India mulls import duty concessions on some petroleum, plastic items in FTA with Oman: Source

Oman is India's third-largest export destination among the Gulf Cooperation Council (GCC) countries.

India is mulling import duty concessions on certain petroleum products and plastic items as part of the proposed Foreign Trade Agreement (FTA) with Oman, talks for which are likely to close by the end of January, 2024, an Indian official told Moneycontrol.

“India may offer some tariff cuts on certain petroleum products, as well as items such as plastics. These are some of the important items for which Oman would want concessions,” the official, who spoke on the condition of anonymity, said.

With talks on the India-Oman Comprehensive Economic Partnership Agreement (CEPA) largely concluded, authorities are expected to sign a deal before the general elections scheduled for April-May 2024, Moneycontrol had reported on December 29, 2023.

The first round of negotiations took place in New Delhi on November 27-29, 2023, while the second was held in Muscat on December 9-14, 2023.

According to a report by the Global Trade Research Institute (GTRI) on December 12, 2023, India's merchandise imports from Oman were $7.9 billion in 2022-23. Petroleum products ($4.6 billion) and urea ($1.2 billion) were the key purchases, accounting for 73 percent of total imports.

Other products include propylene and ethylene polymers ($383 million), pet coke ($265 million), gypsum ($115 million), and iron and steel ($62 million).

"These products will gain from FTA-led tariff elimination by India. Most are raw materials and India has opened most such imports from other FTA partner countries," the report said.

The report added that India can hope to radically increase its exports after the FTA since over 80 percent of its goods entering Oman attract import duties of 5 percent, on an average. Oman’s import duty ranges from 0 to 100 percent. Over 83.5 percent of India's merchandise exports, worth $3.7 billion, currently faces a 5 percent import duty in the West Asian nation.

“India will be able to increase the export of a variety of products to Oman following the FTA, since Oman’s import duties are not very high. It is, on an average, 5 percent. For some products, it is 10 percent,” the official said.

In 2022-23, India's merchandise exports to Oman were worth $4.5 billion, with New Delhi supplying 6.6 percent of the West Asian nation’s imports.