India-Gulf Cooperation Council

  • The Gulf Cooperation Council (GCC) as a collective entity has tremendous significance for India. The Gulf constitutes the “immediate” neighbourhood of India separated only by the Arabian Sea. India, therefore, has a vital stake in the stability , security and economic well being of the Gulf. 
  • As a group, the GCC has been increasingly determining the economy, political and security policies of its member States. The GCC countries are moving ahead rapidly with their economic integration efforts. The GCC has emerged as a major trading partner of India.
  • It has vast potential as India’s investment partner for the future. The GCC’s substantial oil and gas reserves are of utmost importance for India’s energy needs. The GCC countries are collectively host to a large Indian expatriate community. In short, the GCC offers tremendous potential for cooperation in trade, investment, energy, manpower, etc.

Objectives:

  • Coordination, integration and inter-connection between Member States in all fields.
  • Strengthening ties between their peoples.
  • Formulating similar regulations in various fields such as economy, finance, trade, customs, tourism, legislation, administration.
  • Fostering scientific and technical progress in industry, mining, agriculture, water and animal resources.
  • Establishing scientific research centres, setting up joint ventures, and encouraging cooperation of the private sector.

Challenges:

  • Indian Workers Want to Return to Arab Countries
  • Cooperation

Economic and Commercial Relations:

  • India enjoys traditionally cordial relations and cooperation with the GCC. India’s old, historical ties with GCC States, coupled with increasing imports of oil and gas, growing trade and investment, and presence of approximately 6.5 million Indian workers in the region, are of vital interest to India. 
  • India’s economic linkage with the GCC have increased steadily, especially due to growth in oil imports. During 2015-16, India’s exports to GCC were US $ 41.71 billion.
  • The bilateral two-way trade during the period was  US$ 97.46 billion, registering a decline of about 27% over the previous year.

India’s trade with GCC countries:

Countries
2013-14
2014-15
2015-16
 
Import
Export
Total
Import
Export
Total
Import
Export
Total
KSA
36,403.65
12,218.96
48,622.61
28,107.56
11,162.55
39,270.11
20,314.81
6,395.76
26,710.57
UAE
29,019.82
30,520.42
59,540.24
26,139.91
33,028.08
59,167.99
19,424.88
30,321.07
49,745.95
Oman
2,951.18
2,812.27
5,763.45
1,752.24
2,379.44
4,131.68
1,673.00
2,191.09
3,864.09
Kuwait
17,153.55
1,061.14
18,214.69
13,381.97
1,198.89
14,580.86
4,967.81
1,246.37
6,214.18
Qatar
15,707.99
969.06
16,677.05
14,604.71
1,054.98
15,659.69
9,018.53
903.18
9,921.71
Bahrain
563.24
639.36
1,202.60
446.25
472.98
919.23
356.90
654.21
1,011.11
Total
101,799.43
48,221.21
150,020.64
84,432.64
49,296.92
133,729.56
55,755.93
41,711.68
97,467.61
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Strategic relations:

  • India and GCC share the desire for political stability and security in the region. 
  • The common political and security concerns of India and GCC translate into efforts for peace, security and stability in the Gulf region and South Asia. 
  • The emerging common security perceptions create further opportunities for GCC-India cooperation in the future
  • The GCC States are going through important changes and transformation; the process of understanding and integration is coming of age.
  • Alongwith it the areas for cooperation are also widening beyond investments, trade & commerce and sharing & development of human resources to security.

India-GCC Industrial Conference:

The first GCC-India Industrial Conference was held  in Mumbai in February 2004, the second was held in Muscat in March 2006, the third was held in Mumbai in May 2007 and the fourth was held at King Abdullah Economic City, Jeddah in November 2015.

India- GCC FTA :

India and GCC signed a Framework Agreement for enhancing and developing economic cooperation between the two sides in in New Delhi in August 2004.

  • Two rounds of talks for finalizing aspects like tariff rules, rules of origin, etc have been held. The India-GCC FTA is under negotiation. 

Conclusion:

  • Amid the more apprehensive and inward-looking world, trade wars between U.S and China, pandemic hit the pessimistic world, India and GCC have immense potential to create avenues of growth and stability. A strong layered economic partnership between the two parties would be beneficial for everyone.
  • India-GCC Free Trade Agreement (FTA) can provide a boost to the relations.
  • India needs to safeguard its large economic, political and demographic stakes in the region

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