India stands to gain significantly from its proposed free trade pact with Oman, particularly in sectors such as petroleum, steel, electronics and textiles, as over 80 per cent of its exports to the country currently face a five per cent import duty which could be eliminated, according to an analysis by research body Global Trade Research Initiative (GTRI).
The Commerce & Industry Ministry is taking inputs from various stakeholders to strengthen its negotiating stance for the India-Oman Comprehensive Economic Partnership Agreement (CEPA) that could significantly boost exports to the country annually valued at $4.3 billion, a source tracking the matter told businessline.
“The Commerce Department has begun negotiations with Oman on a bilateral CEPA and is simultaneously continuing its consultations with line-Ministries and other stakeholders to ensure that it gets the most out of the pact,” the source said.
Reduction/elimination in import duties under the CEPA will benefit a vast majority of Indian exports to Oman, as over 83.5 per cent of India’s goods exports, totalling about $3.7 billion, currently face a five per cent import duty in Oman, the GTRI analysis noted. GTRI is founded by Ajay Srivastava, trade expert and former Indian Trade Service officer.
“With the new FTA (with Oman), these products, including major exports like motor gasoline ($1.7 billion), Iron, Steel and products ($235 million), Electronics ($135 million), Machinery ($125 million), aluminium oxide ($126 million), textiles and garment ($110 million), alumina calcined ($105 million), plastics ($64 million), boneless meat ($50 million), essential oils ($47 million), ferro silico manganese ($43 million), paper, board ($30 million), motor cars ($28 million), will benefit from duty elimination,” per the report.
India’s merchandise imports from Oman, at $7.9 billion in 2022-23, also stand to benefit from the free trade pact. Key imports from the country include petroleum products ($4.6 billion) and urea ($1.2 billion), which account for 73 per cent of imports, while other significant imports comprise propylene and ethylene polymers ($383 million), pet coke ($265 million), gypsum ($115 million), organic and inorganic chemicals ($417 million), iron and steel ($62 million) and unwrought aluminium ($95 million), it pointed out.
However, most of these imports are raw materials and input to industries, and India has opened most such imports from other FTA partner countries, the analysis further noted.
“The India-Oman CEPA, while offering direct economic benefits through import duty reductions, also serves a larger strategic role in India’s foreign policy. While acknowledging the limitations set by Oman’s smaller economic size and population, the agreement’s true value lies in its potential to open doors for India in the Middle East, fostering economic and strategic ties in a region of critical importance,” it stated.