UAE Foreign Minister Shaikh Abdullah bin Zayed Al Nahyan, who is leading a 29-member delegation to a meeting of the UAE-Indian Joint Commission on June 6, said he hoped the FTA agreement — talks for which are on since 2004 — could be finalised by the end of the current year. "With the explosive economic growth now being enjoyed by India, and other Asian countries, it is natural that we in the Emirates should seek to further develop our ties in all fields," he said in a statement ahead of the crucial meeting.
Shaikh Abdullah’s optimistic remarks about the FTA came in the wake of scepticism voiced by Oman with the slow pace of FTA talks between India and the GCC.
"I am disappointed with the FTA talks between India and GCC. Almost nothing has happened since the last meeting in June 2006," Oman’s Minister of Commerce and Industry Maqbool Ali Sultan said on the sidelines of the Third India-GCC Industrial Forum in Mumbai last week. Nevertheless, he expressed the hope that FTA talks would conclude by the year-end or early 2008 and a formal agreement is signed by September 2008.
"Next year, Oman takes over the presidency of the GCC and we hope that a formal agreement is signed by September 2008," he said. The India-GCC FTA should be given priority as already India is the second largest trading partner for GCC after the US. The challenges are on both sides but it should happen as it would open up more opportunities," Sultan said.
He said that GCC expects to make an investment of $ 250 billion in Asia by 2010 and India should work towards cornering a large pie.
Indian Minister of Commerce and Industry Kamal Nath also shared Shaikh Abdullah’s optimism that talks in this regard were likely to be concluded soon.
"In the last five years, India’s total trade with the GCC countries has risen more than four-fold from $ 5.55 billion in 2000-01 to $ 23.42 billion in 2005-06. The period witnessed buoyancy in exports and imports. Signing of the Framework Agreement on Economic Cooperation between India and GCC countries in 2004 was another milestone in the Indo-GCC economic relations,” Nath said in his keynote address at the inaugural session of the third meeting of the India-GCC Industrial Forum here. He admitted that delays in signing the FTA with GCC countries was largely due to human resource problems as India was in the midst of finalising FTAs with various countries. However, he hoped that the FTA with GCC would be inked within a year.
"I am certain that we will be able to conclude the talks successfully in the next one year. India is in discussion with various countries but we have decided to give a new impetus to talks with GCC," Nath said.
The GCC is also negotiating for an FTA with the European Union. The GCC-EU FTA talks, which got revived last year, made headway early this year when negotiators from the GCC and the EU completed "a constructive round of negotiations" on the creation of a Free Trade Area between the two regional groups.
The UAE has emerged as the single largest investor in India among the GCC countries, accounting for nearly 79 per cent of the total inflow from the region, followed by Bahrain, Oman, Saudi Arabia, Kuwait and Qatar.
As a group, the GCC is India’s second largest trading partner and the largest single origin of imports into India and the second largest destination for exports from India. Bilateral trade rose to nearly $ 25 billion in 2006, excluding energy imports by India worth approximately another $ 22 billion.
Analysts said if the FTA could be formalised, both GCC and India stand to benefit as it would remove restrictive duties and push down the tariffs on goods being traded between them. With the GCC-India trade showing a remarkable surge in the last few years, speedy and successful FTA negotiations would lead to a more intensive economic engagement between the two, they said.
