Negotiations for a Free Trade Agreement (FTA) between India and Oman are nearing completion, with the biggest remaining hurdle being the degree of “Omanisation” implemented by the Middle Eastern country, according to government sources.Oman’s “Omanisation” policy aims to replace foreign workers with locals across sectors, with the required percentage of local hires varying by sector.
Government sources told CNBC-TV18 that India is seeking guarantees on opportunities and access for its workers in Oman. It also wants the degree of “Omanisation” across sectors to be frozen in the FTA to protect the long-term interests of Indian workers. In the fifth round of talks held in January, Oman had sought a revision of market access for certain products even after the FTA negotiations had concluded.
While India hadn’t sought any duty concessions in 125 to 130 tariff lines, which include products like liquor and cigarettes, it is expected to gain greater market access for its services sector and for 98% of its goods in Oman. Sources had indicated that both countries have discussed the flagged issues, and changes in the negotiated positions were likely to be minimal.Meanwhile, the Indian industry had opposed duty concessions for Oman’s petrochemical products to avoid a glut of low-cost imports which may potentially impact India’s domestic industry. Sources had explained that pricing of feedstock constitutes 65% to 70% of the total cost of petrochemical products like Polyethylene (PE), Polyethylene Terephthalate (PET), Polypropylene (PP) and Polyvinyl Chloride (PVC). Due to its surplus mineral wealth and availability of petrochemical products, Oman enjoys a natural advantage in terms of competitiveness of such products vis-à-vis India.Bilateral trade between India and Oman had declined from $12.39 billion in FY 2022-23 to $8.94 billion in FY 2023-24. India’s merchandise imports from Oman had dropped to $4.52 billion in FY 2023-24, from $7.9 billion in FY 2022-23. While petroleum products and urea comprise 70% of India’s imports from Oman, other products include ethylene and propylene polymers, pet coke, chemicals, gypsum, and iron and steel. India’s exports to Oman had risen from $2.25 billion in FY 2018-19 to $4.42 billion in FY 2023-24.Oman is the 3rd largest export destination among the GCC (Gulf Cooperation Council) countries for Indian goods & services, with 80% of Indian products currently attracting 5% import duty in Oman. If signed, an FTA with Oman would the 2nd such agreement India has with a GCC country, after its trade deal with the UAE came into effect in May 2022.(Edited by : Akanksha Upadhyay)
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