In a significant move to deepen economic ties, India and the Sultanate of Oman are poised to sign a landmark free trade agreement this weekend. The pact, officially known as the Comprehensive Economic Partnership Agreement (CEPA), will be formally inked in Muscat on March 16, 2024.
Strategic Deal in the Gulf Region
The agreement marks a crucial step in India's strategy to strengthen economic partnerships with key nations in the Gulf region. Oman is a major strategic partner for India in the Middle East, with robust ties spanning energy security, defense, and maritime cooperation. The CEPA is expected to provide a substantial boost to bilateral trade and investment flows between the two nations.
Official sources confirmed that the legal scrubbing of the agreement text has been successfully completed. This paves the way for the final signing ceremony. The deal has been under negotiation for a considerable period, with both sides working diligently to address various sensitivities and create a balanced, mutually beneficial outcome.
Boosting Trade and Economic Integration
The India-Oman CEPA is designed to eliminate or significantly reduce tariffs on a vast array of goods traded between the countries. It will also address barriers to trade in services, facilitate investments, and streamline trade procedures. This is anticipated to make Indian exports more competitive in the Omani market and vice-versa.
Key Indian sectors likely to benefit include:
- Textiles and Apparel
- Automobiles and Auto Components
- Engineering Products
- Chemicals and Pharmaceuticals
- Agricultural and Processed Food Products
For Oman, the agreement opens doors to greater market access for its downstream petrochemical products, certain agricultural items, and services. It also aims to attract Indian investment into Oman's growing sectors, including logistics, manufacturing, and tourism.
A Partnership with Deep Roots
The economic relationship between India and Oman is already substantial. Oman is India's third-largest export destination within the Gulf Cooperation Council (GCC). Bilateral trade stood at approximately $12.39 billion in the 2022-23 financial year. Indian exports accounted for about $4.48 billion of this total, while imports from Oman were around $7.9 billion, dominated by crude oil.
Beyond trade, the Indian community in Oman, numbering nearly 700,000, forms the largest expatriate group in the Sultanate and plays a vital role in its economy. The CEPA is expected to create new opportunities for Indian professionals in sectors like IT, healthcare, and financial services.
The signing of this agreement places Oman among the select group of countries with which India has a comprehensive trade pact in the region, following the UAE. It underscores India's commitment to engaging with its extended neighborhood through enhanced economic integration. The successful implementation of the India-Oman CEPA is projected to be a win-win, fostering job creation, economic diversification, and a more resilient supply chain for both nations.
