India stands firm: No duty concessions on liquor, cigarettes in Oman FTA

India is not seeking customs duty concessions on over 100 product categories such as liquor and cigarettes in the proposed free trade agreement (FTA), which is under negotiations between the two countries, sources said. They also said that though the FTA negotiations were concluded, Oman has sought revision of its market access offers on some products.

Minimal Changes Anticipated

The two sides have discussed three to four issues flagged by Oman, and any potential changes would be minimal, they said. India is expected to gain greater market access for about 98 per cent of its goods in Oman, along with significant access to the services sector. "There could be about 125-130 tariff lines (or product categories), where we have not asked for duty concessions and that included goods like liquor and cigarettes," they added.

Recent Round of Talks

On January 14, India and Oman held the fifth round of talks for the agreement, which is aimed at boosting bilateral economic ties. The negotiations for the agreement, officially dubbed as Comprehensive Economic Partnership Agreement (CEPA), formally began in November 2023. Oman's import duty ranges from 0 to 100 per cent along with the existence of specific duties. On specific meats, wines, and tobacco products, a 100 per cent duty is applicable.

Concerns from Indian Petrochemical Industry

According to industry sources, India should not extend duty concessions on petrochemical products, a key demand of Oman. Indian petrochemical industry which comprises both large public sector units and private players have raised their serious concerns and requested the government not to accede to this demand of Oman, they said. "In petrochemical sector, feedstock constitutes a significant portion (about 65-70 per cent) of the total product cost such as Polyethylene (PE), Polypropylene (PP), Polyvinyl Chloride (PVC), Polyethylene Terephthalate (PET) etc."

Potential Influx of Low-Cost Imports

Therefore, feedstock pricing makes a critical determinant of overall competitiveness in the petrochemical industry," the industry sources said. They added that Oman has a distinct feedstock cost advantage due to its abundant natural resources and has a significant exportable surplus of petrochemical products with minimal domestic demand.

Trade Dynamics Between India and Oman

"Any tariff concessions to Oman would lead to an influx of low-cost petrochemical imports, adversely affecting the Indian petrochemical industry," they said. Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries.

(Except for the headline, nothing has been changed by All India News Network in the PTI copy.)