Central Idea

India and Oman are rapidly progressing in their negotiations for a Comprehensive Economic Partnership Agreement (CEPA), expected to be signed in January 2024.
The second round of talks was recently concluded in Muscat, indicating both countries’ eagerness to finalize the deal.

India-Oman Trade Relations

Export Destination: Oman is India’s third-largest export destination in the Gulf Cooperation Council (GCC), making the FTA crucial for enhancing Indian exports.
Current Trade Dynamics: Over 80% of Indian goods currently enter Oman with an average import duty of 5%, and the FTA aims to reduce these barriers.

Boost in Exports: The agreement is expected to significantly increase Indian exports in various sectors, including gasoline, iron and steel, electronics, and machinery.
Key Export Sectors: Sectors like motor gasoline, iron and steel products, electronics, machinery, textiles, plastics, boneless meat, essential oils, and motor cars are likely to benefit from duty elimination.

Oman’s Economy: With a GDP of about USD 115 billion and a higher per capita income compared to India, Oman presents a market for diversified and higher-value Indian goods and services.
Bilateral Trade Growth: India-Oman bilateral trade reached USD 12.39 billion in 2022-23, with Indian exports and imports showing significant growth.
Oman’s Position: Oman’s strategic location in the Arabian Gulf region, with key ports along the Arabian Sea and the Gulf of Oman, is of utmost importance to India.
Historical Ties: The longstanding connection between Oman’s ruling family and India has fostered strong bilateral relations, with a significant Indian community contributing to these ties.

Defense and Security: The partnership, strengthened by a MoU signed in 2005, includes joint exercises and cooperation in maritime security.
Trade and Commerce: Bilateral trade and joint ventures are key pillars of engagement, with significant Indian investment in Oman.

Space and Rare Earth Metals: Prospects for cooperation in space exploration and rare earth metals exploration are on the horizon.
Connectivity Projects: Oman could play a crucial role in India’s proposed connectivity corridors and infrastructure projects in West Asia.

Shared Interests: The deepening India-Oman relationship, marked by shared interests and mutual respect, positions Oman as India’s gateway to West Asia.
Broader Engagement: As India seeks to expand its global outreach, particularly in West Asia, Oman’s strategic importance and balanced foreign policy make it a key ally in the region.