The legal scrubbing process for the proposed India-Oman Free Trade Agreement (FTA) is underway, signalling a significant step towards enhancing economic ties between the two nations. Oman’s push to diversify its economy away from oil and gas, coupled with India’s quest for expanded market access across various sectors, sets the stage for mutually beneficial trade relations.
In the fiscal year 2023, India’s merchandise exports to Oman totaled $4.5 billion, comprising a substantial portion of Oman’s imports. Notably, petroleum products accounted for a significant share of India’s exports, with motor gasoline emerging as the largest petroleum product.
Imminent FTA Announcement
Sources familiar with the matter revealed that the India-Oman FTA is nearing announcement, with most outstanding issues resolved. The ongoing legal scrubbing process aims to finalise the deal, paving the way for its official announcement. The timing of the pact’s signing is crucial, with intentions to conclude it before general elections.
The India-Oman FTA holds strategic importance beyond mere economic benefits. It signifies India’s proactive foreign policy approach, aiming to bolster ties in the West Asia region. The agreement is poised to unlock new opportunities for Indian exports, fostering economic and strategic alliances in a region of critical importance.
Trade Dynamics and Potential Benefits
With over 83.5% of India’s goods exports to Oman facing a 5% import duty, the FTA promises significant advantages through duty elimination. Key sectors such as motor gasoline, iron, steel, electronics, machinery, aluminium oxide, and textiles stand to benefit from the agreement. However, certain duty-free exports from India to Oman may not see additional advantages under the FTA.
As legal processes progress and negotiations conclude, the impending India-Oman FTA heralds a new chapter in bilateral trade relations. With both nations poised to capitalise on the agreement’s potential, the FTA represents a significant milestone in advancing economic cooperation and mutual prosperity.
