Delhi to speed up India-GCC FTA talks; agree with Kuwait to expand defence, energy ties

New Delhi: India on Sunday signed a Memorandum of Understanding (MoU) for defence cooperation with Kuwait and agreed to speed up negotiations for a Free Trade Agreement (FTA) with the Gulf Cooperation Council, a six-nation bloc currently led by the tiny Persian Gulf emirate.

New Delhi and Kuwait City discussed ways to expand the bilateral energy ties beyond the existing buyer-seller relationship to a comprehensive partnership. They also agreed to speed up negotiations for a Bilateral Investment Treaty.

Prime Minister Narendra Modi met Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah of Kuwait and agreed to elevate the bilateral relations to a strategic partnership.

PM Modi also had meetings with Crown Prince Sheikh Sabah Al-Khaled Al-Hamad Al-Mubarak Al-Sabah and Prime Minister Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah during his visit to Kuwait City – the first by a prime minister of India in 43 years – on Saturday and Sunday.

Modi also received from the Amir of Kuwait “The Order of Mubarak Al-Kabeer”, the highest national award of the West Asian nation. “I dedicate this honour to the people of India and to the strong friendship between India and Kuwait,” he posted on X.

The MoU for defence ties will provide the required framework to further strengthen bilateral cooperation, including through joint military exercises, training of military personnel, coastal protection, maritime safety, joint development, and production of military hardware.

Kuwait is among India’s top trading partners, with bilateral trade valued at Rs 88,939 crore ($10.47 billion) in 2023-24. India’s exports to Kuwait increased from Rs 13,251 crore ($1.56 billion) in 2022-23 to Rs 17,838 crore ($2.1 billion) in 2023-24, registering an annual growth of 34.7 per cent. India’s imports from Kuwait dropped from Rs 1,03,975 crore ($12.24 billion) in 2022-23 to ($8.3 billion) in 2023-24.

The two sides noted that trade was an enduring link between the two countries and emphasised the potential for further growth and diversification in bilateral trade.

With Kuwait being India’s sixth largest crude oil supplier and meeting 3% of the country’s energy needs, the two leaders discussed avenues to transform the cooperation from a buyer-seller relationship to a comprehensive partnership with greater collaboration in upstream and downstream sectors.

They expressed keenness to support companies of the two countries to increase cooperation in the fields of exploration and production of oil and gas, refining, engineering services, petrochemical industries, and new and renewable energy. Both sides also agreed to discuss participation by Kuwait in India's Strategic Petroleum Reserve Programme, according to a joint statement issued after the meeting between the two leaders.

The investments by the Kuwait Investment Authority in India exceed Rs 84,947 crore ($10 billion).

“We discussed cooperation in key sectors like pharmaceuticals, IT, FinTech, Infrastructure, and security. In line with the close ties between our nations, we have elevated our partnership to a strategic one and I am optimistic that our friendship will flourish even more in the times to come,” Modi posted on X after the meeting with Amir of Kuwait.

The prime minister and the ruler of the Persian Gulf nation recognized the need for closer and greater engagement between investment authorities in Kuwait with institutions, companies, and funds in India. They encouraged companies of both countries to invest and participate in infrastructure projects.

They also directed the concerned authorities of both countries to fast-track and complete the ongoing negotiations on the Bilateral Investment Treaty, according to the joint statement.

Kuwait currently holds the presidency of the GCC, which also comprises Bahrain, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

The GCC is currently India’s largest trading partner bloc with bilateral trade reaching Rs 1,37,26,58,57,30,000 crore ($161.59 billion) in 2023-24. The six-nation bloc accounts for 15.8% of the total trade of India, more than the European Union.

India and the GCC had in 2022 agreed to start negotiations for a free trade agreement.

The two sides expressed confidence that the growing India-GCC cooperation will be further strengthened under the presidency of Kuwait. They welcomed the outcomes of the inaugural India-GCC Joint Ministerial Meeting for Strategic Dialogue at the level of Foreign Ministers held in Riyadh on September 9.

Kuwait assured full support for deepening the India-GCC cooperation under the recently adopted Joint Action Plan in areas including health, trade, security, agriculture and food security, transportation, energy, and culture, amongst others.

The two sides also stressed the importance of the early conclusion of the India-GCC Free Trade Agreement, according to the joint statement issued before the prime minister’s departure from Kuwait City for New Delhi on Sunday.