India-Gulf FTA Talks Delayed to Second Half Amid Iran War, Complex GCC System

• India and the Gulf Cooperation Council (GCC) will likely hold the first round of FTA negotiations in the second half of the year, delayed by the ongoing Iran war and the GCC's complex decision-making process.
• The West Asia crisis, including US-Israel strikes on Iran and subsequent retaliation, has disrupted key shipping routes like the Strait of Hormuz, impacting global oil and LNG flows.
• Gulf countries face temporary oil terminal shutdowns, higher shipping costs, and export delays, while India experiences increased energy costs and logistics hurdles due to disruptions.
• The GCC's internal review process, aligning on sensitive sectors, negotiating positions, and tariff lines, also contributes to the delay in formal talks.
• Despite delays, the FTA is significant as the GCC is India’s largest trading partner in West Asia, with bilateral trade exceeding $178 billion in FY25 and hosting 10 million Indians.