Looking to expand market access, India inks free trade pact with Oman, Pg1

Key Highlights:

• India and Oman signed a Free Trade Agreement (FTA) on Thursday, marking India's second trade deal with a Gulf Cooperation Council (GCC) country after the UAE.
• The agreement aims to expand market access for Indian exporters in West Asia, especially for labour-intensive sectors.
• Oman has offered zero-duty access on 98% of its tariff lines, potentially leading to $2 billion in exports in the near term.
• The Comprehensive Economic Partnership Agreement (CEPA) is expected to boost trade, investment, and employment opportunities.

Detailed Insights:

• The FTA is part of India's strategy to secure new markets amid trade restrictions in the US and the EU, and uncertainty around a trade deal with the US.
• Indian exporters are seeking better market access in the Arab region due to less stringent standards compared to the EU, reducing compliance costs and non-tariff barriers.
• Oman's strategic location can serve as a hub for Indian products to reach other markets in the region and Africa.
• Oman has an existing FTA with the US since 2009, allowing a wide range of products from Oman to enter the US duty-free.
• Indian exports to Oman have doubled in the last five years, with key exports including machinery, aircraft, rice, iron and steel, and beauty products.
• The CEPA includes an enhanced mobility framework for Indian professionals, increasing the quota for Intra-Corporate Transferees and extending the duration of stay for Contractual Service Suppliers.
• Oman's global services imports amount to $12.52 billion, with India having a 5.31% share; Oman has made commitments across sectors like computer, business, audio-visual, R&D, education, and health services.

Key Concepts Involved:

• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate trade barriers such as tariffs and quotas.
• Gulf Cooperation Council (GCC): A political and economic alliance of six Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
• Tariff Lines: Specific product categories within a tariff schedule, each with its own duty rate.
• Non-Tariff Barriers (NTB): Trade barriers that restrict imports or exports through mechanisms other than tariffs, such as quotas, regulations, or standards.