logo logo

Green light for talks on GCC-India FTA

Bahrain Tribune, 16 August 2005

Green light for talks on GCC-India FTA

Bahraini businesses will find a whole new market opening up for them if efforts by Indian prime minister Manmohan Singh to swiftly conclude an India-GCC free-trade agreement (FTA) bears fruit.
The agreement, that has been in the works since February 2004, received a boost when the PM authorised the ministries of commerce and external affairs to begin negotiations with the GCC as a single bloc as well as with individual member countries of the GCC for a comprehensive economic cooperation agreement, covering the service sector and investment, along the lines of the pact signed between India and Singapore recently.

“Undoubtedly, the India-GCC FTA will help boost Indo-Bahrain trade and business ties,” said Indian embassy charge d’affaires H. R. Mohey. “GCC countries have always been of tremendous significance for India, located as they are in its immediate neighbourhood, just across the Arabian Sea. “The region is one of India’s most important sources of the supply of crude oil.”

The region is also home to about 3.5 million Indians who send nearly $6 billion back home every year in remittances. In recent months, many Indian companies have established themselves in Bahrain to tap into a booming economy and a changing Indian expatriate profile that is seeing more professionals joining establishments in the Kingdom with specialist skills. They include ICICI Bank, the Dredging Corporation of India and, most recently, UTI Mutual Funds. As a group, the GCC is India’s second largest trading partner. It is the largest single origin of imports into India and the second largest destination for exports from India.

“Obviously, the FTA with the GCC will help in raising trade figures between India and Bahrain and also attract more foreign direct investment,’’ Mohey said.

In February 2004, the then Minister of Commerce Ali Saleh Al Saleh led a high-profile delegation of Bahraini businessmen to a two-day India-GCC industrial conference in Bombay, organised by the GCC secretariat general and the Confederation of Indian Industry in collaboration with the ministries of external affairs and commerce.
The conference focussed on four themes: trade, investment, technology transfer (including information technology) and industrial co-operation. The conference called for increased co-operation in a standardisation and recognition of business standards, trade documentation and certification to provide a further streamlined movement of goods and services.

In this context, it welcomed the intention of the two sides to explore the possibility of an FTA. The meeting also recognised the great potential for industrial co-operation between the GCC and India, both at the small- and medium-enterprises level as well as investment in large joint ventures in India, GCC countries and third countries in areas of their core economic competencies and mutual interest like petroleum and gas, petrochemicals, fertilisers, power, metals and pharmaceuticals.

In August 2004, India and the GCC signed a framework agreement on economic co-operation in an effort to step up trade and economic relations between them. Some Gulf states have expressed interest in investment in infrastructure, power and other sectors in India. India’s exports to the GCC were around $5 billion in 2002-03 while bilateral trade exceeded $12.5 billion, not counting crude oil and petroleum products.

 source: Bahrain Tribune