India and Bahrain have exchanged draft terms of reference (ToR) for initiating negotiations on a Comprehensive Economic Partnership Agreement (CEPA), the Ministry of Commerce and Industry said on Monday. The move marks a key step toward deepening bilateral trade and investment ties between the two countries.
According to the ministry, the ToR lays down the framework and scope of the proposed trade pact. India has also shared the composition of the India-Bahrain Joint Working Group (JWG) on Trade and Investment at the Joint Secretary level, with the formal establishment of the JWG currently under process.
In parallel, discussions between India and the Gulf Cooperation Council (GCC) are continuing to finalise the ToR for a long-pending free trade agreement. The ministry noted that ToR negotiations with Qatar have been “substantially finalised”.
India and the GCC had launched FTA talks with the signing of a framework agreement in 2004, followed by two rounds of negotiations in 2006 and 2008. However, the GCC suspended negotiations globally in 2011. Engagements resumed after the GCC Secretary General visited India in November 2022. A revised ToR was shared by the GCC in October 2023, and both sides have since exchanged updated versions, with discussions ongoing to conclude the process.
The renewed push for trade agreements with West Asian partners comes at a time when India is seeking to diversify export markets. On December 18, India signed a CEPA with Oman, granting duty-free access to 98% of Indian exports—including textiles, agricultural products and leather goods—and is expected to provide an additional $2 billion boost to exports over the next two to three years.
The Oman CEPA also includes provisions to ease employment norms for Indian companies operating in the Gulf nation, allowing them to staff up to 50% of their workforce from India-based offices.
Officials said the proposed agreements with Bahrain and the broader GCC region would help Indian exporters mitigate the impact of steep tariffs imposed by the Trump administration on Indian goods, while strengthening India’s trade footprint in West Asia—a key gateway to Africa and Europe.
