Other BriefingsOman-India FTA Negotiations Reportedly Conclude, But Indian Elections Will Delay Implementation
Indian news media are reporting that Oman-India CEPA negotiations have concluded but the trade deal now has to wait for the Indian elections over the summer. Once a fresh central government is sworn in New Delhi, the CEPA deal can be expected to be approved.
By Melissa Cyrill
Negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between India and Oman have reportedly concluded per Indian news media Mint. The imminent agreement, anticipated to be finalized post the formation of a new central government, promises to ignite a new era of trade cooperation and mutual prosperity.
India’s 2024 general elections are scheduled to begin April 19, will be conducted in seven phases, and counting of votes starts on June 4.
The Oman-India CEPA, designed to eradicate tariffs and streamline trade processes, holds immense potential to bolster Indian exports to Oman across a spectrum of industries. Notably, sectors such as petroleum products, textiles, electronics, pharmaceuticals, machinery, and iron and steel are poised to reap substantial benefits, enjoying enhanced market access and heightened competitiveness.
Currently, Oman ranks as India’s third-largest export destination among Gulf Cooperation Council (GCC) countries. Indian exports to Oman have grown from US$2.25 billion in FY2019 to US$4.48 billion in FY2023. Over 80 percent of Indian exports to Oman currently incur an average 5 percent import duty. Oman’s import duties span from 0 percent to 100 percent, including specific duties. Notably, a 100 percent duty applies to certain items such as meats, wines, and tobacco products.
India’s merchandise imports from Oman amounted to US$7.9 billion, with service imports standing at US$0.6 billion during FY23. India mostly imports petroleum products, liquefied natural gas (LNG), gaseous hydrocarbons, and chemical fertilizers from Oman.
Insiders familiar with the negotiations reveal that the CEPA encompasses provisions to foster an enabling environment for green, energy-efficient manufacturing, aligning with global sustainability objectives. This strategic convergence underscores the broader significance of the agreement, transcending conventional trade gains to champion environmentally responsible practices and economic resilience.
Beyond its economic ramifications, the CEPA positions Oman as a strategic manufacturing hub for Indian companies, unlocking new avenues for market penetration and export expansion. This strategic pivot not only amplifies India’s presence in the GCC region but also underscores its commitment to forging symbiotic partnerships founded on shared economic goals.
The impending CEPA assumes added significance against the backdrop of India’s upcoming general elections, underscoring bipartisan consensus on the imperative of deepening economic ties with Oman. With bilateral trade already scaling commendable heights, reaching US$12.39 billion in FY2023 from US$5 billion in FY2019, the CEPA is poised to act as a catalyst for sustained growth, job creation, and economic resilience in both nations.
The inclusion of provisions addressing labor mobility underscores the CEPA’s commitment to fostering inclusive growth and equitable opportunities for all stakeholders.
Moreover, the CEPA holds promise for Oman’s economic diversification endeavors, presenting a pathway to reduce dependence on oil exports and embrace a more resilient economic landscape. By extending preferential access to Indian goods and services, Oman stands to benefit from India’s expertise across various sectors, fostering innovation, and driving sustainable growth.
Anticipated gains following the Oman-India CEPA:
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