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As global power dynamics shift and regional conflicts persist, India is recalibrating its trade partnerships with renewed vigor—particularly in the Gulf region. The country is moving decisively to strengthen economic ties with Gulf Cooperation Council (GCC) countries, signaling a strategic realignment to safeguard national interests and bolster trade in a complex geopolitical environment.

Geopolitics Driving Economic Strategy

India’s proactive diplomacy in the Gulf comes at a time of sustained tensions with Pakistan. In this context, many Gulf nations have maintained a neutral stance, urging both restraint and peace. India is now capitalizing on this neutrality to enhance bilateral trade relationships and ensure economic continuity in times of diplomatic uncertainty.

Oman: A Strategic Partner at the Forefront

Among the first significant moves, India is poised to announce a Free Trade Agreement (FTA) with Oman—its oldest strategic partner in the Gulf. Talks for a Comprehensive Economic Partnership Agreement (CEPA) between the two nations began in November 2023 and are now nearing completion. Oman’s geostrategic location and longstanding diplomatic rapport with India make it a logical ally in this broader regional trade strategy.

Data from FY25 (April–February) shows balanced merchandise trade between the two:

Exports: $4.4 billion

Imports: $4.5 billion


This parity highlights a mature trade relationship, with the potential for expansion under an FTA framework that would eliminate tariffs, ease regulatory barriers, and promote investment flows.

Qatar: Investment-Driven Neutrality

India is also exploring similar pacts with Qatar, a nation that has shown increased willingness to engage economically with India. The Emir of Qatar’s visit to New Delhi in February 2025 and promises of major investment signal Qatar’s growing interest in the Indian market. Notably, Qatar remained neutral during the India-Pakistan conflict, which opens a window for long-term strategic cooperation.

Qatar’s trade profile with India in FY25 is significant:

Exports from India: $1.7 billion

Imports into India: $12.3 billion


This large trade deficit underscores the urgency of an FTA to rebalance trade terms and secure greater access for Indian exporters, especially in services and high-value manufacturing.

The UAE: Building on an Existing FTA

India already has an FTA in place with the United Arab Emirates, which continues to be one of its most robust Gulf trade partners. The UAE is not only a gateway to broader Middle Eastern markets but also a strategic partner in energy, investment, and diaspora connections.

FY25 trade figures affirm this strong relationship:

Exports: $35.6 billion

Imports: $48 billion


With such volumes, the focus now is on deeper sectoral collaboration in fintech, logistics, green energy, and defense manufacturing.

The Bigger Picture: Gulf Cooperation Council (GCC)

Beyond bilateral agreements, India is negotiating a broader FTA with the GCC, comprising Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain. A comprehensive agreement with this bloc could reshape India’s trade architecture by:

Expanding access to oil, gas, and petrochemicals at more favorable terms;

Opening avenues for Indian labor and technology services;

Enhancing food security cooperation and supply chain resilience.


Current FY25 merchandise trade between India and the GCC bloc stands at:

Exports: $51.8 billion

Imports: $107.9 billion


The widening deficit makes a compelling case for policy-level interventions aimed at increasing India’s export competitiveness, particularly in pharmaceuticals, renewable energy, and digital services.

Strategic Implications and the Road Ahead

India’s deepening engagement with Gulf economies reflects a multi-pronged strategy:

1. Geopolitical Insulation: Diversifying away from politically sensitive partners and creating buffers through stable Gulf relations.


2. Energy Security: Strengthening ties with major energy exporters like the UAE, Saudi Arabia, and Qatar to secure long-term supply contracts.


3. Diaspora Leverage: Tapping into the large Indian diaspora in Gulf countries to drive remittance flows, cultural linkages, and soft power.


4. Export Promotion: Using FTAs as tools to reduce transaction costs and enhance India’s share in Gulf markets.

India’s Gulf outreach, marked by the imminent FTA with Oman and proposed trade pacts with Qatar and the GCC, is more than economic expansion—it’s strategic recalibration. The pursuit of balanced, long-term trade relations with Gulf nations will not only hedge geopolitical risks but also fuel India’s aspirations to be a global trade powerhouse. The success of these partnerships will depend on India’s ability to offer competitive goods and services, harmonize standards, and ensure policy continuity.

As the Gulf emerges as a key axis in India’s trade diplomacy, the road ahead looks promising—but will demand agility, foresight, and sustained engagement.