India (Commonwealth) _ Indian Trade Ministry emphasized that following high-level discussions between Union Trade Minister Piyush Goyal and his Omani counterpart, Qais bin Mohammed Al Yousef, the Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is almost finalized.
The ministry released a statement saying that Goyal’s two-day visit to Oman, which ended on Tuesday, advanced bilateral trade and investment talks.
The CEPA, which both ministers referred to as a “transformative agreement” that would open up new chances for companies in both nations, was the main topic of discussion during the negotiations.
The presidents emphasized that the agreement could improve economic cooperation in areas including energy, infrastructure, and technology and expressed hope that it would be finalized shortly.
Parallel to this, India and Oman agreed to streamline procedures and bring their Double Taxation Avoidance Agreement (DTAA) into compliance with international norms by signing a protocol to alter it. It is anticipated that this action will lower trade obstacles and promote increased economic cooperation.
Given Oman’s position as a gateway to the markets of the Gulf Cooperation Council (GCC), India’s expanding engagement with Oman is strategically significant.
The CEPA is anticipated to improve market access for Indian companies operating in Oman and stimulate Omani investments in India, given the sizeable commerce that currently exists between the two countries. By lowering compliance burdens and fostering a business-friendly atmosphere, the revised DTAA strengthens the economic framework even more.
Nonetheless, there have been prior concerns expressed about possible abuse of the trade agreement. India has already voiced concerns that China would take advantage of Oman to import items into the country.
Oman’s demand for changes to India’s market access offer for specific items caused the CEPA negotiations, which were almost finished in March, to stall. Over 80% of Indian exports to Oman currently incur an average 5% import tariff, despite Oman being the third-largest export destination for India among the GCC nations.
India’s exports to Oman totaled $4.47 billion in 2023–2024, while its imports came to $4.5 billion. More than 70% of India’s imports from Oman are made up of urea and petroleum products. Iron and steel, pet coke, gypsum, chemicals, and propylene and ethylene polymers are among the other important imports.
According to an official statement released on Tuesday, India and Oman have decided to modify the DTAA in order to bring it into compliance with international norms for cross-border taxation, streamline processes, and encourage increased collaboration in tax-related areas.
With an expected $8.94 billion in bilateral commerce in fiscal year 2023–2024, Oman is one of India’s most important economic partners. India has become a significant market for Oman’s exports of non-oil and crude oil.
After Saudi Arabia, India ranked as Oman’s third-largest non-oil export market and fourth-largest crude oil market in 2023.
As Oman strives to diversify its economy under its Vision 2040, emphasizing the promotion of clean energy and other industries while lowering reliance on oil earnings, these economic linkages are anticipated to deepen even more.
Oman is optimistic that the deal, which lowers goods tariffs, will be finalized this year. Additionally, it will draw investment and facilitate commerce in services, enhancing the two countries’ economic ties.
However, Oman’s request for changes to some market access provisions has delayed the pact’s finalization.It is anticipated that the CEPA will increase Indian exports to Oman, especially in industries like equipment, chemicals, and petroleum products.
Petroleum products and urea are two of Oman’s main imports to India, accounting for more than 70% of overall imports.
The Global Trade Research Institute (GTRI) estimates that if the deal is finalized, Oman may witness a major increase in Indian goods valued at about $3.7 billion, including machinery, electronics, iron and steel, and petroleum.In November 2023, New Delhi and Muscat hosted two rounds of the CEPA negotiations.
