India to implement Oman trade agreement from first quarter of next financial year, aims to increase exports by 50% in 3 years

India and Oman are set to start implementing the trade arrangements agreed under the Comprehensive Economic Partnership Agreement (CEPA) signed on Thursday, December 18, from the first quarter of the next financial year. It is expected that both the countries will complete the procedural formalities by then.

According to sources, with this, India is aiming to increase goods exports to Oman by 50% in the next three years. The target is to increase the investment from the current $4.06 billion to over $6 billion and the medium term target is $10 billion.

To protect domestic agriculture and manufacturing, India has placed 2,789 tariff lines on the exclusion list. At Oman’s request, products such as alcohol, tobacco, bananas and pork have also been excluded from the agreement due to social sensitivity.

Taking a lesson from India’s first free trade agreement with the UAE, India has excluded gold and silver bullion, petroleum products and non-ferrous metals from the India-Oman CEPA, government sources said. The agreement is expected to serve as a template for India’s future free trade negotiations with the Gulf Cooperation Council (GCC).

Under the agreement, increased market access for Omani exports is expected to make downstream petrochemicals, dates, decorative marble and frankincense cheaper in the Indian market.

Read also, PM Modi, Sultan Tariq sign India-Oman FTA in Muscat

Government sources also said that Oman’s “Omanisation” policy would not be changed in a way that would adversely impact Indian workers. CEPA provides equal employment opportunities for workers from SAARC countries.

Omanization, which aims to increase local appointments in various sectors, is revised from time to time, including changes in sector-wise localization targets.

On trade facilitation, sources said the agreement includes regulatory fast-tracking for pharmaceutical exports. India sees scope to expand its export share in Oman’s import basket, especially in agriculture, where India currently holds a 10.24% share, and textiles, where it has a 22% share. Oman’s geographical proximity to India and availability of land have also been identified as opportunities for co-location of Indian industries and workforce.