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 India, according to persons aware of the matter.
The two sides are in talks to negotiate a bilateral trade agreement which is expected to receive a push forward from the Sultan’s visit.
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 can hope to radically increase its exports post FTA as currently over 80% of its goods enter Oman at average 5% import duties, and there are not many trade barriers,” estimates the Global Trade Research initiative, in its report on an Oman-India trade agreement.
Indian exports of motor gasoline, textiles, electronics, machinery as well as iron and steel will benefit from duty elimination, the report said.
Queries mailed to the 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 argues.
Oman is keen to attract investments from India in the heavy manufacturing sector, said the persons cited above. For example, Larsen and 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 sources.
An agreement on investments is also expected, sources said. Bilateral trade has also 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 MoUs are expected to be signed during the visit.
Oman has long been seen as one of India’s closest partners in the Middle East. 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 R. Hari Kumar and National Security Adviser Ajit Doval also visited Duqm port this year.
Duqm has also become more important for India’s economic security and to secure 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, fellow at the Observer Research Foundation, a think-tank.
However, Taneja argues 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.