The Hindu Business Line : Assocham calls for early free-trade pact with GCC

New Delhi, Nov. 6 India’s total trade with Gulf Co-operation Council (GCC) is likely to go up to $28 billion by March 2008 and exceed $40 billion by 2010, provided Free Trade Agreement (FTA) between the two is hurried up, according to The Associated Chambers of Commerce and Industry of India (Assocham).

A paper brought out by the chamber points out that India’s total trade with GCC countries, comprising Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the UAE, has already gone up to $22.5 billion, in fiscal ending March 2007 from $5.6 billion in fiscal 2001.

The GCC has emerged as the third largest trade partner for India after European Union and the US.

Potential large

This increase indicates large potential for trade between the two and therefore, calls for early signing of the FTA as India and the GCC have already signed a framework agreement on economic cooperation way back in August 2004 with a view to explore the possibility of forming a Free Trade Area.

The Assocham President, Mr Venugopal N. Dhoot, said that India’s trade basket with GCC is highly concentrated and its top five export categories account for over 50 per cent of India’s export basket to the bloc, and top five import items represent over 17 per cent of the total import basket from the bloc.

The top five items of India’s exports to GCC are gems and jewellery, mineral fuels, copper articles, cereals and steel products.

Export growth

While India’s exports to GCC countries grew at nearly 27 per cent per annum to $16.3 million in 2007, imports (excluding oil imports) from the region were valued at $6.2 billion in 2007, growing at about 22.4 per cent per annum.

The share of GCC countries in India’s total trade (excluding oil imports) has increased from about 7.1 per cent in fiscal 2001 to 8.7 per cent in fiscal 2007.

With enhanced economic cooperation through the proposed FTA, India would not only be assured of oil supplies in the future but is also expected to benefit from increased trade and investment opportunities in the region.

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