India-Oman Trade Pact Aims to Boost Exports in Labour-Intensive Sectors

The recently signed Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is expected to boost India's exports in various labour-intensive sectors to the Gulf nation. The Federation of Indian Export Organisations (FIEO) President, S C Ralhan, highlighted that this agreement will enhance India's export competitiveness in both goods and services.

International trade expert and Hi-Tech Gears Chairman, Deep Kapuria, noted that after a challenging year in international trade, India is ending on a positive note with this deal. This agreement follows a similar pact with the UAE in May 2022. Kapuria emphasised that the reduction in tariffs will help India diversify its exports to new markets and is crucial for India's energy security.

Strategic Location and Market Diversification

Oman's strategic position serves as a gateway to the Gulf and Africa. This makes it an essential partner for India, allowing exporters to integrate more effectively into regional value chains and diversify their markets. The CEPA is expected to provide near-universal duty-free access, significantly boosting the competitiveness of Indian goods.

Anish Shah, Group CEO and MD of Mahindra Group, mentioned that the agreement enables Tech Mahindra to expand its collaboration in digital transformation, clean energy, supply chains, and mobility. Tech Mahindra already has a technology development centre in Muscat, which will benefit from this enhanced cooperation.

Impact on Key Sectors

The Confederation of Indian Industry (CII) stated that the CEPA with Oman improves market access and trade facilitation. It creates a supportive framework for services, investment, technology collaboration, and professional mobility. This agreement is expected to benefit key sectors such as textiles, apparel, leather, and footwear.

The Gem and Jewellery Export Promotion Council (GJEPC) reported that India's exports from this sector to Oman were valued at USD 35 million in 2024. With duty-free access under the CEPA, exports could rise to USD 150 million over the next three years. This growth will be driven by improved price competitiveness and expanded product offerings.

Growth Opportunities for Indian Exporters

The zero-duty access provided by the CEPA will greatly enhance competitiveness for Indian exporters. It encourages direct sourcing and presents strong growth opportunities for polished diamonds and gold jewellery. Additionally, there is emerging demand for silver, platinum, and imitation jewellery in Oman.

This trade pact marks a significant step forward for India in strengthening its economic ties with Oman. By facilitating better market access and reducing tariffs, it opens up new avenues for Indian industries to expand their presence in the region.

With inputs from PTI