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India and Oman close to finalizing landmark trade agreement, sign tax protocol

New Delhi: The India-Oman Comprehensive Economic Partnership Agreement (CEPA) is nearing finalization following high-level talks between Union commerce minister Piyush Goyal and his Omani counterpart, Qais bin Mohammed Al Yousef, the commerce ministry said.

Goyal’s two-day visit to Oman, which concluded on Tuesday, helped advance bilateral trade and investment discussions, according to a statement from the ministry.

The talks primarily focused on the CEPA, which both ministers described as a “transformative agreement” that would create new opportunities for businesses in both countries.

Expressing optimism about concluding the deal soon, the leaders highlighted its potential to strengthen economic cooperation across sectors such as energy, infrastructure, and technology, the ministry stated.

Also read | India-Oman free trade deal likely to be signed soon, say officials

In a parallel development, India and Oman signed a protocol to amend their Double Taxation Avoidance Agreement (DTAA), aligning it with global standards and simplifying regulations. This measure is expected to reduce trade barriers and foster greater economic collaboration.

The growing partnership with Oman holds strategic importance for India, given Oman’s location as a gateway to Gulf Cooperation Council (GCC) markets.

With trade between the two nations already substantial, the CEPA is expected to enhance market access for Indian businesses in Oman while encouraging Omani investments in India. The updated DTAA further bolsters the economic framework, creating a business-friendly environment and reducing compliance burdens.

Also read | India, Asean trade agreement review faces delays

Concerns raised

However, some concerns have previously been raised regarding potential misuse of the trade pact. India has previously expressed apprehension that China could exploit Oman to dump goods into the Indian market. 

Negotiations on the CEPA, which were nearly concluded in March, hit a roadblock due to Oman’s request for revisions to India’s market access offer for certain products.

Oman is India’s third-largest export destination among GCC countries, but over 80% of Indian exports to Oman currently face an average 5% import duty.

Also read | The India-EFTA trade deal: A win-win

In 2023-24, India’s exports to Oman stood at $4.47 billion, while imports amounted to $4.5 billion. Petroleum products and urea account for over 70% of India’s imports from Oman. Other key imports include propylene and ethylene polymers, pet coke, gypsum, chemicals, and iron and steel.

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