NEW DELHI: Indian businesses are eyeing the potential of a free trade pact with Gulf countries, the Confederation of Indian Industry said on Sunday, as New Delhi recorded a significant rise in exports a year after such an agreement with the UAE.
India and the Gulf Cooperation Council agreed to resume talks on a free trade pact last November, the third such attempt following negotiations previously held in 2006 and 2008.
In 2021-22, their bilateral trade grew from $87 billion to $154 billion.
Indian businesses are excited about the potential of a free trade deal with the six-member union, said CII Senior Director Manish Mohan.
“The Free Trade Agreement with the GCC would be a game-changer in the region,” Mohan told Arab News on Sunday.
“Businesses are excited. They are realizing that there is a huge potential in the Gulf and the Middle East and North Africa region across sectors like health, trade and investment,” he added. “The GCC is also emerging as an important partner for India.”
India and the UAE are recording a trade increase of nearly 30 percent across different sectors after they signed the Comprehensive Economic Partnership Agreement last February. The landmark deal reduced tariffs on around 80 percent of all goods and provided zero-duty access to 90 percent of Indian exports.
“There is remarkable growth,” Mohan said. “The CEPA agreement is a starting point, and we are looking at a huge upward trend between India and the UAE.”
Mohan said India’s trade pact with the UAE is a “win-win situation,” as the CII expects trade to reach $100 billion in five years.
The UAE is India’s third largest trading partner after the US and China, with a bilateral trade volume of $43.3 billion in 2020-21, which the CII said rose to $57 billion following the agreement.
“We are seeing an enhanced market access that is being offered under the India-UAE CEPA,” he said.
“The UAE is a gateway to not only African countries but also central Asian countries. This will have positive spins with other countries as well as other regions through UAE. Everybody would benefit from the CEPA.”
The Indian Embassy in the UAE said the agreement has “unleashed new opportunities” in trade.
“Exporters from both sides have benefited immensely since the CEPA entered into force,” Sunjay Sudhir, India’s ambassador to the UAE, told Arab News.
“The CEPA has opened a new frontier for bilateral trade.”