India’s Trade Diplomacy with Gulf Countries Gains New Momentum, Major Indication on FTA Amidst Pakistan-Saudi Agreement

New Delhi. Union Minister of Commerce and Industry Piyush Goyal indicated on Thursday that negotiations for a Free Trade Agreement (FTA) between India and the Gulf Cooperation Council (GCC) are set to resume. This announcement comes at a time when India has already concluded significant trade agreements with the European Union (EU) and the United Arab Emirates (UAE). This initiative is considered part of India’s broader trade strategy.

The GCC is a group of six Gulf countries: Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain. According to Piyush Goyal, India and these countries have a history of trade relations spanning approximately 5000 years. Currently, nearly one crore Indian citizens reside in these countries and play a significant role in their economies. The proposed agreement aims to promote the free movement of goods and services, attract investment, and ensure policy stability.

Background of the Pakistan-Saudi Defense Agreement
The resumption of talks between India and the GCC is taking place at a time when regional geopolitical conditions remain highly sensitive. In September 2025, a ‘Strategic Mutual Defense Agreement’ (SMDA) was signed between Saudi Arabia and Pakistan. This agreement came a few months after the military tensions between India and Pakistan in May 2025, known as Operation Sindoor. Notably, after the Pahalgam terrorist attack in April 2025, India had taken action against terrorist camps in Pakistan.

Growing Tensions in UAE-Pakistan Relations
While relations between Pakistan and Saudi Arabia appear to be strengthening, tensions have emerged in the relationship between the UAE and Pakistan.

Airport Deal on Hold: Immediately after the visit of UAE President Sheikh Mohammed bin Zayed Al Nahyan to India, the UAE canceled a crucial agreement with Pakistan. According to the Pakistani newspaper Express Tribune, the deal related to the management of Islamabad International Airport was postponed because Pakistan failed to finalize a local partner. The report stated that despite the final call letter, the UAE cited the lack of confirmation of the designated entity.

Strategic reasons: It is being said that the distance between the UAE and Pakistan has increased following Pakistan’s defense agreement with Saudi Arabia.

Strengthening India-UAE ties: Sheikh Mohammed bin Zayed Al Nahyan’s recent visit to Delhi has taken India-UAE relations to new heights.

India-UAE trade target: $200 billion
Just hours after the UAE President’s short but significant visit to India, the two countries set a target of increasing bilateral trade to $200 billion by 2032. The UAE and Saudi Arabia are India’s largest trading partners in the Gulf region. Experts believe that the Pakistan-Saudi partnership on one hand and the growing closeness between India and the UAE on the other reflect the changing priorities in the Gulf region.