Published: 5 February 2026PIBEconomy
India-GCC Sign Terms of Reference to Formally Restart Free Trade Agreement Negotiations
On February 6, 2026, India and the six-nation Gulf Cooperation Council (GCC) signed the Terms of Reference (ToR) in New Delhi to formally restart negotiations for a Free Trade Agreement (FTA). The event was presided over by Union Minister Piyush Goyal (Ministry of Commerce and Industry) and the GCC Chief Negotiator Raja Al Marzoqi.
The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Negotiations for an India-GCC FTA had been ongoing intermittently since 2004, with the ToR signing marking a significant procedural step toward a structured and time-bound negotiation framework. The FTA aims to ensure stable trade policies while boosting market access in sectors such as food processing, petrochemicals, pharmaceuticals, textiles, and services.
India-GCC trade is valued at approximately $180 billion annually, and over nine million Indian workers in GCC countries are a critical source of remittances — India receives the world's largest remittance inflow with GCC accounting for nearly 55% of total remittances. An India-GCC FTA, if concluded, is expected to significantly boost exports, particularly in sectors like gems and jewellery, textiles, and engineering goods. Rajasthan's economy stands to benefit directly: its gems and jewellery sector — centered in Jaipur — exports significantly to Gulf markets. Rajasthan also sends a large diaspora of workers to GCC countries, particularly from districts like Barmer, Jaisalmer, and Jodhpur.
0Mains angle
Q: Examine the strategic economic significance of the India-GCC Terms of Reference for restarting Free Trade Agreement negotiations, particularly for Rajasthan's gems, jewellery, and diaspora-dependent economy.
Answer (50 words):
India and the six-nation Gulf Cooperation Council signed Terms of Reference on February 6, 2026 to formally restart Free Trade Agreement negotiations. With bilateral trade near $180 billion annually and GCC contributing nearly 55 percent of India's remittances, a concluded FTA would boost Rajasthan's gems, jewellery, and textiles exports.
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Practice MCQ from this story
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Linked questionEasy
GCC is a regional organization comprising countries of which region?
Explanation · Correct answer BThe Gulf Cooperation Council is a regional organization of six countries bordering the Persian Gulf: Saudi Arabia, UAE, Qatar, Kuwait, Bahrain, and Oman.
Frequently asked questions
When and what did India and GCC sign to restart FTA negotiations?
India and the GCC signed Terms of Reference (ToR) on February 6, 2026 to formally restart Free Trade Agreement negotiations, chaired on the Indian side by Minister Piyush Goyal.
What is the current India-GCC bilateral trade volume?
India-GCC bilateral trade currently stands at approximately $180 billion, making the GCC one of India's most important trading blocs.
What percentage of India's remittances comes from GCC countries?
GCC countries contribute approximately 55% of India's total remittance inflows, making the Gulf diaspora a critical part of India's external economy.
Which six countries form the GCC?
The Gulf Cooperation Council (GCC) comprises six nations: Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait, Bahrain, and Oman.
How would an India-GCC FTA benefit Rajasthan?
An India-GCC FTA would directly benefit Rajasthan's gems and jewellery sector, its large textile industry, and the state's diaspora-dependent economy, as many Rajasthanis work in Gulf countries and send remittances home.
