India’s Big Gulf Push: Why A Potential Trade Deal With Six Arab Nations May Worry Pakistan

Last Updated:February 06, 2026, 11:57 IST

The move comes on the heels of India’s new FTA with the European Union and the announcement of a US-India trade pact that cuts American tariffs on Indian goods to 18 per cent.

Within days of sealing an FTA with the European Union, dubbed the “mother of all deals", and announcing a trade pact with the US described as “father of all deals", India has turned to the Gulf.

India and the Gulf Cooperation Council (GCC) have formally signed the Terms of Reference (ToR) to resume negotiations for a free trade agreement. The ToR was inked in New Delhi on Thursday in the presence of Commerce Minister Piyush Goyal, India’s Additional Secretary Ajay Bhadoo, and GCC’s chief negotiator Raja Al Marzouqi.

It also comes just months after a defence pact was signed between Saudi Arabia and Pakistan.

What Is The Gulf Cooperation Council?

The Gulf Cooperation Council comprises six Gulf nations – Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain. It was established in 1981 to promote cooperation and coordination among member states across areas such as industry, agriculture, scientific development and broader economic fields.

Its charter highlights the objective of closer integration and collaboration among the six governments and their populations.

India’s engagement with the GCC has evolved over decades through trade, energy and the movement of people. Nearly ten million Indians live and work across the six countries.

The UAE is among the largest contributors to inward remittances to India after the United States, and a substantial share of India’s crude oil and liquefied natural gas imports comes from GCC producers, particularly Saudi Arabia and Qatar.

The FTA process that India and the GCC have now restarted builds on a negotiation track that first opened in 2004 and continued through rounds in 2006 and 2008, before being suspended in 2011 when the GCC halted all trade talks globally. Discussions were revived in 2022, followed by the GCC sending a revised draft of the ToR in 2023.

This eventually led to Thursday’s signing of the ToR. The first formal round of negotiations is expected to take place in Riyadh, with Saudi Arabia offering to host.

What India’s Trade Numbers With The GCC Show

Bilateral trade between India and the GCC has increased over the past few years. In 2021–22, it stood at around $155 billion. In 2022–23, the figure rose to nearly $185 billion, with imports of $133.2 billion and exports of $51.3 billion.

In 2023–24, trade was valued at $162 billion. In 2024–25, India-GCC trade reached $178.7 billion, of which India’s exports amounted to $56.9 billion and imports were $121.7 billion.

The UAE was India’s third-largest trading partner last fiscal year. India’s exports to the nation stood at $36.63 billion, while imports were $63.40 billion in the last fiscal, resulting in a trade deficit of $26.76 billion in 2024-25.

Exports to Saudi Arabia stood at $11.75 billion, while imports were $30.12 billion. In Qatar’s case, India exported $1.68 billion and imported $12.46 billion. Trade with Oman included $4 billion in exports and $6.54 billion in imports. Exports to Kuwait were $1.93 billion against imports of $8.28 billion, while exports to Bahrain totalled $797.47 million and imports were $843.44 million.

Why Pakistan May View The India–GCC Shift Uneasily

India’s renewed engagement with the GCC carries implications that go beyond the trade track. The timing stands out, coming at a moment when Pakistan is grappling with severe economic pressures and simultaneously trying to reposition itself as a defence and security partner for Gulf nations.

Recent reports have pointed to Islamabad’s attempts to ease its financial burden by offering military equipment and defence arrangements in lieu of cash repayments. At the same time, key regional actors such as Turkey have stepped back from Pakistan’s effort to build a broader Islamic defence bloc involving Saudi Arabia.

Against this backdrop, India’s expanding economic engagement with the GCC strengthens New Delhi’s image as a stable, investment-driven and forward-looking partner, especially in contrast to Pakistan’s debt-linked overtures. A full-fledged India–GCC trade pact would further tie Gulf economies to India’s growth trajectory, narrowing the strategic room available to Islamabad in the region.

What India Stands To Gain From A GCC Deal

An FTA with the GCC would deepen trade as well as broader ties with the six member countries. At the signing ceremony, Commerce Minister Piyush Goyal said the agreement would strengthen both trade and investment links, noting that “the two trading partners have been trading amongst each other for over 5,000 years."

He added that “it is most appropriate that we now enter into a much stronger and robust trading arrangement which will enable a greater free flow of goods, services, bring predictability and stability to policy, and help encourage a greater degree of investments."

Indian exports will get a boost from the proposed pact from the elimination of duties and non-tariff barriers. “We will also get a foothold to grow Indian infrastructure and the infrastructure in the GCC, together with the high-quality companies that are working in the space of infrastructure. Our petrochemical industry will hugely benefit with this partnership," Goyal said.

Further, he added that India’s information and communication technology firms will get opportunities in the ever-growing GCC market.

He said the agreement will also encourage the food and energy security of the GCC nations, as well as India.

What The GCC Gains From India

For GCC nations, India offers size, stability and a diversified economic opportunity at a time of global uncertainty. GCC’s chief negotiator, Raja Al Marzouqi, described the pact as “a message" and “a signal for the whole globe," reflecting the bloc’s intent to enhance cooperation.

“So it’s a message, it’s a signal for the whole globe, and it’s important for us at this time to try to be more cooperative to avoid any risk that our global economy is facing as a result of uncertainty," he said.

India already has modern trade agreements with two GCC members — its free trade pact with the UAE implemented in 2022 and the Comprehensive Economic Partnership Agreement signed with Oman in December 2025. A region-wide agreement would give coherence to a relationship currently governed by individual arrangements.

News explainers India’s Big Gulf Push: Why A Potential Trade Deal With Six Arab Nations May Worry Pakistan

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