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About The Gulf Cooperation Council

Context:

External Affairs Minister arrived in Saudi Arabia’s capital, Riyadh, to attend the First India-Gulf Cooperation Council (GCC) Foreign Ministers’ Meeting.

Relevance:

GS II: International Relations

Dimensions of the Article:

  1. Gulf Cooperation Council (GCC) Overview
  2. India-GCC Relationships Overview

Gulf Cooperation Council (GCC) Overview

  • The Gulf Cooperation Council is a strategic and economic alliance consisting of six Arabian Peninsula nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
  • Formed in 1981, the GCC fosters economic, security, cultural, and social collaboration among these member states.
  • An annual summit is convened to deliberate on cooperative strategies and regional issues.
Importance of GCC for India
  • Energy Assurance
    • GCC states control nearly half of the globe’s oil reserves, making them crucial for energy security.
    • Suppliers from the GCC are responsible for approximately 34% of India’s oil imports.
  • Economic Engagement
    • The GCC region is diversifying its economic activities to include tourism, construction, and finance, providing new avenues for trade and investment for nations like India.
  • Indian Diaspora Influence
    • Approximately 8.9 million Indians reside in the Middle East, significantly influencing remittances, with about 30% of India’s foreign remittances originating from this region.
  • Strategic Positioning
    • Positioned along the critical Persian Gulf, GCC nations play a pivotal role in global trade routes.
    • Both India and the GCC are aligned in their pursuit of regional political stability and security.

India-GCC Relationships Overview

  • The Gulf Cooperation Council (GCC), lying directly across the Arabian Sea, stands as a key regional ally and a significant economic partner for India.
  • Notably, the GCC has become a principal trading and investment partner for India, enhancing both economic and strategic ties.
Diplomatic Engagements
  • India participated in its inaugural political dialogue with the GCC alongside the United Nations General Assembly in 2003.
  • In September 2022, India and the GCC reinforced their commitment through an MoU facilitating yearly dialogues between India’s External Affairs Minister and the rotating GCC presidency, enhancing bilateral communications.
Economic Interactions
  • The fiscal year 2023-24 saw India-GCC trade reaching USD 161.59 billion, with Indian exports at USD 56.3 billion and imports at USD 105.3 billion.
  • Economic ties have deepened, particularly influenced by the surge in oil imports due to global market fluctuations and post-pandemic recovery.
Trade Agreements
  • A pivotal Framework Agreement signed in August 2004 aims to bolster economic cooperation, setting the stage for the ongoing negotiations of a comprehensive India-GCC Free Trade Agreement, potentially invigorated by the recent India-UAE FTA.
Energy Collaborations
  • The GCC accounts for 35% of India’s oil and 70% of gas imports, underscoring critical energy dependencies.
  • India is expanding its Strategic Petroleum Reserve (SPR) initiative, with active interest and potential collaboration from GCC member states.
Diaspora and Financial Contributions
  • Approximately 8.9 million Indians reside in the GCC, making up about 66% of the overseas Indian community.
  • Remittances from the GCC constitute a significant portion of India’s inward financial transfers, though there has been a decline from over 50% in 2016-17 to around 30% in 2020-21.

-Source: Indian Express


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