Key takeaways

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The GCC–India ToR indicate that negotiations are officially back on track and the focus is shifting from political messaging to technical bargaining, which can eventually impact real business costs. Once the scope is clearer, companies can map tariff exposure, identify products that could qualify for preferences.

A bloc-level deal could also establish more consistent regional pathways for Indian exporters and Gulf-based distributors, though market-level implementation details will still matter across the six GCC economies. For investors, the broader story is not only tariff cuts, but also the potential expansion of frameworks that support manufacturing partnerships, logistics, and energy-related joint ventures.

In the near term, preparation is more important than prediction. Firms should track negotiation chapters, identify priority products and services, and build compliance readiness so they can move quickly if timelines accelerate.

Dezan Shira & Associates supports domestic and foreign investors operating in the GCC with legal, regulatory, and compliance advisory services across capital markets, financial regulation, and corporate governance. For further information, please contact our team here.

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