Commerce Minister Piyush Goyal stated on Monday as the trade agreement went into effect that India's Comprehensive Economic Partnership Agreement (CEPA) with Oman opens the door to greater access to the Gulf Cooperation Council (GCC) nations and East Africa in addition to providing substantial export opportunities.
"Oman is more than a market, so the doors that open are wide," Goyal stated during a press conference. The minister said, "It is a gateway to a wider access to the GCC countries, to East Africa, and to the Indian Ocean economy through its ports at Sohar, Duqum, and Salalah."
Oman's location can lessen India's reliance on the chokepoint in the middle of the Strait of Hormuz's disruption brought on by the ongoing conflict in West Asia. Because of supply chain delays, India's exports to GCC countries, which represent a 12% of the country's overall outbound shipments, declined by 35% in April.
"The West Asia crisis is not the only cause." Goyal highlighted, "I think Oman offers tremendous potential for onward shipments to other countries since Oman and India share such a great partnership and relationship over the years."
Oman offered duty-free access to 98% of tariff lines under the December trade deal, which covers 99% of India's export value to the Gulf nation.
India's exports to Oman could exceed $7 billion in in two years, compared to an early assessment of the Indian trade ministry.
"Exporters in a number of sectors, like textiles, sportswear, gem and jewelry, medical devices, pharmaceuticals, engineering, sports goods, agri-products, meat, leather, plastics, and marine products, will gain preferential access against our competitors in the Omani market," Goyal said.
China and Turkey, neither of whom there is a trade deal with the Gulf nation, have India's key competitors in the Omani market.
India's export profile can be expanded beyond trade related to petroleum because to Muscat's zero-duty access arrangements in other sectors. Since FY23, India's exports to Oman have largely remained around $4 billion, in energy products at present making open roughly one half of this amount.
Goyal stated that "As of this point, over ten shipments are being shipped (to Oman) with a preferential duty access."
According to him, Oman will approve Indian generic medications that have been approved by regulatory bodies such as the US Food and Drug Administration and the European Medicines Agency within ninety days.
The minister stated in an effort to help exporters make the most of the conditions of the trade agreement, the commerce department organized workshops all over India.
New Delhi has offered duty declines on about 78% of tariff lines for imports, but it has excluded sensitive domestic industries from tariff liberalization.
The trade deal with Oman might ease India's supply of liquefied petroleum gas and fertilizers, both of which are currently delayed by the conflict in West Asia.
Oman's advisor for foreign trade and international cooperation, Pankaj Khimji, who attended the online press conference, stated, "I am sure, if push comes to shove, Oman would be happy to consider an agreement to focus the fertiliser manufacturing (at Oman-India Fertiliser Company) towards the Indian requirement."
"We will be delighted to direct any small quantity of LPG that we generate toward you guys. Both parties must agree on the processes for price and purchasing. We are not against that, and I'm sure that can be resolved," Khimji said.
Under the terms of the free trade agreement, Muscat has provided Indian professionals with a better foundation for movement. Goyal stated, "For the first time ever, we have secured a binding commitment to protect Indian workers in the non-service segment, provided their units are majority Indian owned."
As part of the contract, Oman decided to increase the intra-corporate transferee quota from 20% to 50% and to extend a contractual service provider's permitted stay from existing 90 days to two years, with a further two-year extend.
After the free trade agreement with the United Arab Emirates, this is India's second trade agreement in the region. In the last three years, India has inked nine trade deals with 38 economies, and it is now discussing trade deals with multiple countries, including the US. Based on Goyal, Mexico and Ecuador also showed interest in doing trade in India.