M.V.P.C. Shastry, joint secretary in the ministry of commerce (left), and S. Nundy, former president of BNCCI, in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta, May 2: The Centre has proposed a plan to set up an Indo-Gulf Co-operation Council Investment Forum to facilitate a free trade agreement (FTA) between the two regions.

GCC, which consists of six cash-rich West Asian countries, is looking at India as a growth market and investment destination.

However, foreign direct investment (FDI) from GCC has been much below its potential.

“They (GCC) are not into investment in the manufacturing sector. India should create a platform like India-GCC Investment Forum to attract GCC funds,” said M.V.P.C Shastry, joint secretary in the ministry of commerce.

Speaking at a regional conference on India-GCC Free Trade Agreement organised by the Bengal National Chamber of Commerce and Industry today, Shastry said apart from traditional sectors like oil and petrochem, real estate and service sectors also have great potential.

He added that GCC institutions and individual businessmen are keen to invest in India.

The commerce ministry is convening such meetings in major cities of the country to prepare for FTA negotiations.

The framework agreement on economic co-operation, signed in August 2004, commits the two sides to sign the FTA in goods, services and also co-operate in the area of investment.

Shastry said the process with GCC would not be easy. “It will be a complex deal,” he added.

He requested industry to provide a feedback on the FTA deal.

For instance, oil and metal industries have expressed concerns as these industries have access to cheap fuel in GCC countries.

Shastry said companies must identify the non-tariff barriers that they could be facing in GCC countries and bring it to the notice of the ministry.