Prospects of India–GCC Trade Relations

Abstract

India–Gulf Co-operation Council (GCC) countries trade relation has intensified in the last two decade. GCC is one of the largest trading partners of India. In this paper, an attempt has been made to explore India’s trade potential with GCC countries at HS-2 digit for the period 2001–2014. Various trade indices have been calculated to infer about mutual trade potential. The findings of this study reveal that India’s trade is more intense with GCC countries compared with its trading patterns with rest of the word. The study shows that there are several sectors in which India has an opportunity to increase its trade with GCC countries. Overall results show that India’s trade relation with GCC countries is increasing continuously but still there is lot of untapped potential to bring the welfare gains for both partners. Finally, the study concludes that the proposed economic integration in terms of a free trade agreement between India and GCC will be mutual welfare enhancing and a case of win–win situation.