In a move aimed at strengthening ties amidst escalating tensions in the Middle East, India and Oman are set to ink a significant trade agreement in the upcoming months, according to two senior Indian government officials.
The trade pact, which is poised to bolster India’s strategic presence in the region, holds immense strategic value for New Delhi as it provides access to vital trade routes in an area marked by volatility and geopolitical challenges.
With an annual trade volume of less than $13 billion between the two nations, the new deal is expected to amplify economic cooperation and facilitate smoother trade operations, particularly through Oman’s strategic location as a gateway to the crucial Strait of Hormuz – a crucial channel for global oil shipments.
As India navigates through a complex geopolitical landscape, marked by conflicts such as Israel’s confrontation with Hamas in Gaza and Yemen’s Houthi insurgency, the trade pact with Oman assumes heightened significance as a strategic manoeuvre to secure key trading partnerships in the region.
While awaiting the outcome of the national elections scheduled for June 4, which is widely anticipated to see Prime Minister Narendra Modi secure a third term, Indian officials have underscored the importance of the trade deal with Oman in light of evolving geopolitical dynamics.
In light of the stalled negotiations with the Gulf Cooperation Council (GCC), India’s pivot towards forging bilateral agreements with key GCC member states such as Oman and the United Arab Emirates underscores a strategic realignment in its trade policies, emphasising the increasing importance of bilateral engagements in navigating complex regional dynamics.
Notably, the planned trade agreement with Oman is expected to unlock opportunities for both nations, with Oman agreeing to eliminate duties on Indian exports worth $3 billion annually, spanning a range of sectors including agriculture, gems and jewellery, automotive, and healthcare equipment.
On the flip side, India has committed to reducing duties on select petrochemicals, aluminium, and copper imports from Oman, while also placing restrictions on the volume of such imports, in a bid to recalibrate trade dynamics between the two nations.
At the crossroads of geopolitical uncertainties and economic ambitions, the impending trade deal between India and Oman encapsulates a strategic partnership that could shape the regional economic landscape and lay the groundwork for enhanced cooperation in the face of mounting challenges in the Middle East.
