Certainty of tariffs and liberal mobility commitments have made Oman an attractive base for Indian companies to address world markets in sectors that require large amounts of energy like green steel, green hydrogen and ammonia, commerce and industry minister Piyush Goyal said Friday.
“Logically companies who require natural resources would be setting up bases in Oman. Already in green steel a large capacity is being set up by an Indian company,” he said at a press conference on the signing of India-Oman Comprehensive Economic Partnership Agreement (CEPA). The agreement will be operationalised in the next three months.
“These investments will provide Indians an opportunity and jobs for our Indian people. There is also a huge amount of potential for locating in Oman the processing of their large volumes of marble. There is a huge amount of investment interest in the education and health care sector,” the minister said.
Easing Professional Mobility
In the mobility part of the agreement, Indian companies will be allowed to have 50% of its staff in Oman from India up from 20% now as part of Intra Corporate Transfer (ICT). This will enable Indian companies to deploy a larger share of managerial, executive and specialist staff in their operations in Oman. Personnel on ICT can now stay in Oman for up to four years from 90 days at present.
These mobility provisions are critical for the 6000 Indian-Oman joint ventures improving staffing flexibility, service delivery and access to regional contracts. Oman has also invited Indian companies to invest in their Special Economic Zones and Free Trade Zones.
“We have provided that only Indians can be engaged by our Indian investors to promote a larger amount of jobs for our Indians. I believe some people are also looking at setting up battery manufacturing from India in Oman,” Goyal added.
Strategic Market Access
Amity University has a large number of education facilities in Oman. Apollo Hospital has a large number of health facilities, all of which have huge potential for growth. Already a dairy from Oman has expressed an interest in a joint venture with Amul, Goyal said.
Oman is just 2 hours away from India and trade is best done when it is near shore, commerce secretary Rajesh Agrawal said..
“And if you have tariff predictability and a trusted partner, a friend country, then it adds up to the entire value. WIth tariff predictability on 98% of the tariff lines India has secured its business interests,” he said.
He said that the services sector will be another major gainer of the agreement as India is a big exporter of services. While Oman may be a smaller market for goods, its services exports are at $ 13 billion. Of the total imports of services by Oman, India’s share is 5.31% or $ 665 million.
Oman has opened up 100% FDI for India in most of the services sector and undertaken broad and deep market access commitments across 127 sub-sectors of services..
Another area of high potential is electronics with Oman;s yearly imports at $ 3 billion of which India’s share is $ 123 million . “Electronics is now going to be the second largest export from India, hopefully by the end of this year. If we are able to produce more and more electronics, Oman will definitely become important.”.
India buys a lot of petrochemical products, energy products from Oman and that will continue. “In the downstream industry of petrochemicals, we have given them market access, because that is also their strength. We have protected our sensitivities through right quota sizes, so that we give them market access, but don’t open it up in a manner that our industry is affected. So I think this has been a good balance of, I think, trade-off on both sides.”