India and Oman are signing the trade deal to strengthen ties and facilitate trade amidst rising tensions in the Middle East. The deal is most likely to be signed after the results of Lok Sabha Elections 2024.
Traditional Omani boats known as dhows are seen sailing towards the Strait of Hormuz, off the coast of Musandam province, Oman. (Picture credit: Reuters)
New Delhi: India and Oman are gearing up to seal a trade deal in the coming months, most likely after the Lok Sabha Elections 2024. This development comes as India aims to strengthen its connections in the Middle East, where escalating tensions are jeopardising crucial shipping routes.
According to an official of the Indian government, the agreement would provide India with a valuable strategic partner and facilitate access to vital trade routes within the volatile region.
All you need to know about trade deal
Despite the current annual trade volume between India and Oman being less than $13 billion, the alliance holds significant importance for New Delhi due to Oman’s strategic position as the gateway to the narrow Strait of Hormuz, a key transit point for global oil shipments situated between Oman and Iran.
The trade deal, which awaits the approval of the winning government in India’s Lok Sabha elections, is expected to be finalised post the announcement of election results on June 4.
The officials revealed that the trade deal focuses on eliminating duties on specific Indian exports valued at $3 billion annually. These exports include agricultural products, gems and jewellery, leather goods, automobiles, medical devices, engineering products, and textiles. In return, India has agreed to reduce duties on certain petrochemicals, aluminium, and copper imported from Oman while also capping imports of these goods, as reported by Reuters.
In light of India’s limited progress on a trade agreement with the Gulf Cooperation Council (GCC), the nation has shifted its focus to pursuing bilateral deals with individual GCC member countries like Oman and the United Arab Emirates.
Why are India and Oman set to sign a trade deal?
India and Oman are signing the trade deal to strengthen ties and facilitate trade amidst rising tensions in the Middle East.
How will the deal benefit India?
The deal provides India with a strategic partner and improved access to crucial trade routes in the region.
What major event in India’s political calendar is influencing the timing of the trade deal?
The Lok Sabha Elections in India, with results expected on June 4, influence the timing of the trade deal.
What goods will Oman eliminate duties under the trade deal?
Oman will eliminate duties on Indian exports worth $3 billion annually, including agricultural products, gems and jewellery, leather goods, automobiles, medical devices, engineering products, and textiles.
How does the planned agreement with Oman align with India’s broader trade strategy in the Gulf region?
The agreement with Oman aligns with India’s strategy of pursuing bilateral trade deals with GCC member nations, aiming to maintain a competitive edge as the GCC negotiates trade agreements with Pakistan and China.
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