Amid ongoing negotiations for a Comprehensive Economic Partnership Agreement (CEPA) between India and Oman, the textile sector is poised for potential growth, according to sources familiar with the discussions. Commerce and Industry Minister Piyush Goyal’s visit to Muscat next week for the India-Oman Joint Commission Meeting (JCM) is expected to address outstanding issues related to market access, including potential benefits for textile exporters.
While negotiations for the CEPA, aimed at significantly reducing or eliminating customs duties and easing trade norms, have largely concluded, Oman has reportedly sought revisions to market access offers on specific product categories. Though details remain confidential, industry analysts suggest textiles could be among the sectors under review.
India is keen to leverage the CEPA to boost exports to Oman, currently its third-largest export destination within the Gulf Cooperation Council (GCC). While overall bilateral trade has seen a recent dip, falling from $12.39 billion in 2022-23 to $8.94 billion in 2023-24, the potential for growth in specific sectors like textiles remains significant.
The Global Trade Research Institute (GTRI) has highlighted the potential for Indian goods, including textiles and apparel, to gain a competitive edge in the Omani market if import duties are reduced under the CEPA. Currently, these goods face a 5% import duty in Oman. With Oman’s import duties ranging from 0 to 100%, any reduction secured through the CEPA would significantly improve the price competitiveness of Indian textiles.
Oman’s higher per capita income compared to India suggests a demand for diversified and potentially higher-value textile products, an area where Indian manufacturers are increasingly competitive. This presents an opportunity for Indian textile exporters to tap into a growing market.
The upcoming JCM, commencing on January 27th, will be crucial in addressing these outstanding issues and potentially finalizing the CEPA. The outcome of these discussions will have significant implications for the future of bilateral trade, with the textile sector potentially being a key beneficiary. The existing trade agreement India has with the UAE, another GCC member, serves as a model for the potential benefits of such partnerships.
