31 October , 2022 Fdiindia
India to Commence Free Trade Pact Negotiations With GCC
India is in pursuit of starting negotiations with the gulf cooperation council next month for a free trade agreement. The agreement aims to boost economic ties between the nations and also help increase India's share in global exports.
A union of 6 countries in the gulf region, including Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain, is known as GCC. The move comes after a free trade agreement was already set in motion with UAE.
Free trade agreements with the likes of the United Kingdom, UAE, and GCC would help India in ramping up exports of goods and services to $2 trillion by 2030 and increase its share in global trade to 3% by 2027 with the profound aims of raising it to 10% by 2047 from the current rate of 2.1%. The profound motive behind the impetus being to promote indigenous Indian brands globally.
India's exports to the GCC increased by 58.26% to $44 billion in 2021-22, above the $27.8 billion in 2020-21, as reported through data by the commerce ministry.
The share of GCC and its 6 comprising countries rose to 10.4% in 2021-22 from a measly 9.5% in 2020-21. Imports showcased a rise of 85.8 % to $110.73 billion compared to $59.6 recorded in 2020-21.
India's most substantial exports to gulf nations comprise of pearls, precious and semi-precious stones, metals imitation jewelry, electrical machinery, iron and steel, and chemicals. Mumbai-based exporter and founder chairman of Techno-craft Industries India, Sharad Kumar Saraf, said the GCC has emerged as a significant trading partner for India, and there is enormous potential for increasing investments between the two regions.
Saudi Arabia has been India's fourth-largest trading partner last fiscal. India imports 8.5 million tons of LNG a year. And exports products ranging from cereals to meat, fish, chemicals, and plastics. UAE was the third largest trading partner in 2021-22.
Trade gulf nations also holds a profound number of non-resident Indians. Out of about 32 million non-resident Indians, nearly half are thought to be working in gulf countries. A sizeable amount of money is sent back home by these workers.
"GCC is a major import-dependent region. We can increase our exports of food items, clothing, and several other goods. Duty concessions under a trade agreement will help in tapping that market. It will be a win-win situation for both sides," said Rakesh Mohan Joshi, Director, Indian Institute of Plantation Management, Bangalore, as reported by Economic Times India.
To match the perennial pace of growth the world seems to be speeding with, India would have to boost its global presence over time. The recent push to sign FTA trade pacts with nations to promote foreign trade would end up increasing the global importance of the nation tremendously. Recently the FTA trade agreement that was almost halted in its progression was set in motion again after the change of political arrangement in the United Kingdom. The previously stipulated deadline of taking the FTA agreement to a fruitful surmise by Diwali was thwarted due to sardonic comments of Suella Braverman, but as of now, political powers from both ends seem to be ardent to finalize the agreement.
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