About Us India - Oman Bilateral Economic and Commercial Relations

Embassy of India
Muscat
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Brief on India-Oman Economic and Commercial Relations

1.         The economic and commercial relations between India and Oman are robust and buoyant. Bilateral trade during FY 2019-20 was approximately US$ 6 billion. Investment flows, both ways, have been robust, as reflected in numerous joint ventures, established both in India and Oman. There are over 4100 India-Oman joint ventures in Oman with estimated investment of over US$ 7.5 billion. Indian companies have emerged as leading investors in Oman, particularly at Sohar and Salalah Free Zones.

2.         Both India and Oman accord high priority to strengthening economic and commercial relations between the two countries. Economic cooperation between India and Oman is reviewed thorough the institutional mechanism of India-Oman Joint Commission Meeting (JCM). Traditionally, meeting of India-Oman Joint Business Council (JBC) also takes place parallel to JCM and serves as a platform for interaction between captains of industry in India and Oman. Last meetings of JCM (8th session)  and JBC (9th session) were held on 16-17 July, 2018 in Muscat, co-chaired by Shri Suresh Prabhu, the then Minister of Commerce & Industry and Civil Aviation (CIM), and Dr Ali Al Sunaidy, Omani Minister of Commerce & Industry.  The JCM afforded an opportunity to review the entire gamut of bilateral economic relations between India and Oman. A number of new areas for cooperation were identified during the discussions such as food security, space cooperation, minerals and mining, etc.

3.         Key existing Agreements and MOUs relating to bilateral economic cooperation between India and Oman cover Legal and Judicial Cooperation in Civil & Commercial Matters; Avoidance of Double Taxation; Oman-India Joint Investment Fund (OIJIF); cooperation between the State Audit Institution  of  Oman  and  the  Office  of  the  Comptroller  and  Auditor  General  of India; and cooperation in the fields of Tourism; Health; Peaceful use of Outer Space; Science & Technology; Civil Aviation and Agriculture. The Agreement on Maritime Transport between India and Oman was recently signed during the visit of Hon’ble External Affairs Minister of India to Oman from 23-25 December 2019.

India-Oman Bilateral Trade
4.         India is among Oman’s top trading partners. Oman was India’s 39th largest trade partner and 36th largest export market in the world in FY 2018-19. For Oman, India was the 3rd largest (after UAE and China) source for its imports and 3rd largest market (after UAE and Saudi Arabia) for its non-oil exports in 2018. India was the source of about 4.40 % of Oman’s total imports and destination of about 10.21% of Oman’s total non-oil exports in 2018. India imported 6.90%of Oman’s total oil exports in 2018.

5.         The bilateral trade witnessed a decline in 2014-15, and in 2015-16 on account of fall in oil prices. During FY 2016-17, bilateral trade improved and reached above US$ 4 billion. During FY 2017-2018, the bilateral trade saw exponential growth and reached US$ 6.7 billion, registering a 67.5 per cent increase over FY 2016-17. The main reason for this hike in bilateral trade was recovery in oil prices and import of higher quantities of oil by India from Oman.  During FY 2018-19, the bilateral trade stabilized at US$ 5.003 billion and it has seen a upward trend during 2019-20 reaching US$ 5.93billion.

Volume of India-Oman bilateral trade in recent years


Values in US$ million (Source, DOC, MOCI)

Financial Year

India’s export to Oman

India’s Imports from Oman

Total Bilateral Trade

Growth in bilateral trade (%)

2012-13

2599.49

2009.72

4609.21

-1.26

2013-14

2812.27

2951.18

5763.45

25.04

2014-15

2,379.44

1,752.24

4,131.69

-28.31

2015-16

2,190.86

1,673.00

3,863.86

-6.48

2016-17

2,728.30

1,674.71

4,018.79

3.97

2017-2018

2,439.46

4,264.29

6,703.76

67.5

2018-19

2,246.31

2,757.60

5003.91

-25.36

2019-20

2261.81

3669.33

5931.14

18.53

6.         Main items of India’s exports to Oman:  Mineral fuels, mineral oils and products of their distillation; articles of iron and steel; cereals; machinery and mechanical appliances; electrical machinery & equipment; rice; iron & steel; organic chemicals; etc. in addition to traditional export items like tea, coffee, spices, dairy produce, articles of apparel, meat and other food items, etc.

7.         Main items of India’s imports from Oman: Petroleum oils and oils obtained from bituminous minerals crude; Liquefied Natural Gas; petroleum gases and other gaseous hydrocarbons; mineral or chemical fertilizers (nitrogenous); salt, sulphur; earths and stone; plastering materials, gypsum, lime and cement; urea; crude oil (through spot purchase); aluminium; iron & steel; cement, asbestos, mica, organic chemicals; ores, slag and ash; etc.

8.         Potentials for enhancing bilateral trade: India and Oman, given the advantage of proximity, connectivity and familiarity with each other’s markets, have great potentials for enhancing bilateral trade.  Some commodities with scope for more trade with Oman, as identified by Department of Commerce of India, include petroleum products, gems & jewelry, engineering products, pharmaceuticals, cement & ceramic products, products of chemicals & allied products. Indian Embassy has been encouraging Indian businesspersons to do more business with Oman in sectors with untapped potential like renewable energy, engineering goods, power equipment, minerals and mining, IT, pharmaceuticals, etc.

India-Oman Bilateral Investment
9.         Investment flows, both ways, have been robust, as reflected in numerous joint ventures, established both in India and Oman. According to Oman’s Ministry of Commerce and Industry, there are over 4100 Indian enterprises and establishments in Oman with an estimated investment of over US$ 7.5 billion.

10.       Oman-India Joint Investment Fund (OIJIF): The OIJIF is a 50-50 Joint Venture between State Bank of India and State General Reserve Fund (SGRF) of Oman, the main sovereign wealth fund of Oman. It was set up in July 2010 as a special purpose vehicle (SPV) to invest in India. OIJIF commenced its operations in 2011 with initial seed capital of US$ 100 million which was fully invested across seven Indian companies from diversified sectors (i.e. Solar Industries, ING Vysya Bank, HBL Power Systems, Indus Teqsite, GSP Crop Science, NCDEX and SSIPL). OIJIF has launched Fund II in 2017 with target corpus of USD 300 million and has announced first closure at US$ 220 million. The Tranche II capital raised has so far been invested across five companies viz. Divgi TorqTransfer Systems (automotive industry), Annapurna Finance Pvt. Ltd. (microfinance),  Stanley Lifestyles (luxury furniture space) and PNB Metlife (private life  insurer) and most recently (November 2019) in Capital Small Finance Bank in Punjab with an investment of RO 4.5 million (Rs.84 crores).

11.       According to data of Department of Industrial Policy & Promotion (DIPP), the cumulative FDI inflows from Oman during April-2000 to March 2019 is US$ 502 million. Oman Oil Company, an Omani public sector company, has 26% stake in Bharat Oman Refineries Limited (BORL) which owns and operates Bina Refinery, India's largest oil refinery.

12.       Oman India Fertilizer Company (OMIFCO): OMIFCO at Sur, Oman, is a US$ 969 million joint venture between Oman Oil Company (50% stake) and IFFCO (25% stake) and KRIBHCO (25% stake) of India. The plant has the capacity to produce 1,750 tonnes a day of anhydrous ammonia from two ammonia plants and 2,530 tonnes a day of granular urea from two urea plants. Government of India had a long-term Urea Off Take Agreement (UOTA) with OMIFCO to lift its entire production of urea. The Omani Ministry of Oil & Gas supplies the gas as feedstock, at below market price, under a long-term Gas Supply Agreement (valid upto 2025) with OMIFCO.

13.       Indian investments in Oman:Indian firms have invested heavily in Oman in various sectors like iron and steel, cement, fertilizers, textile, cables, chemicals, automotive, etc.  Indian entities comprise the largest foreign investors in Sohar, with an estimated total Indian investment of over US$2 billion in projects from Larsen and Toubro, Jindal Shadeed Iron & Steel, Indsil Ferrochrome, Metkore Alloys & Industries, Moon Iron & Steel Company and SV Pittie Sohar Textiles, etc,. Recently, Sohar Port and Freezone and Madhav Surfaces (a JV between Al Khanjar Commercial Agencies, a subsidiary of Khimji Ramdas and Madhav Ashok Ventures Private Limited (MAVPL) based in India) signed a land lease agreement for establishment of a quartz manufacturing plant with total investment of US$ 10 million. In Salalah, Indian investments are in manufacturing projects like TVS Chennai’s Dunes Oman LLC (automotive), Oswal Group’s Saltic FZCO (Chemicals), Hind Aluminium (Cables), Kailash Group’s guar processing unit,Nagarjuna Fertilizer plant, Future Bio Organics, Deepak Nitrate, Petiva Sugar factory, etc. In Duqm Special Economic Zone also, an Indo-Oman JV Sebacic Oman has undertaken a US$ 62.7 million project for setting up the largest Sebacic acid plant in Middle-East. ‘Little India’ a tourism complex project in Duqm, worth US$ 748 million on completion, has also been undertaken by the same Indian company.

14.       In addition, L&T, Jindal, EPIL, Shapoorji Pallonji, Shriram, Aditya Birla Group, Nagarjuna Construction Company, Simplex, KEC International, etc.  aresome of the well-known Indian companies which have been executing various projects in Oman. Indian firms have gained a reputation for excellence in sectors like construction and engineering, waste management, logistics, manufacturing, finance and capital, software solutions, communications, oil and gas etc.

15.       Indian financial institutions such as State Bank of India, Bank of Baroda, HDFC Ltd and ICICI Securities operate in Oman. Public Sector Undertakings such as Air India, Air India Express, Life Insurance Corporation (LIC), New India Assurance Co., Telecommunications Consultants India Ltd. (TCIL), Engineers India Ltd.(EIL), Engineering Projects India Limited (EPIL), Bharat Electronics Limited (BEL) and National Building Construction Company (NBCC)  have presence in Oman.

16. ITEC:Under theIndian Technical & Economic Cooperation (ITEC) Programme, Omani Officials have been availing training in many premier institutes of India.  A total of 125 training slots were offered for Oman for FY 2018-19 under the ITEC programme which were almost fully utilized by Oman. In FY 2019-20 also Oman has been offered 125 slots under ITEC programme.

Trade and investment promotion activities
17.       Indian business delegations, coordinated by various Indian Chambers, regularly visit Oman to participate in trade exhibitions like BIG Show, Infra Oman, COMEX, IMTEC, Oman Health Exhibition & Conference, Oman Food & Hospitality Exhibition, Mineral and Mining Exhibition, Oil and Gas West Asia etc. Similarly, Omani business delegations also visit India to participate in exhibitions related to sectors like Health, Food, Ceramics, IT and Electronics, etc. To facilitate interactions and tie-ups between business communities of India and Oman, Indian Embassy regularly organizes various sector–specific Business-to-Business Meetings. The Embassy also organizes ‘India Business Forum’ regularly and annual ‘Invest in India’ Seminars. The Embassy also organizes events aimed at promotion of tourism and medical tourism to India.

18.       If you are looking to invest in India:

  • All facilitation and hand-holding support to investors under the “Make in India” programme is being provided by Invest India.
  • Indian Embassy can also be contacted at : com.muscat@mea.gov.in
  • Government of India’s policies related to Investment: https://dipp.gov.in/policies-rules-and-acts/press-notes-fdi-circular
  • Trade Enquiries: The Embassy regularly responds to trade queries and facilitate in linking of exporters from India or Oman to potential importers in the other country. Trade queries may be emailed at com.muscat@mea.gov.in.

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September 2020