Story Gautam Viswanathan
Trade between Oman and India continues to hold strong, with the total value of exports and imports between the two countries once again crossing the OMR1 billion mark.
According to data released by Manafeth, the trade portal of the National Centre for Statistics and Information (NCSI), the total value of trade between the two countries was OMR 1.15 billion, with imports by Oman from India amounting to OMR 444.8 million, and exports to India from Oman reaching OMR 706 million
India was among the top five importers of goods from Oman in 2019. According to India’s Ministry of External Affairs, major items of Indian exports are mineral fuels and products of their distillation, textiles, machinery, electrical items, chemicals, iron and steel, tea, coffee, spices, rice, meat products and seafood. Among the major Indian imports are urea, LNG, polypropylene, lubricating oil, dates and chromite ore.
Economists in Oman have said that trade between the two countries will remain strong because of the ability of both nations to fulfil the needs of the other. Dr CK Anchan, the founder of World Wide Business House, a trade advisory body in the country, said, “The stage is set for India and Oman to enhance its vision of becoming great partners, Apart from defence, energy and maritime security, the two countries has shown considerable interest in expanding bilateral ties in the new areas of cooperation such as cyber security, outer space and renewable energy.
Anchan explained to T Magazine the qualities present in Oman that provided incentives for other countries to trade with and set up businesses in the Sultanate.
“Oman’s strategic location, highly desirable quality of life, young, multilingual workforce and diversified economy have made it an industrial and enterprise powerhouse and magnet for Indian companies looking to penetrate the fast-growing markets of the Gulf, Asia and Africa,” he revealed. “In addition, Oman’s cost of living is lower than many of its regional competitors, and a combination of market access and economic diversity provides the resources any company needs to flourish.
“Over the next 20 years, around three billion Asians will enter the ranks of the global middle-class, joining the consuming class with enormous implications for Oman’s economy, particularly in manufacturing, tourism, logistics, agriculture and fisheries,” he added, before shedding light on India’s diversified economy and highly skilled workforce.
“India ranks third among the most attractive investment destinations for technology transactions in the world,” Dr Anchan went on to say. “India is among the topmost countries in the world in the field of scientific research, positioned as one of the top five nations in the field of space exploration. The country has regularly undertaken space missions, including missions to the moon and the famed Polar Satellite Launch Vehicle (PSLV). India is likely to take a leading role in launching satellites for the SAARC (South Asian Association for Regional Cooperation) nations, generating revenue by offering its space facilities for use to other countries.”
A significant portion of exports to India consists of non-oil goods. Data released by the NCSI shows that non-oil exports sent to India in 2019 amounted to OMR 321.7 million. Indian companies have also invested plenty of money into projects in Oman’s industrial, tourism, manufacturing and oil and gas sectors.
Indian firms have invested heavily Oman in various sectors such iron and steel, cement, fertilizers, textile, cables, chemicals and the automotive industry, reports the Ministry of External Affairs. In Sohar, with an estimated total Indian investment of over $2 billion, Indian entities comprise the largest foreign investors. In Salalah, Indian investments are in manufacturing of automotive parts, textiles and cables. An Indo-Oman joint venture, Sebacic Oman, has set up the largest sebacic acid plant in the Middle East with an investment of $62.7 million.
A ‘Little India’ integrated tourism complex project in Duqm, worth $748 million in investment, has been undertaken by an Indian company, said the Indian MEA. The US$ 969 million, Oman India Fertilizer Company (OMIFCO) in Sur, Oman, is a shining example of the India-Oman partnership. It started operation in January 2006 with a long term buy-back agreement (valid up to July 2020) under which India imports the entire production of 1.6 metric tonnes of granulated urea and 0.255 metric tonnes of ammonia at a price cheaper than international market prices.
When it comes to cooperation in the oil a gas sector, India purchases oil from Oman in the spot market. In 2018, India was the second largest (after China) importer of Oil from Oman and imported 21,908 barrels that year. Indian Oil Corporation has acquired a 17 percent stake of Royal Dutch Shell’s Mukhaizna oilfield in Oman for $329 million. India has also invited Oman to participate in augmenting India’s strategic oil reserves.
Explaining why Indian firms were keen on investing in Oman, Ramanuj Venkatesh, a financial analyst in the Sultanate, said, “The trade relations between India and Oman have been quite good. Of particular note is that India has exported major services to Oman. Their geographical presence in this region makes it easy for them to form a trade partnership. You have many important companies here such as Larsen and Toubro, Oswal Oman Caustic, and even the automobile manufacturer TVS, which has set up operations in Salalah.
“Sohar and Salalah are two major important locations where trade can be done. Business here is still developing, but there is plenty of potential there. However, India and Oman’s key interest would also include Duqm, because many important materials can be imported and exported from here, and we will see India maintaining a key stake in developing this area. The two countries’ representatives also interact and meet with each other during exhibitions and conferences.
Venkatesh went on to say, “The key sectors of interaction when Indian businessmen come to Oman would be telecommunications, healthcare and construction, because these are areas of need to the Omani economy and consumers. Similarly, when Omani businessmen go to India, they are looking to source talent in areas such as health and safety, IT and telecommunications, and ceramics, for example. India’s foreign direct investment in Oman has crossed $7.5 billion, which bodes very well for the future.”