India is pursuing bilateral free trade agreement negotiations with Qatar and Bahrain while simultaneously preparing terms of reference for a GCC-wide trade agreement, according to officials from the Commerce Ministry. As reported by Business Standard, the bilateral approach is expected to move faster than the bloc-wide negotiations, with officials noting that GCC negotiations will be slower as member countries need time to take stock and discuss among themselves. India is optimistic of concluding negotiations with Qatar and Bahrain much faster—possibly even in record time—drawing on its recent experience with Oman.
India has secured duty concessions on nearly 99 per cent of its exports under trade agreements with the UAE and Oman, providing a proven template for the proposed Bahrain and Qatar FTAs. According to Business Standard reports, both countries have offered zero-duty market access on 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 likely to follow a similar framework, with Bahrain's negotiations progressing quickly while talks with Qatar could take slightly longer as Doha wants to simultaneously negotiate a Bilateral Investment Treaty (BIT) and conclude both agreements together.
The Commerce Ministry handles trade and investment promotion under FTA negotiations, while discussions on bilateral investment treaties are led by the Finance Ministry. As reported by Business Standard, nearly two years ago, Finance Minister Nirmala Sitharaman and her Qatari counterpart agreed to fast-track negotiations on a bilateral investment treaty, alongside measures to facilitate cross-border payments and digital transactions. India is also set to revive FTA negotiations with Israel, with the next round of talks likely in July in New Delhi. However, the official emphasized that it's not going to be a conventional goods-to-goods FTA, with plans to pursue investment promotion, economic cooperation and technological collaboration.
India has increasingly incorporated foreign direct investment (FDI) commitments into its trade agreements, with recent examples including $20 billion in FDI over 15 years under the agreement with New Zealand and $100 billion over 15 years under the Trade and Economic Partnership Agreement (TEPA) with the four-member European Free Trade Association (EFTA). According to Business Standard reports, India is likely to seek an investment commitment under the proposed agreement with Israel, similar to provisions included in some of its recent FTAs, as the country continues to expand its FDI-focused trade strategy.
