India's UK, Oman trade agreements may figure in Commerce ministry's 100-day agenda for new government: official

”The majority of difficult matters in India-UK FTA negotiations are moving towards resolution, and both sides are actively engaged for a fair and equitable deal,” the official said. India and the UK launched talks for an FTA in January 2022. There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.

The 14th round of negotiations was held in January. Chapter-wise textual negotiations are near close, and the schedule on goods and services is at an advanced state of negotiations. Recently, a team from the UK visited India for negotiations on outstanding issues. The bilateral trade between India and the UK increased to $20.36 billion in 2022-23 from $17.5 billion in 2021-22.

According to a report by the think tank GTRI (Global Trade Research Institute), the overall gains for India in the trade deal will be limited because most of the goods from here are already entering the UK at low or zero tariffs (import or customs duties). In 2022-23, India’s merchandise exports to the UK were valued at $11.41 billion and out of this, $6 billion worth of goods such as petroleum products, medicines, diamonds, machine parts, airplanes, and wooden furniture entered Britain at zero levies, it has said.

However, there will be gains from reducing duties for Indian exports worth $5 billion and those items include textiles, apparel (shirts, trousers, women’s dresses, bed linen), footwear, carpets, cars, marine products, grapes and mangoes, the report has noted. On the proposed free trade agreement between India and Oman, the official said that this will be concluded ”very” soon.

For India, Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries. India has already implemented a trade pact with another key GCC member — the UAE. The bilateral trade between India and Oman stood at $12.39 billion in 2022-23 as against $10 billion in 2021-22. India’s exports have increased to $4.48 billion in 2022-23, while imports rose to about $8 billion in the last fiscal year.

Another GTRI report has stated that Indian goods worth $3.7 billion such as gasoline, iron and steel, electronics, and machinery will get a significant boost in Oman, once both sides reach a comprehensive free trade agreement as these goods at present attract 5 per cent customs duty. Export sectors which could get a boost in Oman include motor gasoline (exports worth $1.7 billion), iron and steel products (exports worth $235 million), electronics ($135 million), machinery ($125 million), textiles ($110 million), plastics ($64 million), boneless meat ($50 million), essential oils ($47 million), and motor cars ($28 million), will benefit from duty elimination, the report has said.

Key products imported by India to Oman in 2022-23 included petroleum products (USD 4.6 billion), urea (USD 1.2 billion); propylene and ethylene polymers (USD 383 million). Currently, more than 80 per cent of India’s goods enter Oman at an average of 5 per cent import duties, the GTRI report has said.

The current government has so far signed trade deals with Mauritius, Australia, the UAE and four European nations EFTA bloc. India has so far signed as many as 14 FTAs and six preferential pacts with its trading partners to promote exports and ensure greater market access for domestic goods and services.