India is postponing trade negotiations with Israel and the Gulf Cooperation Council, viewing them as part of a broader strategy to access over 75% of global trade at favourable tariff terms, as regional instability and US tariffs influence its export ambitions.
India has shifted from describing its trade talks with Israel and the Gulf as a casualty of this year’s regional conflict to presenting them as part of a much larger export plan. In June, Piyush Goyal, India’s commerce and industry minister, said negotiations with Israel and the six-country Gulf Cooperation Council were “temporarily stalled”. By the first week of September, he was again listing both agreements among the deals that he says could help India secure preferential access to around three-quarters of world trade, so long as the tariff terms beat those available to rival exporters. (economictimes.indiatimes.com)
The immediate signal came at the annual session of the Automotive Component Manufacturers Association of India in New Delhi on 2 September, where Goyal said the agreements with Israel and the GCC would be completed “as soon as things stabilize over there”. The bloc brings together Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain. Sergio Gor, the US ambassador to India, also addressed the gathering, underlining how closely New Delhi is now linking trade negotiations to supply-chain strategy and manufacturing ambitions. (ndtvprofit.com)
That matters beyond trade diplomacy. NDTV Profit, carrying Bloomberg’s report, said the Israel timetable had been thrown off after Prime Minister Narendra Modi’s February visit to Jerusalem by the conflict that followed US and Israeli strikes on Iran, a shock that disrupted supply chains worldwide. India is especially exposed to such turmoil because it imports nearly 90% of its crude oil. At the same event, Goyal also argued that India was seeking similar arrangements to improve access to critical minerals, while Gor said Washington wanted to work with India on that front “because we trust India”. (ndtvprofit.com)
The GCC track, at least, was already well advanced before the latest violence. A Press Information Bureau statement issued on 24 February said Goyal and Jasem Mohamed Albudaiwi, the GCC secretary-general, signed a joint statement in New Delhi formally launching negotiations, after terms of reference had been agreed on 5 February. The same official release described the GCC as India’s largest trading-partner bloc, with bilateral trade of USD 178.56 billion in the 2024-25 financial year, and said cumulative GCC investment in India had exceeded USD 31.14 billion by September 2025. On the Israel side, The Economic Times reported that the first round of FTA talks started on 24 February, the same day the GCC launch was announced. (pib.gov.in)
The June pause was therefore a break in momentum rather than a collapse in the process. Speaking at the India-Greece Business Forum on 30 June, Goyal said talks with Israel and the GCC were stalled while India remained in active negotiations with Chile, Mexico, the Southern African Customs Union, the Eurasia bloc and Mercosur, and was in “very advanced” discussions with Canada. The same appearance showed how widely New Delhi is now casting its trade net: Goyal said India and Greece should aim to double their USD 1.3 billion trade by 2030, and The Economic Times also reported that India had begun FTA negotiations with the Maldives that week. (economictimes.indiatimes.com)
By 3 September, Goyal was framing the Gulf and Israel agreements less as stand-alone political prizes than as pieces of a broader tariff architecture. Moneycontrol reported him saying that, alongside possible deals with Canada, Mexico, Chile, Mercosur and SACU, and reviews of India’s arrangements with ASEAN, South Korea and Japan, the pipeline could deliver access to “75 percent of global trade at a rate lower than competitors”. Press Trust of India, in a report carried by Business Standard, said Goyal linked that ambition to India’s existing nine FTAs, which he said already cover economies with about USD 60 trillion in GDP and give Indian exporters preferential access to nearly two-thirds of global trade. (moneycontrol.com)
He has also been explicit about what comes after the paperwork. Moneycontrol said Goyal argued that the headline share of global trade was less important than whether India could win tariff terms better than Bangladesh and Vietnam; once that happened, performance would depend on Indian producers’ own scale, quality and reliability. The Indian Express reported a sharper warning from the minister at a commerce ministry workshop: “No transhipment should happen in India” and “We should be trusted partners of the world.” The paper said he made those remarks after the US accused more than 40 countries, including India, of acting as a shadow network for Chinese goods, and after Washington imposed an additional 10% tariff on several countries, including India, from 24 July. (moneycontrol.com)
That leaves the next test in the US rather than the Gulf. Business Standard and The Indian Express both reported Goyal saying India would only announce the final terms of a bilateral trade agreement with Washington once it receives a tariff edge over competing exporters. Both publications also said he is due in Milwaukee in late September for the G20 trade ministers’ meeting and bilateral talks with US Trade Representative Jamieson Greer. If those discussions produce movement, they will offer the clearest guide yet to how India intends to finish the Gulf and Israel negotiations too: not simply when the region is calmer, but when New Delhi believes the commercial terms are decisively in its favour. (business-standard.com)
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