Disagreement puts India-GCC FTA on backburner
Financial Express (India)
Friday, March 09, 2007
Disagreement puts India-GCC FTA on backburner
HUMA SIDDIQUI
NEW DELHI, MAR 8: Plans to put an India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA) in place have suffered a setback despite two rounds of talks earlier this year. According to officials, due to the absence of customs union and disagreement among the GCC countries, talks of an FTA with India are now stuck.
Also, “Rules of Origin need to be settled carefully to avoid any deflection of trade as GCC countries have better trade engagement with most of India’s major trading partners.” Officials expect the visit of Sheikh Mohammed, vice president and prime minister of UAE, later this month, to give a push to the process.
According to officials, even though India and the GCC countries had decided to finalise the FTA by early 2007, during recent meetings both sides merely reviewed the issues that need to be addressed by India and the member countries.
“Laws in all the member countries are different and it is unlikely there would be any unanimity among them. However, individual FTAs would help in exchanging technology in various fields,” Mohammad H Albadah, director, embassy of Kuwait, in New Delhi told FE.
"We have been looking for a comprehensive India-GCC agreement for a long time. This would help in the promotion of trade relations between India and the GCC, and would also bring the two sides closer to each other," said Saleh Mohd Al Ghamdi, Ambassador of Saudi Arabia in New Delhi.
In fact the GCC countries have huge investment interest in India, as their economies are driven by exports of petroleum, and are net buyers with huge dependence on the West for most of the commodities. The GCC is also entering into bilateral trade agreements with China, EU, Pakistan, Australia and a host of other countries too.
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CUL-DE-SAC • Rules of Origin need to be settled carefully to avoid any deflection of trade as GCC countries have better trade engagements with most of India's major trading partners • Officials expect the visit of Sheikh Mohammed, vice president and prime minister of UAE, later this month, to give a push to the process • India-GCC trade (excluding oil) stood at $19.48 billion in 2005-06 |
The strategic relevance of the Gulf region for India is to interact with investors and entrepreneurs in the region for availing new opportunities in India through joint ventures and collaborations in various sectors. “We believe that Indo-Gulf economic co-operation will require Indian firms and their Gulf counterparts to invest in each other’s countries in a significant manner,” officials said.
Several key areas such as ports, power, tourism, roads, gems and jewellery and textiles are key to Indo-GCC cooperation, and are expected to generate huge amount in businesses in the next five-10 years, owing to surplus GCC funds and higher purchasing power on the Indian side.
The GCC, which comprises Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman and Qatar, is slated to overtake the US as India’s largest trading partner very shortly. India-GCC trade (excluding trade) stood at $19.48 billion in 2005-06.
