India and Oman have entered the fifth round of negotiations for a Comprehensive Economic Partnership Agreement (CEPA), reflecting the deepening economic ties between the two nations.
The two-day dialogue follows the official commencement of CEPA talks in November 2023, highlighting the mutual commitment to strengthening economic collaboration. Oman holds strategic importance as India’s third-largest export destination within the Gulf Cooperation Council (GCC) region.
The Global Trade Research Institute (GTRI) projects that the proposed CEPA could deliver substantial benefits to Indian exporters, particularly in sectors such as gasoline, iron and steel, electronics, and machinery, with potential gains estimated at $3.7 billion. Presently, Indian goods face an average import duty of 5 percent in Oman, impacting over 80 percent of Indian exports to the country.
Oman’s tariff structure ranges from zero to 100 percent, with the highest duties applied to select items like specific meats, wines, and tobacco products. The CEPA aims to reduce or eliminate these barriers, creating a more favorable trading environment.
India’s trade relationship with Oman has witnessed a downturn in recent times. Bilateral trade declined to $8.94 billion in the fiscal year 2023-24 from $12.39 billion in 2022-23. Indian merchandise imports from Oman saw a steep fall, dropping to $4.5 billion from $7.9 billion in the previous year. Petroleum products and urea form the bulk of these imports, accounting for over 70 percent, along with polymers, pet coke, gypsum, chemicals, and iron and steel.
The proposed agreement is expected to not only enhance the flow of traded goods by addressing customs duties but also facilitate improved services trade and investment between the two countries. This follows India’s successful partnership with the UAE under a similar agreement implemented in May 2022.
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