In Shorts
- India’s new trade pact with Oman excludes dairy, key farm goods and gold from duty cuts.
- The Comprehensive Economic Partnership Agreement expands market access while protecting local interests.
- The deal increases tariff-free exports overall but maintains safeguards for sensitive sectors.
India has taken a protective stance on its domestic economy in the recently concluded trade agreement with Oman by excluding several sensitive products from tariff concessions. The Comprehensive Economic Partnership Agreement was signed in Muscat during Prime Minister Narendra Modi’s visit, reflecting New Delhi’s dual focus on expanding international trade and safeguarding vulnerable domestic sectors.
Under the terms of the pact, New Delhi will not extend duty cuts on critical items that could face intense foreign competition. This includes dairy products, certain agricultural goods like tea and coffee, precious metals including gold and silver, and labour-intensive segments such as footwear and sports equipment. The commerce ministry affirmed that keeping these products outside tariff reductions is intended to protect farmers and small and medium enterprises from sudden market disruptions.
Despite these exclusions, the overall agreement opens up significant opportunities for bilateral trade expansion. Oman has agreed to eliminate tariffs on a vast majority of its tariff lines, creating zero-duty access for most Indian exports. This move is expected to benefit sectors such as textiles, engineering goods, petroleum products, and processed foods, boosting India’s export footprint in the Gulf region.
While sensitive items remain shielded, some products of export interest to Oman may still benefit through tariff-rate quotas, offering limited duty concessions up to specified quantities. For example, quota mechanisms apply for commodities like dates and marble blocks, which have strategic importance in bilateral commerce.
Trade data shows that bilateral commerce between India and Oman has grown steadily in recent years, with total trade crossing double-digit figures. Indian imports from Oman are dominated by mineral fuels and fertilisers, while exports span petroleum products, engineering goods, and various manufactured items. The new agreement is seen as a significant step toward strengthening economic ties and creating a more balanced trade environment.
By carving out sensitive sectors from broad tariff liberalisation, India aims to strike a careful balance between embracing global market access and defending the interests of domestic producers who could face heightened competition under unrestricted duty cuts. The pact marks a strategic evolution in India’s approach to trade negotiations in the Gulf region, aligning economic growth with pragmatic industrial protection.
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