India and Oman Sign CEPA to Boost Trade and Opportunities for Professionals
On December 18, in the presence of Prime Minister Narendra Modi, India and Oman signed the Comprehensive Economic Partnership Agreement (CEPA). With the implementation of CEPA, 99% of the items exported to Oman will be free from tariffs, which previously ranged from 5% to more. The agreement is expected to be operational within the next three months, and in the first two years, Indian exports to Oman may see an increase of $2 billion.
In the fiscal year 2024-25, trade between India and Oman reached $10.61 billion, with India exporting goods worth $4.6 billion and importing $6.5 billion worth of natural gas and petrochemical items, which has resulted in a trade deficit. Under CEPA, India has given tariff relief on petrochemical products, polypropylene, propylene, marble, incense, and dates, making these items cheaper in India.
Restricted Imports from Oman
However, India has not opened the door for imports from Oman in agricultural, dairy, tea, coffee, rubber, gold and silver, jewelry, and textile sectors. A quota has also been set for the import of dates.
The agreement will particularly boost exports of agricultural and processed food items, engineering goods, leather products, textiles, gems and jewelry, chemicals, and plastics, which are labor-intensive sectors. This will greatly benefit Indian farmers and the MSME (Micro, Small, and Medium Enterprises) sector, as MSMEs contribute to over 40% of these exports.
New Opportunities for Professionals and Service Sectors
The CEPA also provides easier access for professionals and the service sector, allowing India to benefit in these areas. For the first time, a trade agreement has opened the door for Ayurvedic treatments and medicines in Oman, offering an opportunity for the expansion of Ayurveda and natural healing therapies.
The increased opportunities for professionals will also help India earn foreign currency from Oman. Currently, around 700,000 Indians live in Oman, sending $2 billion annually back to India. Oman imports around $38-40 billion worth of goods annually, and with zero tariffs, India will now have a significant opportunity to increase its exports.
Oman's Agricultural Imports and India's Potential
Oman imports around $6 billion worth of agricultural products annually, but India's share in this market is only 10%. With the removal of tariffs on fruits, vegetables, processed items, meat, tea, coffee, grains, seafood, dairy products, and more, India is expected to see a boost in exports. Some of the agricultural items that will benefit from the removal of tariffs include butter, cheese, ghee, yogurt, rice, wheat, maize, millet, cashew nuts, bananas, apples, mangoes, oranges, pomegranates, tomatoes, onions, garlic, cabbage, okra, pumpkin, potatoes, soybeans, and other edible oils, honey, and more.