India and Oman Forge Strategic Trade Pact Amid Middle East Tensions

India and Oman are poised to strengthen their ties with a new trade agreement, aiming to bolster economic cooperation and strategic partnership. The impending deal, set to be signed in the coming months, marks a significant move for India to expand its presence in the Middle East amid escalating tensions in the region.

With annual trade currently standing at less than $13 billion, the agreement holds the potential to enhance bilateral trade and investment between the two nations. Of particular importance to India is Oman’s strategic position as a gateway to the vital Strait of Hormuz, a crucial transit point for global oil shipments.

The timing of the agreement coincides with India’s ongoing national elections, with the government expected to be in place by June 4th. Prime Minister Narendra Modi, widely anticipated to secure a third term, is likely to play a pivotal role in advancing this trade deal, according to sources cited by Reuters.

In light of challenges in reaching a comprehensive deal with the Gulf Cooperation Council (GCC), India has shifted its focus towards bilateral agreements with individual GCC member states like Oman and the United Arab Emirates. This move is seen as an effort to gain a competitive advantage, particularly as the GCC engages in negotiations with other countries like Pakistan and China.

Under the proposed agreement, Oman has committed to eliminating duties on Indian exports totaling an annual $3 billion, covering various sectors including agriculture, gems and jewelry, automotive, medical devices, engineering, and textiles. In return, India has agreed to reduce duties on select petrochemicals, aluminum, and copper from Oman, while also imposing limits on imports of such goods.

The deal signals a mutual commitment to fostering economic cooperation and strengthening ties between India and Oman, with potential implications for regional stability and trade dynamics in the Middle East, Reuters reported.