Oman CEPA To Eliminate Tariffs For 98 pc Products, Which Face Avg 5 pc Duty
Oman has offered zero-duty access on 98 per cent of its tariff lines, covering 99.38 per cent of India’s exports to Oman. Out of the above, immediate tariff elimination is being offered on 97.96 per cent tariff lines
Chennai: Under the Comprehensive Economic Partnership Agreement signed with Oman, 98 per cent of Indian products will receive full tariff elimination immediately. However, the trade with the country may not see a jump with the CEPA as most of the products already have an average tariff of 5 per cent.
Oman has offered zero-duty access on 98 per cent of its tariff lines, covering 99.38 per cent of India’s exports to Oman. Out of the above, immediate tariff elimination is being offered on 97.96 per cent tariff lines.
In the export basket valued at $4 billion to Oman, mineral fuels, mineral oils, products of their distillation, bituminous substances and mineral waxes account for $1.57 billion of exports. Products like inorganic chemicals, articles of iron, electrical machinery and cereals have miniscule shares in the basket.
More than 80 per cent of Indian goods already enter Oman at an average tariff of around 5 per cent duties, finds GTRI. Hence, the CEPA may not increase the competitiveness of Indian products significantly.
According to the government, India is offering tariff liberalization on 77.79 per cent of its total tariff lines which covers 94.81 per cent of India’s imports from Oman by value. For the products of export interest to Oman and which are sensitive to India, the offer is mostly a tariff-rate quota (TRQ) based tariff liberalization. India’s imports from Oman are mostly crude oil, liquefied natural gas and fertilizers, along with chemical inputs such as methanol and ammonia.
Though the government assured that sensitive products, agricultural products, including dairy, tea, coffee, footwear, rubber, and tobacco products, Oman as it is not a major producer which can disrupt the market of these products in India.
Under the CEPA, Oman will extend substantial commitments across a broad spectrum of sectors including Computer Related Services, Business and Professional Services, Audio-visual Services, Research and Development, Education and Health Services. These commitments are expected to unlock significant new opportunities for Indian service providers, promote high-value job creation, and support expanding commercial engagement between the two countries, the government said.
It has enhanced mobility framework for Indian professionals. For the first time, Oman has offered wide-ranging commitments under Mode 4 – short-term stays of professionals. It also includes a notable increase in the quota for Intra-Corporate Transferees from 20 per cent to 50 per cent, the government said. Oman is already a destination for Indian professionals engaged in both blue collar and white collar jobs.
The CEPA further provides for 100 per cent Foreign Direct Investment by Indian companies in major services sectors in Oman through commercial presence, opening a wide avenue for India’s services industry to expand operations in the region. In addition, both sides have agreed to hold future discussions on social security coordination once Oman’s contributory social security system is implemented, reflecting a forward-looking approach to facilitating labour mobility and worker protection.
The agreement provides an opportunity for India’s AYUSH and wellness sectors to showcase its strength in the Gulf region. Several Indian ayurvedic wellness centres are operating in Oman and other parts of the Gulf region.
