Other BriefingsOman-India Free Trade Agreement Stalls Over Market Access Demands
The status of the proposed Free Trade Agreement (FTA) between Oman and India has reached a deadlock as Oman has requested revisions to India’s market access offer on certain products. The stalemate arises despite the completion of negotiations in March, with Indian officials expressing reluctance to revisit inter-ministerial consultations that were previously finalized.
An insider revealed that India is cautious about reopening talks, partly due to lessons learned from past agreements, such as the UAE-India Comprehensive Economic Partnership Agreement (CEPA) signed in 2022. That deal resulted in a surge of imports of precious metals and food items, raising concerns about unfavorable trade balances. Given Oman’s membership in the Gulf Cooperation Council (GCC) alongside the UAE, Indian policymakers are wary of replicating similar challenges.
Additionally, some officials argue that Oman’s relatively smaller economy may limit the potential gains for India, making it essential to secure a clear advantage before signing the agreement.
A key sticking point in the negotiations has been Oman’s demand for greater market access for polyethylene and polypropylene—critical intermediates for industries like plastics, medical devices, and electronics. These petrochemical products currently attract a 7.5 percent import duty in India. While India has indicated willingness to impose a cap or tariff rate quota (TRQ) on these imports, the fresh demands have delayed progress.
Negotiations for the Oman-India FTA formally began in November 2023, with most chapters finalized by January 2024. The original plan aimed to sign the agreement after India’s 2024 general elections. However, Oman’s push for revised terms has placed the deal in limbo.
Meanwhile, a senior government official emphasized that India’s broader FTA agenda remains on track, with ongoing negotiations for agreements with the UK and the European Union progressing as scheduled. “Contrary to speculation, India’s FTA talks are not on hold,” the official stated to the media.
This deadlock underscores India’s cautious approach to trade agreements, prioritizing long-term benefits and balanced trade dynamics over what New Delhi’s stakeholders view as hasty commitments.
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