India-GCC FTA Talks Likely In Second Half Of 2026 Amid West Asia Conflict

According to a government official who spoke to Moneycontrol, India and the Gulf Cooperation Council (GCC) are unlikely to begin discussing a proposed Free Trade Agreement (FTA) until the second half of 2026. This is because the West Asian region is still having problems with trade and logistics.

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Talks Pushed Amid Escalating Conflict

The pause in the update is a result of the events that occurred after February 28, 2026, in which the US and Israel struck Iran, and the latter retaliated, thus increasing the scope of the conflict in the region. 

The situation has impacted the major shipping routes, including the Strait of Hormuz, through which 20% of the world’s oil and liquefied natural gas is transported, as stated by Moneycontrol. 

Temporary stoppages in the oil terminals of the Gulf countries, as well as increased shipping costs, have been reported.

Impact On India’s Trade And Energy Flows

India, which relies on a significant volume of imported crude oil and LNG from this region, has also felt the pinch due to this.

The delay in launching talks on FTA has also been attributed to internal coordination within the GCC, which has a multi-step approach to decision-making before launching talks on a FTA, as mentioned in the above-mentioned official statement to Moneycontrol.

GCC Structure And Negotiation Process

The GCC comprises Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain.

Generally, the parties agree internally on tariffs, services, investment, and sensitive sectors before negotiations start.

India and the GCC agreed in February 2026 on a Terms of Reference (ToR), which is a document that presents the scope and process for a proposed agreement but does not include final tariff schedules or market access commitments.

Trade Volume And Economic Linkages

According to Moneycontrol, the GCC remains India’s largest trade partner in West Asia, with trade between the two countries reaching more than $178 billion in FY25.

India supplies the region with food, textiles, jewellery, medicines, and engineering goods, while the region supplies India with energy products like crude oil, LNG, and LPG.

The start of formal negotiations will depend on both regional conditions and internal alignment within the GCC, as indicated by the government official cited by Moneycontrol.