“The pact covering goods, services and investment sectors will take economic ties between India and the GCC (Gulf Cooperation Council) nations to a higher level,” said Abdulrahman Al-Rabeeah, chairman of the Saudi-Indian Business Council.

He was addressing an interactive meeting of a 33-member business delegation from Saudi Arabia at the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Al-Rabeeah said businesses have to take the lead and work with the government. “Investment and business opportunities from India in the areas of education, IT, tourism, health care, biotechnology, telecommunications and automobiles and components should be explored,” he added.

While the India-GCC FTA is expected to open a billion-strong consumer market for the Gulf countries, it will also benefit India substantially as the six-member bloc controls over 45 percent of the world's recoverable oil wealth and 20 percent of gas resources. The bloc also accounts for about a fifth of the global crude output.

The free trade deal, which will remove restrictive duties and push down tariffs on goods trading, is expected to provide Indian pharmaceutical and chemical industries a boost in their presence in the Gulf region.

Items having export potential from India to GCC countries include food products, pharmaceuticals, machinery and transport equipment, ceramic products, apparels and clothing, cotton and woven fabrics, plastic and rubber products, essential oils, perfumery and cosmetics besides iron and steel articles.

On his part, Saudi Ambassador Faisal Hassan Ahmed Trad urged Indian companies to increase investment in the Gulf nation. He pointed out that a framework agreement for the FTA has already been signed.

The potential sectors for investments by Indian entrepreneurs include information technology, software development, telecommunications, education, training and health care services, tourism and hotel industry, banking and financial services, oil, gas and petrochemicals, electricity, housing, road and rail network.

Reciprocating the Saudi gesture, ASSOCHAM Secretary-General D.S. Rawat said the Indian trade chamber will lead a 30-member delegation to Saudi Arabia in early May.

Two-way trade between India and the GCC could exceed $130 billion by 2013-14, up from $100 billion in 2009-10, said an official. While India-Saudi bilateral trade stood at to $21 billion in 2009-10, India’s exports to the Gulf nation rose to $3.90 billion in 2009-10.

Separately, New Delhi-based Intercontinental Consultants and Technocrats signed a consulting agreement with Alrabiah Consulting and Engineering Services at the meeting.

Indian Prime Minister Manmohan Singh visited Saudi Arabia in February 2010, the first by an Indian leader in 28 years. About a dozen political and economic deals were signed at the time.

Saudi Arabia pumped in FDI worth $31.5 million between April 2000 and August 2010 into the Indian economy. The main sectors that attracted the investments were electrical equipment, food processing, automobile, computer software and hardware, and telecommunications.