Oman to harness India opportunity

oman-sushmaWith Oman looking to reduce its economic dependence on oil and India ramping up its outreach to the Persian Gulf, Omani Foreign Affairs Yousuf bin Alawi bin Abdullah will be in India on April 2-3 to scale up economic and energy ties.

During April 2-3 visit, Oman’s Minister Responsible for Foreign Affairs will hold wide-ranging talks with India’s External Affairs Minister Sushma Swaraj to enhance economic and strategic partnership between the two countries. Issues relating to peace and security in the West Asia region will also figure in discussions.

Dr Abdullah had earlier visited India in February and June 2014 and Mrs Swaraj paid a return visit to Oman in February 2015. The two countries elevated their bilateral ties, underpinned by centuries-old cultural ties, to the strategic partnership two years ago.

Focus on trade and investment

Oman is a key trading partner of India in the Gulf region, with bilateral trade exceeding US$ 3.86 billion in 2015-16. Oman has increasingly turned to India as the Gulf country grapples with economic challenges triggered by falling prices of oil and growing concerns worldwide over fossil fuel. While bringing down its reliance on oil, Oman is looking to diversify its economy to other sectors like agriculture, shipping, manufacturing, mining, transport, tourism, and logistics. In January last year, Oman’s Supreme Council for Planning came out with a five-year plan (2016-2020) to reduce the Sultanate’s economic dependence on oil by 50 percent. Oman aims to achieve this by enhancing partnership with India in construction, investment, finance, insurance and telecommunications sectors.

India is the fifth largest exporter to Oman behind the United Arab Emirates, Japan, the United States, and China, supplying mainly textiles and garments, machinery and equipment, electronics, chemicals, iron, and steel, and food. Oman’s top exports to India are urea, LNG lubricating oil, dates and chromite ore. The Oman India Joint Investment Fund (OIJIF), a private equity fund backed by Oman’s sovereign wealth fund State General Reserve Fund and India’s largest lender State Bank of India, have approved a second tranche of $300 million to develop infrastructure projects and promote Omani-Indian joint ventures in technology, agriculture, marine, telecom, power water treatment, and logistics.

Investments from Oman and other Gulf countries are seen by New Delhi as the enabler of Prime Minister Narendra Modi’s ‘Make in India’ initiative to create a manufacturing hub in India. Indian investors built Muscat’s IT park, Knowledge Oasis, and a growing number of Omani and Indian academic institutions are establishing tie-ups.

Defence Ties

Defence cooperation between India and Oman has acquired a new traction. India’s then Defence Minister Manohar Parrikar had paid an official visit to Oman in May 2016 when four pacts were signed relating to maritime crime prevention and flight safety information exchange. Oman has helped Indian Navy ships in anti-piracy patrols and extended technical support for landing and over flight of Indian Air Force aircraft. The two countries have been holding joint defence exercises at regular intervals since 1993.

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