India-Oman FTA to open doors for textiles and autos: Piyush Goyal

India's strategic engagement with the Middle East, particularly the Gulf Cooperation Council (GCC) nations, has been a cornerstone of its foreign policy, driven by energy security, trade, and diaspora interests. The impending Free Trade Agreement (FTA) between India and Oman signifies a crucial deepening of this relationship, building upon centuries of historical ties and robust contemporary cooperation. This move is not an isolated event but part of India's broader 'Look West' policy, which seeks to enhance economic and strategic partnerships across West Asia and North Africa.

Historically, India and Oman share a vibrant past, with maritime trade routes connecting their coasts dating back millennia. This cultural and commercial exchange laid the foundation for modern diplomatic relations, formally established in 1955. Oman, strategically located at the mouth of the Strait of Hormuz, is a vital partner for India's maritime security and economic interests in the Western Indian Ocean. Over the decades, India has become one of Oman's largest trading partners, and the large Indian diaspora in Oman (estimated over 600,000) further strengthens bilateral bonds through remittances and cultural exchange. Existing trade, while significant, has largely been driven by traditional goods. The FTA aims to diversify and expand this basket.

An FTA essentially aims to eliminate or significantly reduce tariffs and non-tariff barriers on goods and services traded between the signatory countries, thereby facilitating smoother and more competitive trade. In this context, the key stakeholders are numerous. On the Indian side, the Ministry of Commerce and Industry is the primary negotiator, representing the interests of various Indian industries. Indian businesses, especially in sectors like textiles, food processing, pharmaceuticals, automotive components, and renewable energy, stand to gain significant market access. Consumers in both countries could benefit from a wider range of goods at potentially lower prices. On the Omani side, the Omani government, particularly its Ministry of Commerce, views this FTA as crucial for its 'Vision 2040' economic diversification plan, which aims to reduce reliance on hydrocarbons. Omani businesses will gain enhanced access to the vast Indian market and attract Indian investment, particularly in manufacturing and technology, helping to create jobs and foster non-oil sectors.

For India, this FTA holds immense significance. Economically, it promises to substantially boost bilateral trade, which stood at approximately US$12.38 billion in FY 2022-23. By reducing duties, Indian exports, particularly value-added products like textiles, processed foods, and engineering goods, will become more competitive in the Omani market. Furthermore, Oman's strategic location positions it as a 'gateway' to other Gulf and African markets, offering Indian businesses a potential hub for re-exports and regional supply chain integration. The agreement is also expected to attract greater Indian investment into Oman, fostering joint ventures and technology transfers, especially in emerging sectors like green hydrogen and solar energy, aligning with India's own renewable energy goals. This aligns with India's 'Make in India' initiative by providing new markets for domestically manufactured goods.

Strategically, strengthening ties with Oman is vital for India's maritime security interests. Oman is a critical partner in counter-terrorism efforts and maritime domain awareness in the Indian Ocean region. Enhanced economic cooperation naturally translates into stronger geopolitical alignment, contributing to regional stability. This FTA also diversifies India's trade partnerships, reducing over-reliance on a few markets and enhancing resilience against global economic fluctuations. It reinforces India's commitment to multilateralism and its role as a responsible global economic player.

From a constitutional perspective, international agreements like FTAs are primarily governed by **Article 253** of the Indian Constitution, which empowers Parliament to make laws for implementing any international treaty, agreement, or convention. This ensures that the terms of the FTA, once signed, can be legally enforced within India. Broader foreign policy objectives are guided by **Article 51**, which directs the State to endeavor to promote international peace and security, maintain just and honorable relations between nations, and foster respect for international law and treaty obligations. The **Foreign Trade (Development and Regulation) Act, 1992**, provides the legal framework for the government to formulate and implement India's foreign trade policy, under which such FTAs are negotiated and operationalized.

Looking ahead, the India-Oman FTA is expected to be a catalyst for sustained economic growth and diversification for both nations. It sets a precedent for deeper engagement with other GCC countries and reinforces India's 'Act West' policy. The success of this FTA could pave the way for more comprehensive economic partnership agreements and increased cooperation in areas like infrastructure development, digital transformation, and cultural exchange. It signifies India's growing economic heft and its proactive approach to forging strategic partnerships in a rapidly evolving global economic landscape, ensuring its energy, economic, and security interests are well-protected and promoted.