FTA, investments and education on table during Oman ruler’s India visit

A traditional souk in Oman. Photo: Alamy (Alamy)
A traditional souk in Oman. Photo: Alamy (Alamy)

Summary

This will be the Omani ruler’s first state visit to India since he ascended to the throne in 2020. It will also be the first visit by an Omani ruler to India since 1997.

India and Oman are set to discuss the proposed bilateral free trade agreement (FTA), investment opportunities and cooperation in the education sector during Sultan Haitham Bin Tarik’s state visit to New Delhi, according to persons aware of the matter.

The Omani ruler began his three-day state visit to India on Friday.

The two sides are in talks for a comprehensive economic partnership agreement, which is expected to vastly reduce or eliminate customs duties on most goods traded between them and which will likely receive a push from the sultan’s visit.

This is Sultan Haitham Bin Tarik’s first state visit to India since he ascended the throne in 2020. It is also the first visit by an Omani ruler to India since 1997. 

“India can hope to radically increase its exports post FTA, as currently over 80% of its goods enter Oman at an average 5% import duties, and there are not many trade barriers," a report by think tank Global Trade Research Initiative said.

Indian exports such as motor gasoline, textiles, electronics, machinery as well as iron and steel will benefit from duty elimination, the report said. 

Queries emailed to India’s  ministry of external affairs and Oman’s foreign ministry went unanswered.

“Oman’s higher per capita income ($25,060, compared to India’s $2,370) could mean a demand for more diversified and possibly higher value goods and services in Oman, which India could aim to supply," the GTRI report said.

Oman is keen on investments from India in the heavy manufacturing sector, said the persons cited above. For example, Larsen & Toubro has a heavy engineering manufacturing facility at Sohar in Oman.

There are over 6,000 India-Oman joint ventures in Oman, with an estimated investment of over $7.5 billion, according to official data.

An agreement on investments is also expected, the people cited above said. Bilateral trade between the two countries has more than doubled, from $5.4 billion in 2020-21 to $12.3 billion in 2022-23, they added.

The two sides are also expected to discuss measures to strengthen the partnership on education. This may include a move to create an exchange and scholarship programme to have more Indian students study in Oman and vice versa. According to the persons cited above, an agreement and a slew of memorandums of understanding are expected to be signed during the visit.

Oman has long been seen as one of India’s closest partners in the West Asia. The two sides have shared a close defence relationship, with all three defence services conducting military exercises with their Omani counterparts. In 2018, Indian naval vessels gained access to the strategically valuable Duqm port, which allowed India to expand its maritime defence network in the Western Indian Ocean. India’s navy chief Admiral R. Hari Kumar and national security adviser Ajit Doval also visited the port this year.

Duqm has also become more important for India’s economic security and to safeguard Indian vessels.

“We are going to be importing oil and gas from West Asia for the next three decades and we have to secure these imports. In the military, there is a sense that we have to be capable of securing our own trade routes. We can’t be dependent on others to bail us out in case something happens," says Kabir Taneja, a fellow at the Observer Research Foundation, a think tank.

However, Taneja argued that India is not eyeing Duqm as a staging ground for kinetic operations. Instead, the focus will be on developing the port as a refuelling and repair station.

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