Last month, Kochi saw the launch of the first-ever Track 1.5 diplomacy event that discussed India-Gulf relations. The Centre for Public Policy Research hosted the Kochi Dialogue 2025 in collaboration with the Policy Planning & Research Division in the Ministry of External Affairs.
The dialogue focused on the relationship between India and GCC countries, which are like an extended neighbourhood of India as they are home to one of the largest Indian diasporas in the world. The two-day event discussed maritime security, trade, economy, investments, healthcare, education and a host of issues concerning the diaspora.
Speakers from various GCC countries brought out their perspectives and deliberated on how to improve the trade and business relationship between India and Gulf countries. Jasem Mohamed AlBudaiwi, the secretary general of the Gulf Cooperation Council (GCC), in his special address at the Kochi Dialogue, highlighted the need to initiate negotiations for a Free Trade Agreement with India.
The session on `Trade, Economy and Investments' underscored the role that the Comprehensive Economic Partnership Agreement (CEPA) which came into effect on May 1 , 2022, has played in boosting the trade relations between India and the UAE. It has removed tariffs on 97% of goods, benefitted MSMEs and led to a 35% jump in increasing trade opportunities between the countries.
The Malabar Group, which also partnered for the event, highlighted the opportunities that CEPA opened up in the Middle East countries in the gems and jewellery sector. The UAE offers zero duty on gold exports under CEPA, which attracts jewellery exporters such as Malabar to expand their business in the UAE.
Some of the issues that the gems and jewellery sector needs policy reforms for were also deliberated, which include the mandatory minimum value addition of 3.5% prescribed in the foreign trade policy for exports for plain gold jewellery and 6 % for studded jewellery, while the same gold is sold in the Indian market with 1-2% value addition. These value additions, as specified in the Handbook of Procedures under Foreign Trade Policy, are limiting the opportunities for the sector. These value additions are in place due to the risk of roundtripping; however, the suggestion was to reduce the levels. Further, CEPA is not utilised to its fullest at present when 200 tonnes of export is allocated in the sector, thus showing the potential opportunities in the sector.
GCC countries also offer growth prospects for Indian businesses, particularly in healthcare, tourism, tech-driven startups, and sustainability-driven sectors. The capital market in the UAE is actively seeking new investment opportunities, especially in India, where venture capital funds are increasingly concentrating their efforts.
The speakers emphasised the need for a conducive environment to attract investment, citing the importance of addressing legal hurdles and providing timely solutions. Factors like transparency and effective communication are critical in making India an attractive investment destination.
Some of the suggestions to increase investments were the harmonisation of tax systems and India's use of the UN Tax Model, which are vital for smooth international trade and investment. A standardisation of IFRS in Kuwait could unlock opportunities for chartered accountants and ease decision-making processes.
The dialogue focused heavily on the healthcare sector, with Kerala serving as a major hub for specialised doctors and hospitals. The GCC healthcare sector is highly competitive, and there is a need for quality exams and regulatory frameworks to ensure India’s doctors remain relevant. However, the healthcare partnership between India and the GCC is currently experiencing a crisis.
While Indian hospitals once dominated the region, the situation has changed, with only 10–15% of the healthcare provider industry now being from India. Indian doctors bring unmatched skills and experience; however, the cost and regulatory structures in the UAE make treatment less viable. The insurance sector, a key player in healthcare in Gulf countries with almost 95% penetration, is posing problems for the hospitals in the region due to its policies of treating all types of cardiac or neurosurgeries under one category and its lack of differentiation between secondary and tertiary healthcare.
The Kochi Dialogue acted as a platform for raising the policy and legal barriers faced by the business community in operating in the GCC countries. The dialogue participants felt that the Kochi Dialogue, an annual event, will be a great platform to discuss the foreign policy issues affecting the business and investment community operating between India and GCC countries to get their issues heard at the highest level of policy makers.