According to two Indian government officials, India and Oman will ink a trade agreement in the upcoming months as New Delhi looks to deepen its connections in the Middle East, where escalating hostilities are endangering important shipping lanes.
One official told Reuters, “It will help India with a strategic partner and access to key trade routes in a volatile region.”
Although trade between India and Oman is not very large—less than $13 billion—the relationship is significant for New Delhi because the Gulf country serves as a gateway to the narrow Strait of Hormuz, which separates Oman and Iran and is a major transit point for oil shipments worldwide.
Houthi militants from Yemen, who are aligned with Iran, have launched numerous drone and missile strikes in the Red Sea region, claiming solidarity with the Palestinians in Gaza. Israel’s war against Hamas in Gaza has also resulted in hostilities with Iran.
The government that emerges victorious in India’s ongoing national elections—the results of which are scheduled for announcement on June 4—must approve the trade agreement, according to the officials. Most people predict that Prime Minister Narendra Modi will be elected to a rare third term.
The officials requested anonymity because the conversations are confidential.
Emails requesting comment were not answered by the foreign and trade ministries of India, the foreign ministry, or the embassy of Oman in India.
With little progress being made on a deal with the Gulf Cooperation Council (GCC), India has shifted its focus to pursuing bilateral agreements with GCC members like the United Arab Emirates and Oman.
According to the official, the planned agreement with Oman “also gives a competitive edge as GCC is negotiating trade agreements with Pakistan and China.”
According to the officials, Oman has decided to remove duties on $3 billion worth of Indian exports, which include textiles, agricultural products, vehicles, medical devices, jewelry, leather goods, and engineering products.
According to the officials, India has decided to lower tariffs on a few Oman-sourced petrochemicals, aluminum, and copper in exchange for limiting imports of those products.
