Paper: GS – II, Subject: International Relations, Topic: India’s Relations with Other Nations, Issue: India – Oman Relation.
Context:
India and Oman signed a Comprehensive Economic Partnership Agreement (CEPA) during Prime Minister Narendra Modi’s visit to Muscat, marking a major step in deepening India’s economic engagement with the Gulf.
Key Takeaways:
Key Provisions of the India–Oman CEPA:
- Duty-Free Access: Oman will provide duty-free access on 98.8% of its tariff lines, covering about 99.38% of India’s exports.
- India’s Commitments: India will liberalise tariffs on 77.79% of imports from Oman, accounting for 94.81% of value of Omani imports.
- Sectoral Coverage:
- Goods: Engineering goods, textiles, gems & jewellery, chemicals, agricultural products.
- Services: IT, IT-enabled services, healthcare, education, logistics.
- Investment Facilitation: Improved protection, transparency, and ease for cross-border investments.
- Rules of Origin: Safeguards to prevent misuse and trade deflection.
Why Oman Matters to India:
- Oman is a strategic Gulf partner with a tradition of neutrality and regional mediation.
- Bilateral trade stood at ~$4.02 billion (2023–24).
- Oman accounts for ~0.9% of India’s total imports, but holds high strategic value due to location near the Strait of Hormuz.
- Strong defence, maritime security, and energy cooperation already exist.
Economic & Strategic Significance:
- Export Boost: Enhances competitiveness of Indian products in the Gulf and Africa.
- Trade Diversification: Reduces dependence on traditional markets amid global trade uncertainties.
- Services Push: Benefits India’s strength in IT, professional services, and healthcare.
- Supply Chain Integration: Supports India’s integration into Gulf-centric value chains.
- Geopolitical Signal: Strengthens India’s footprint in West Asia and complements initiatives like IMEC.
Challenges & Concerns:
- Limited immediate gains for some sensitive Indian sectors due to tariff liberalisation.
- Need for effective utilisation by MSMEs.
- Ensuring strict enforcement of rules of origin.
Way Forward:
- Create export facilitation cells for MSMEs targeting Oman.
- Leverage CEPA to attract Gulf investment into Make in India.
- Align CEPA with broader West Asia strategy covering energy transition, logistics, and connectivity.
The India – Oman CEPA is not just a trade deal but a strategic economic partnership. By unlocking duty-free access and services opportunities, it strengthens India’s West Asia engagement and supports long-term growth, resilience, and regional integration.
https://www.thehindu.com/business/Economy/india-oman-free-trade-agreement/article70411281.ece
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