🗂️ Topic: Economy / International Trade / Bilateral Relations

India and Oman Strengthen Trade Ties Through CEPA Talks and DTAA Amendment

Introduction

India and Oman are making significant progress in deepening their economic partnership, with talks underway for a Comprehensive Economic Partnership Agreement (CEPA). The discussions gained momentum during the visit of India’s Commerce and Industry Minister Piyush Goyal to Oman. A revised Double Taxation Avoidance Agreement (DTAA) was also signed, marking a major step forward in facilitating cross-border trade and investment.

🤝 Recent Developments

• Key highlights from the visit:
  • Protocol signed to amend the DTAA (1997)
  • The amendment aligns with international standards
  • Focus: Simplify taxation, prevent double taxation, and support foreign investment
• CEPA negotiations, started in November 2023, are being fast-tracked

📜 What is DTAA?

• Double Taxation Avoidance Agreement (DTAA) is a bilateral tax treaty
• Purpose:
  • Prevent double taxation of the same income
  • Allocate taxing rights fairly between the two countries
  • Provide legal certainty to businesses
  • Encourage cross-border investments
• DTAA promotes:
  • Global tax transparency
  • Prevention of tax evasion
  • Ease of doing business internationally

🌍 India-Oman CEPA: Objectives & Scope

• The proposed Comprehensive Economic Partnership Agreement (CEPA) seeks to:
  • Eliminate or reduce tariffs on selected goods
  • Liberalize trade in services and investments
  • Harmonize regulatory procedures
• CEPA will:
  • Boost bilateral trade
  • Open new markets for Indian businesses
  • Promote technology transfer and industrial cooperation
• India already has a CEPA with the UAE (effective since 2022)

📊 Current Trade Snapshot (2023–24)

• India’s exports to Oman: ~$4.47 billion
• India’s imports from Oman: ~$4.5 billion
  • Major imports:
    • Petroleum products
    • Urea
  • Together, these two account for 70%+ of total imports

🔗 Impact on Bilateral Relations

• The CEPA and DTAA amendment are milestone agreements
• Expected outcomes:
  • Easier and more predictable tax environment
  • Stronger investor confidence
  • Greater strategic and commercial cooperation
• These agreements further cement India-Oman ties in:
  • Trade
  • Energy security
  • Geopolitical alignment in the Gulf region