The proposed India-Oman Free Trade Agreement (FTA), which will boost India’s exports of several items ranging from electronics to textiles and also strengthen its economic and strategic foothold in West Asia, is ready to be signed once the process of legal scrubbing is done, sources have said.
“All issues pertaining to the India-Oman FTA have been sorted out and settled and the pact is almost ready to be signed. Only the legal scrubbing of the document remains which is happening right now. Following that, the top leadership will take a call on its announcement, which can also be done through a virtual event if required,” a source tracking the matter told businessline. The attempt is to sign the pact before India’s general elections, expected to be announced soon, the source added.
The pact, officially known as the India-Oman Comprehensive Economic Partnership Agreement (CEPA), is important for India. Oman ranks as the third-largest export market within the Gulf Cooperation Council (GCC) nations and bilateral trade has grown fast and steady.
India-Oman trade increased to $12.39 billion in 2022-23 from $5.4 billion in 2020-21. India’s exports were at $4.48 billion in 2022-23, while imports were at around$8 billion.
There is a huge potential for further growth as over 80 per cent of India’s exports to the country face a duty of 5 per cent, which can be brought down once the CEPA is in place, according to research body GTRI.
Export items that could benefit from duty cuts include motor gasoline, iron, steel and products, electronics, machinery, aluminium oxide, textiles and garments, boneless meat, essential oils, ferro silico manganese, and motor cars ($ 28 million), per the report.
India’s merchandise imports from Oman, which mostly comprise petroleum products and urea, but also include items like propylene and ethylene polymers, pet coke, gypsum, organic and inorganic chemicals, iron and steel and unwrought aluminium, also stand to benefit.
“As both sides are gaining from the FTA, negotiations progressed very fast. The formal talks began in November 2023 and many issues were settled in the first two rounds itself that were held close to each other,” the source said.
Oman’s ruler, Sultan Haitam bin Tarik’s state visit in December 2023 further pushed the negotiations. “The two leaders adopted the `India-Oman Joint Vision: A partnership for future’ which complemented the proposed CEPA,” an industry source pointed out.
The Commerce Department then sought further inputs from the industry for the last lap of the negotiations in January 2024, following which the deal was sealed, the source added.
Apart from economic benefits, the proposed India-Oman FTA could also result in strategic gains for India as Oman is an important member of the GCC, with which India is yet to sign an FTA, and the pact could help it cement its relationship with the Middle East region.