Possible Expansion of Job Opportunities as India and Oman Finalize Free Trade Agreement
India-Oman CEPA Negotiations Near Finalization with Emphasis on Employment Protections Amid Omanization Policy
The discussions surrounding the India-Oman Comprehensive Economic Partnership Agreement (CEPA) have advanced to their concluding stages. Both nations are currently focused on addressing key remaining stipulations from India, particularly around safeguards related to the frequently changing Omanization policy, as noted by a senior government official. This policy requires businesses in Oman to hire a designated proportion of local workers, which varies by industry and job position and is subject to regular updates. Companies that fulfill these hiring thresholds receive preferential government treatment, while those that fail to comply face various penalties, including fines, restrictions on new visa applications for expatriates, and even the revocation of existing work permits.
India’s Call for Stability in Hiring Quotas
India is advocating for the current Omanization targets to be maintained for Indian enterprises and for this stipulation to be explicitly included in the FTA. The agreement, titled the Comprehensive Economic Partnership Agreement (CEPA), encompasses areas beyond mere trade. Clarification on the employment aspect will enable India to more effectively leverage the provisions related to professional mobility under the CEPA, while safeguarding against the potential for future restrictions on job reservations for Omani workers, the official commented.
Progress and Scope of CEPA Negotiations
Initiated in November 2023, negotiations regarding the CEPA with Oman were finalized by March 2024. Although the signing was anticipated to occur before the general elections in 2024, discussions lingered due to the emergence of additional issues. Notably, the CEPA with Oman offers broader scope and liberalization compared to the agreement with the UAE. Under this agreement, India will gain access to 98% of its products in the Omani market while also securing substantial access in service sectors.
Import Duties and Sector Dynamics
Oman’s import tariffs can range from zero to 100%, with particular duties applied to specific products, including meats, wines, and tobacco, which are subject to the highest duty rates. To expedite discussions surrounding the trade deal, India’s Commerce and Industry Minister, Piyush Goyal, visited Muscat in the last week of January. During his trip, he participated in the inaugural session of the India-Oman Joint Commission Meeting (JCM) and met with senior Omani officials. Additionally, both countries signed a protocol to amend the Double Taxation Avoidance Agreement (DTAA) during this visit.
Trade Volume and Key Sectors
Among the Gulf Cooperation Council (GCC) countries, Oman stands as the third-largest export destination for India. In the fiscal year 2024-25, Indian exports to Oman amounted to approximately $443 billion, while imports surpassed $6.51 billion. Major exports from India to Oman include petroleum products, engineering goods, minerals, and chemicals. Conversely, India’s primary imports from Oman consist of petroleum, fertilizers, chemicals, and plastics.
