India Prioritises Bilateral FTAs With Qatar and Bahrain Over GCC Trade Pact

Government advances country-specific trade negotiations while continuing discussions with the Gulf Cooperation Council

India is focusing on bilateral free-trade agreement (FTA) negotiations with Qatar and Bahrain before concluding a wider agreement with the Gulf Cooperation Council (GCC), according to officials familiar with the matter. The government expects negotiations with individual countries to move at a faster pace than discussions involving the regional bloc.

The renewed emphasis on trade engagement in West Asia follows the interim peace deal between the United States (US) and Iran, which paused hostilities in the region.

“We will carry out the FTA talks on two tracks — bilaterally with Qatar and Bahrain, while continuing negotiations with the GCC,” one of the officials said. “The bilateral negotiations are expected to move fastest.” Referring to negotiations with the GCC, the official added, “GCC is a bloc. Negotiations will be slower because member countries need time to take stock and discuss among themselves,” while requesting anonymity as the talks are private.

According to another official, India is optimistic about concluding negotiations with Qatar and Bahrain much faster, possibly in record time, drawing on its recent experience with Oman.

“We already have FTAs with the United Arab Emirates and Oman, so we have a template to follow,” the official said.

India has secured duty concessions on 99 per cent of its exports under trade agreements with the United Arab Emirates and Oman. Both countries have provided zero-duty market access for almost all Indian exports from labour-intensive sectors, including gems and jewellery, textiles, leather, footwear, engineering goods, and pharmaceuticals.

The proposed FTAs with Bahrain and Qatar are expected to follow a similar framework. While negotiations with Bahrain are progressing quickly, talks with Qatar may take slightly longer as Doha is seeking to negotiate a bilateral investment treaty (BIT) alongside the FTA and conclude both agreements together, the first official said.

Two years ago, Finance Minister Nirmala Sitharaman and her Qatari counterpart, Ali bin Ahmed Al Kuwari, agreed to fast-track negotiations on a BIT, along with measures to facilitate cross-border payments and digital transactions.

Separately, India is preparing to resume FTA negotiations with Israel, with the next round of discussions likely to take place in New Delhi next month.

“It’s not going to be a conventional goods-to-goods FTA,” the first official said. “We cannot balance the FTA with just goods. We plan to pursue investment promotion, economic cooperation and technological collaboration.”

India is also expected to seek an investment commitment under the proposed agreement with Israel, the official said. The government has increasingly incorporated foreign direct investment commitments into its trade agreements. Under the trade and economic partnership agreement with the European Free Trade Association, India secured a commitment of $100 billion over 15 years.