West Asia Crisis Pushes India–GCC FTA Talks to Late 2026

The first round of negotiations for the free trade agreement (FTA) between India and the Gulf Cooperation Council (GCC) will likely take place only in the second half of the year, Moneycontrol reported, citing sources. The postponement of the talks is due to the ongoing geopolitical conflicts in West Asia.

“They are only looking to talk in the second half of 2026, not before that, one of the reasons being the West Asia crisis,” the report quoted a source as saying.

The ongoing war between Iran, Israel and the US has led to broader regional instability and the shutdown of the Strait of Hormuz, a vital waterway for global trade. The near-complete closure of the strait has put India’s cooking fuel and energy needs under one of the worst crises in recent decades.

The temporary closure of the strait has also led to a slashing of output and export restrictions in several West Asian countries, including Qatar and the United Arab Emirates. Shipments transiting through the waterway have also been attacked, triggering global supply chain disruptions and sending crude prices skyrocketing.

New Delhi signed the Terms of Reference (ToR) with the GCC in February to launch FTA negotiations. The GCC is India’s largest trading partner in West Asia, with bilateral trade exceeding $178 billion in FY25. The Gulf bloc is also a major source of remittances, which form a key part of India’s current account, and hosts nearly 10 million Indians.

The report also suggested that the delay in initiating the first round of talks is partly due to the GCC’s complex decision-making system. The bloc consists of six member states—Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain—and typically reviews matters internally on sensitive sectors, negotiating positions, tariff lines, services commitments and investment protections before formal talks begin.

India exports a wide range of goods to the Gulf, including food, textiles, jewellery, pharmaceuticals and engineering products. It also depends heavily on the bloc for energy imports, including crude oil, liquefied natural gas and liquefied petroleum gas.