India-Oman Free Trade Deal Set to Unlock Billion-Dollar Market Access

India and Oman signed a landmark free trade agreement on Thursday. The deal was signed in Muscat by top ministers from both nations. It promises to reshape economic ties between the two strategic partners.

This pact grants immediate duty-free access for most Indian goods. According to Reuters, it is a key move to diversify India’s export markets. The agreement will take effect early next year.

Economic Benefits and Key Export Sectors

Oman will eliminate tariffs on over 98% of its tariff lines. This covers 99.38% of India’s current exports to the Sultanate. Key beneficiary sectors include textiles, agriculture, and leather goods.

In return, India will reduce import duties on Omani products. These include dates, marble, and various petrochemicals. The deal aims to boost bilateral trade significantly.

Bilateral trade reached about $10.5 billion last fiscal year. India’s exports were valued at $4 billion. The new pact is expected to increase these figures substantially.

A Strategic Partnership Beyond Commerce

The agreement deepens an already strong strategic relationship. Oman is India’s closest defense partner in the Gulf region. The two nations conduct joint military exercises across all service branches.

Oman supports Indian interests in crucial regional forums. These include the Gulf Cooperation Council and the Arab League. The partnership is bolstered by a large Indian diaspora of nearly 700,000 people.

This is India’s second trade deal with a GCC nation. A similar pact with the UAE was implemented in 2022. Talks with other Gulf countries like Qatar are expected to follow.

This India-Oman free trade agreement marks a pivotal step in India’s West Asia strategy, securing vital market access and reinforcing a decades-old strategic partnership.

Thought you’d like to know

When will the India-Oman trade deal take effect?

The agreement is expected to be implemented in the first quarter of next year. The legal and ratification processes are currently underway in both nations.

What are India’s main exports to Oman under the pact?

Key Indian exports gaining duty-free access include textiles, agricultural products, and leather goods. Over 99% of India’s current exports to Oman are covered by the tariff concessions.

Why is Oman a strategically important partner for India?

Oman is India’s closest defense ally in the Gulf and a key maritime security partner. It also backs India’s interests in important regional multilateral forums.

How does this deal compare to India’s UAE trade agreement?

This is India’s second comprehensive trade pact with a GCC country after the UAE deal. It follows a similar model of deep tariff cuts on a wide range of goods and services.

What is the significance of the Indian diaspora in Oman?

Nearly 700,000 Indian nationals live and work in Oman. They send approximately $2 billion in remittances back to India annually, strengthening economic links.