Indian Officials in Muscat for Free Trade Talks with Oman

By siliconindia  |  Wednesday, 13 December 2023, 09:05:19 AM IST

Indian Officials in Muscat for Free Trade Talks with Oman
Negotiations for a comprehensive Free Trade Agreement (FTA) between India and Oman are progressing rapidly, as a team of officials from the Department of Commerce is currently in Muscat for discussions. People familiar with the situation indicate that the Department of Commerce has established an internal deadline to conclude the agreement by the end of the month.
The development assumes significance since India and the six-member Gulf Cooperation Council (GCC) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) have not been able to begin negotiations for more than a year. This is due to differences pertaining to the terms of reference, especially with Saudi Arabia. If the trade works out, Oman will be the second GCC member after the UAE to ink an FTA with India. That apart, the proposed agreement is also expected to further strengthen India’s economic ties with West Asia.
In February 2022, India and the UAE inked a comprehensive economic partnership agreement (CEPA). According to sources, the framework of the India-UAE agreement is anticipated to serve as a model for the trade pact with Oman. Currently ranked as India's 29th largest trading partner, Oman has experienced substantial growth in bilateral trade. The figures rose from $3.15 billion in FY22 to $4.48 billion in FY23, reflecting a notable 42 percent year-on-year increase. Notably, nearly half of India's exports during the preceding financial year comprised petroleum products, primarily motor gasoline.
The Global Trade Research Initiative (GTRI), a think tank based in Delhi, has stated that India has the potential to significantly boost its exports following the Free Trade Agreement (FTA). Presently, more than 80 percent of Indian goods enter Oman with an average import duty of 5 percent, and there are minimal trade barriers in place.
"Over 83.5 percent of India’s goods exports, valued at $3.7 billion, currently face a 5 percent import duty in Oman. With the new FTA, these products, including major exports like motor gasoline, iron and steel, electronics, machinery and textiles, among other items, will benefit from the duty elimination", GTRI said. It added that about 16.5 percent of India’s exports to Oman are already entering duty-free. So, they will not see additional benefits from the FTA. Imports from West Asian nations are greater than exports and saw a 15.6 percent increase to $7.91 billion in FY23.

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