India-Oman free trade pact talks at advanced stage

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Muscat – Negotiations for the proposed free trade agreement (FTA) between Oman and India are in an advanced stage, with both countries aiming to finalise the pact soon, H E Amit Narang, Indian Ambassador to Oman, said on Tuesday.

The proposed India-Oman free trade pact, officially referred as the Comprehensive Economic Partnership Agreement (CEPA), will give a significant push to bilateral trade and investment ties between the two countries, H E Narang said while addressing an event organised by the Federation of Indian Chambers of Commerce & Industry (FICCI) in New Delhi.

“Discussions for a bilateral CEPA with Oman are at an advanced stage. We hope to conclude these discussions soon, which will significantly enhance not only trade but also bilateral investment ties,” H E Narang was quoted as saying by the Press Trust of India (PTI) news agency.

H E Narang also emphasised the potential for improving direct shipping links between India and Oman, noting that a substantial portion of Indian exports to Oman currently transit through the UAE. This indirect route affects the recorded trade figures between India and Oman.

According to the PTI report, H E Narang noted that India-Oman bilateral trade, which surpassed $12bn mark in the Indian financial year 2022-23, had moderated to $8bn in the 2023-24 financial year.

“Between 2021 and 2023, bilateral trade between India and Oman more than doubled—from $5bn to over $12bn. However, in the past financial year, trade has moderated to $8bn, primarily due to the dominance of hydrocarbons in bilateral trade,” H E Narang explained.

He further clarified that India’s imports of oil and fertilisers from Oman have seen a decline in value, reflecting the global decrease in the prices of these commodities.

H E Narang reiterated the need for enhancing direct shipping links, as much of India’s exports to Oman are currently routed through the UAE, and thus recorded in India-UAE trade figures.

He mentioned that with only two shipping lines currently operating, there is considerable potential for direct shipping, which could reduce the cost of bilateral trade and positively impact trade figures.

Oman is India’s third-largest export destination among the Gulf Cooperation Council (GCC) countries. India already has a trade agreement in place with the UAE, implemented in May 2022.