GCC-India FTA to be a reality soon
Bahrain Tribune - 17/07/2007
GCC-India FTA to be a reality soon
(MENAFN - Bahrain Tribune) The Indian Ambassador in Bahrain, Balkrishna Shetty, said the much-awaited Free Trade Agreement between the six-nation GCC and India would soon become a reality with the negotiations reaching the final stage. "Negotiations will be completed by the yearend and the signing of the final agreement could be sometime early next year," he told Bahrain Tribune.
The proposal has been pending from the year 2004 when the Framework Agreement on Economic Cooperation between India and GCC countries was signed but did not make much headway thereafter even as scepticism mounted. India is the second largest trading partner for GCC after the US.
The ambitious FTA is expected to give a new impetus to the $25 billion two-way non-oil trade and also open up new vistas, with the partnering nations enjoying unprecedented economic growth, a golden period of sorts, and global business houses queuing up for cornering a large pie of their success.
As a group, the GCC is India’s second largest trading partner and the largest single origin of imports into India and the second largest destination for exports from India. Bilateral trade rose to nearly $25 billion in 2006, excluding energy imports by India worth approximately another $22 billion. In fact it registered a more than four-fold rise from $5.55 billion in 2000-01 to $23.42 billion in 2005-06, the period marked by buoyancy in exports and imports.
India is also projected to emerge as the fourth largest consumer of energy after the US, China and Japan by 2010.
According to the International Energy Agency’s projections, India’s oil demand is expected to rise from 2.83 mbpd in 2006 to 5.5 mbpd by 2025. About 70 percent of India’s net oil requirements come from the GCC.
Oman’s Minister of Commerce and Industry Maqbool Ali Sultan has aired his disappointment over the delay in the signing of the agreement recently and hoped that the FTA talks would conclude at least by the year-end or early 2008 and a formal agreement signed by September 2008. Oman takes over the GCC presidency in 2008.
India’s Commerce and Industry Minister Kamal Nath attributed the delay to human resource problems as India was in the midst of finalising FTAs with various countries.
The FTA is expected to remove restrictive duties, push down tariffs on goods and pave way for more intensive economic engagement between the nations.
The UAE emerged as the single largest investor in India among the GCC countries, accounting for nearly 79 per cent of the total inflow from the region, followed by Bahrain, Oman, Saudi Arabia, Kuwait and Qatar.
