India-Qatar FTA requires careful evaluation: GTRI
The Global Trade Research Initiative (GTRI) has said that India should cautiously evaluate the potential free trade agreement (FTA) with Qatar, particularly in the petrochemical sector as both countries are strong in this segment. India should ensure that tariff concessions on petrochemicals and energy-related imports do not undermine domestic industries. As per the joint statement issued after the meeting of Prime Minister Narendra Modi and Amir of Qatar Sheikh Tamim bin Hamad Al-Thani, the two sides agreed to explore the possibility of entering into a bilateral comprehensive economic partnership agreement (CEPA) with an aim to double bilateral trade to $28 billion by 2030. CEPA is a kind of FTA in which two trading partners either eliminate or significantly reduce customs duties on the maximum number of goods (90% to 95%) traded between them. In addition, they ease norms to promote trade in services and boost investments.
GTRI founder Ajay Srivastava has said that India has a well-developed domestic petrochemical industry that could face challenges if tariff reductions lead to an influx of cheaper Qatari imports, additionally India already has a significant trade deficit with Qatar, which could widen further post-trade pact if market access benefits are not balanced. The Indian imports from Qatar stood at $12.34 billion in 2023-24, with 85% of imports comprising LNG ($6.3 billion), butane, propane mostly for LPG production ($3.1 billion), and petroleum crude ($1.1 billion). Its exports were only $1.7 billion. Meanwhile, India's primary exports to Qatar include Basmati rice ($124 million), articles of iron and steel ($200 million), and machinery ($106 million).
In 2023-24, the bilateral trade between both the countries has declined to $14 billion from $18.77 billion in 2022-23. India received $1.5 billion of foreign direct investments from that country between April 2000 and September 2024. Qatar is a member of the Gulf Cooperation Council (GCC). GCC has six member countries -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). India already has an FTA with the UAE. It is also in the advanced stage to conclude talks for a similar pact with Oman.
