Giving a new dimension to India’s economic partnership with the Gulf countries, the Comprehensive Economic Partnership Agreement (India-Oman CEPA) was signed between India and Oman on Thursday. This deal is not limited to just business figures, but it is going to open huge opportunities for Indian exporters, service sector, startups and even AYUSH and Ayurveda industry. The special thing is that under this agreement, Oman will give India duty-free access on more than 98% of its tariff lines, due to which Indian goods will now become cheaper there.
This historic agreement was signed in Muscat between Union Commerce Minister Piyush Goyal and Oman’s Commerce Minister Qais bin Mohammed Al Yusuf in the presence of Prime Minister Narendra Modi and Sultan Haitham bin Tariq of Oman. Under the deal, Oman will provide tariff free access to 99.38% of goods exported by India. In return, India has also offered duty relief on 77.79% of its tariff lines, which will benefit about 95% of the goods coming from Oman.
What benefit does India get from this deal?
India’s service sector is going to get the biggest benefit of this trade deal. The agreement includes provisions like professional services, IT, healthcare, education and ease of movement of workers. Apart from this, Indian companies will be able to do 100% FDI in many service sectors through commercial presence in Oman. It will also become a strong entry gateway for India to reach the Gulf Cooperation Council (GCC), Africa, Central Asia and Eastern Europe.
Which sector will get benefit?
According to government information, this deal will provide complete tariff free benefits to labour-intensive sectors like gems and jewellery, textiles, leather, footwear, sporting goods, plastics, furniture, engineering goods, pharma, medical devices and automobiles. At the same time, India has kept agricultural products like dairy, tea, coffee and tobacco out of this agreement.
AYUSH and Ayurvedic medicines
A major feature of this agreement is that it will open a new and big market in Oman for India’s AYUSH and Ayurvedic products. Currently, Oman buys services worth about $12.5 billion from around the world, in which India’s share is about 5%. After this deal, India’s participation is expected to increase further. The total trade between India and Oman in the financial year 2024-25 was $ 10.61 billion, of which petroleum, fertilizer and mineral products accounted for the largest share. Now with this new trade agreement, trade between the two countries will not be limited to oil only, but there is a possibility of growth in many new sectors as well.
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