Despite tensions between India and Pakistan, India is on the verge of concluding a historic free trade agreement with Oman and extending trade negotiations throughout the Gulf.
Since the Gulf states have remained neutral and called for de-escalation throughout the recent India-Pakistan war, India is advancing its economic relationship with them by finalizing trade agreements.
India and Oman, its oldest strategic partner in the Gulf, are on the verge of negotiating a free trade agreement (FTA), according to a story published in the Economic Times.
Indian-Oman close relations
The Economic Times was informed by people with knowledge of the situation that the India-Oman free trade agreement is almost finished and that an official announcement may be made later this month.
According to the source who is involved in the negotiations, “There are only a few issues that need to be resolved with Oman, and an announcement could be made this month.”
In November 2023, negotiations on the Comprehensive Economic Partnership Agreement (CEPA) between India and Oman were formally launched.
India exported $4.42 billion worth of commodities to Oman between April and February of FY25, while importing $4.52 billion. More than 70% of the imports were made up of urea and petroleum products. Iron and steel, chemicals, pet coke, gypsum, and propylene and ethylene polymers are among the other main imports.
Light oils and preparations, ships and floating structures, aluminum oxide (apart from artificial corundum), rice, mechanical appliances and parts, airplanes, sunglasses, meat and edible meat offal, birds’ eggs, fruits, vegetables, spices, tea, and coffee are among India’s top export items.
The Double Taxation Avoidance Agreement (DTAA) between the two countries has also been revised to conform to international norms for cross-border taxation. Numerous cooperative enterprises have been formed between the two nations, demonstrating the continued strength of their investment connections.
The estimated value of joint venture investments in Oman as of December 2023 was $776 million. According to the Indian Embassy in Oman, Oman sent $597.14 million in foreign direct investment (FDI) to India between April 2000 and June 2024.
Increasing relations with other Gulf countries
According to the source, the Indian government is also “seriously considering” similar trade arrangements with other Gulf countries, such as Qatar. During the India-Pakistan crisis, Qatar stayed neutral, despite the fact that its emir visited New Delhi in February and indicated interest in significant investments in India.
India is now negotiating a more comprehensive trade agreement with the Gulf Cooperation Council (GCC), which consists of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain. The country has already inked a free trade agreement (FTA) with the United Arab Emirates.
The goal of these talks is to improve economic, energy, investment, and security cooperation with these nations.
