TIMES NEWS NETWORK | THURSDAY, OCTOBER 14, 2004
Govt initiates FTA talks with Gulf co-op council
NEW DELHI: The government has kickstarted the process for clinching a free trade agreement (FTA) with the Gulf Cooperation Council (GCC), with which New Delhi had entered into a framework agreement for economic cooperation in August.
The India-GCC joint commerce and trade committee, which will meet here next month, is expected to define the contours of a preferential/free trade agreement with the GCC, which accounts for 11% of India’s exports.
The commerce department has already assigned two agencies, RIS and Icra, to gauge the potential and likely pitfalls of an India-GCC FTA. “A framework pact does not necessarily mean that an FTA would follow.
But it (FTA) is a definite option,” said a senior official. By the time joint trade committee meets, the reports of the RIS and Icra would be available, said the official, adding that it was early to comment on when the FTA would be signed or on the product lines to be covered.
The framework agreement with the GCC is aimed at exploring opportunities in areas of oil and gas, knowledge-based products, education, health and other investments. GCC comprises six countries - the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman.
Indo-GCC trade has lately been on the rise. Indian exports to the GCC countries were about $7 billion in 03-04, a 43% jump over the previous year. Imports (excluding oil) from the GCC was $3.5 billion last fiscal, which was 72% higher than the imports the year before.
The UAE and Saudi Arabia are major importers of a variety of Indian goods. The UAE imported goods worth over $4.1 billion from India in ‘03-04, while Saudi Arabia’s imports from India crossed $1 billion. The GCC countries are moving to a common market by 2007 and a single currency by 2010.
The GCC countries have huge investment interest in India. The GCC countries, whose economies are driven by export of petroleum, are net buyers, with huge dependence on the West for most of the commodities. The GCC is planning bilateral trade agreements with China, EU, Pakistan, Australia and a host of other countries too.