Niti Report Flags Widening CAD and West Asia Instability Impacting India-Gulf FTA

A NITI Aayog Trade Watch Report for Q4 2026 highlights concerns over India's widening Current Account Deficit (CAD). The report states that instability in West Asia has stalled the India-Gulf Cooperation Council Free Trade Agreement (FTA), hindering trade diversification and market access. NITI Aayog vice chairman Suman Bery emphasized that FTAs are a reciprocal tool for market access, affecting both India and its partners.

The NITI Aayog's quarterly Trade Watch Report, released for the quarter ending December 2026, has raised an alarm regarding India's widening Current Account Deficit (CAD). A significant point of concern detailed in the report is the geopolitical instability in West Asia, which has adversely impacted the progress of the proposed Free Trade Agreement (FTA) between India and the Gulf Cooperation Council (GCC). This delay, according to the report, is impeding India's efforts towards trade diversification and securing better market access. Suman Bery, the NITI Aayog vice chairman, underscored the reciprocal nature of FTAs, stating that they are not a 'one-way street'. He explained that while India views FTAs as a means to gain market access, other nations equally perceive them as tools for their own market entry. This perspective highlights the complex negotiation dynamics and the challenges in forging such agreements amidst regional volatility, further exacerbating concerns over the CAD and India's trade prospects in the region.