India and the Gulf Cooperation Council, a group of six countries, including Saudi Arabia and the United Arab Emirates, have signed a Terms of Reference (ToR) in Delhi to begin the free trade agreement (FTA) negotiations, Union Commerce Minister Piyush Goyal said on Thursday.

The deal comes after India concluded terms of a trade deal with the United States and the European Union, a 27-nation bloc.

The step is seen as a major step in strengthening economic ties with the six-member Arab bloc. The group includes the UAE, Saudi Arabia, Bahrain, Kuwait, Oman, and Qatar.

The signing of the ToR has established the framework for the two sides to start formal discussions towards reaching an FTA. Speaking at the ToR signing event in New Delhi, Goyal said the proposed trading arrangement would be robust and enable a greater free flow of goods and services. It will also encourage stronger investment ties between the two sided.

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He said, "Food processing, infrastructure, petrochemicals, and Information and Communications Technology are some of the many sectors that will benefit hugely from the India-Gulf Cooperation Council (GCC) FTA."

The ToR has been signed only weeks after a brief visit of UAE's Sheikh Mohamed bin Zayed Al Nahyan to India.

Nahyan was in India for just three hours and he met Prime Minister Narendra Modi. During a short meeting, the two leaders discussed and reviewed the full scope of bilateral cooperation.

Earlier on Monday, United States president Donald trump announced a trade deal with India and reduction in tariff to 18 per cent against earlier 25 per cent reciprocal tariff and 50 per cent penalty for buying Russian oil.

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The deal was confirmed by PM Modi, but Trump's claim of New Delhi agreeing to halt Russian oil imports found no mention in his statement.

India and EU have also signed a trade deal, dubbed by bith sides as "the mother of all deals". Under the agreement, India will eliminate or reduce tariffs on 96.6 per cent on EU products. Tariffs on cars will be cut down to 10 per cent from 110 per cent. The duties on car parts will be phased out over the next decade.



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