India-GCC trade hits $162 billion, growing ties in energy, defence, and tech

India’s trade with the Gulf Cooperation Council (GCC) reached USD 162 billion last year, accounting for 15% of India’s total trade. This milestone, highlighted by Aseem R Mahajan, Joint Secretary – Gulf, Ministry of External Affairs, was announced during the ‘India MENA Business Dialogue: Bridging Economics, Fostering Growth’ event organised by FICCI. The event emphasised the expanding partnership between India and the Gulf, covering crucial sectors such as energy, defence, security, and health.

Despite fluctuations in overall trade, India’s exports to the GCC have shown consistent growth. Mahajan noted that India exports a range of products, including food processing items, jewellery, textiles, pharmaceuticals, and engineering goods, with substantial growth potential. The India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, has strengthened trade relations between the two countries.

Financial connectivity has advanced with initiatives like integrating India’s Unified Payments Interface (UPI) with the UAE’s JAYWAN card and RuPay. Mahajan pointed to the successful local currency settlement system in Dirham and UPI as a model being considered by other countries. He also identified new opportunities in education and connectivity, highlighting the potential of the India-Middle East-Europe Economic Corridor.

Investment from Sovereign Wealth Funds in Saudi Arabia, UAE, Qatar, and Kuwait is focused on sectors like infrastructure, hydrocarbons, renewable energy, and technology. Mahajan noted the potential for joint ventures and partnerships in these areas.

Indian Ambassador to the UAE, Sunjay Sudhir, highlighted the role of technology and innovation in the GCC, particularly in artificial intelligence (AI), healthcare, and space technology. He noted that the GCC is India’s largest trading regional block, making up about one-sixth of India’s total trade.

Amit Narang, Indian Ambassador to Oman, discussed the growth in trade between India and Oman, with direct shipping routes potentially boosting this further. He also mentioned that talks for a bilateral CEPA with Oman are at an advanced stage, which could enhance trade and investment.

Dr. Suhel Ajaz Khan, Indian Ambassador to Saudi Arabia, focused on the energy-driven trade between India and the GCC, emphasizing opportunities arising from Saudi Arabia’s Vision 2030.

Adeeb Ahamed, Chairman of FICCI Middle East Council, called for a Free Trade Agreement (FTA) between India and the GCC to deepen economic ties. He also stressed the strategic importance of the India-Middle East-Europe Economic Corridor for enhancing connectivity and cooperation.