India-Oman Vision Document To Expand Their Relations

Context: This article is based on the news “PM Modi, Oman’s Sultan adopt vision document, discuss Gaza” which was published in the Indian Express. The Sultan of Oman recently visited India marking the first State visit from Oman to India in the last 26 years. 

India-Oman Vision Document: Key Outcomes

• India-Oman Vision Document: India and Oman adopted a vision document titled ‘A Joint Partnership For The Future’ rooted in Oman’s ‘Vision 2040’, its national development blueprint, and India’s development vision of ‘Amritkaal’
  • The India-Oman vision document covers several sectors vital for upgrading the relationship including digital connectivity, medical tourism, maritime security, hospitality, agriculture, and food security.
• Focus on CEPA: Both pushed for finalizing a comprehensive economic partnership agreement (CEPA).
  • A CEPA is a free trade agreement between two countries and provides immediate and progressive duty reductions on imported goods and transparency in customs procedures for preferential treatment of imported goods.
• Third Tranche of Oman-India Investment Fund: Both announced the third tranche of Oman-India investment fund worth USD 300 million (around Rs 2,500 crore) for channelising investment into the fastest growing sectors of the Indian economy. 
  • The fund was established as a 50:50 joint venture between the State Bank of India (SBI) and the Oman Investment Authority.
  • The initial tranche amounting to USD 100 million, succeeded by an additional USD 200 million.
• Cooperation Agreements: Agreements were signed on cooperation in the field of information technology, combating financial crimes, culture, and the establishment of a Hindi chair of the Indian Council of Cultural Relations in Oman.
  • The Ministry of Culture decided to recreate the maritime voyage of a stitched ship which is expected to sail from Mandvi in Gujarat to Muscat during 2025 to ‘26.
• Digital Payment Cooperation: Discussion on the possibility of Oman leveraging India’s UPI digital payment system with a corresponding Omani platform, along with discussions on trade in Rupee was held.
• Space Collaboration: India and Oman have engaged in discussions regarding space cooperation, in various sectors including space-based systems, data services, and information exchange.
  • The focus areas included remote sensing, satellite launch, communication, and the practical applications of space technology.

About India-Oman Relations

• Historical Ties between India and Oman: People-to-people Connect between India and Oman can be traced back 5,000 years. 
  • Makran coast into the Gulf of Oman was an important trade route for the Indus region known as Meluha during ancient times.
• Geographical Proximity: Oman is the closest neighbor to India in the Arabian Gulf region.
  • Oman emphasizes its commitment to keeping the Straits of Hormuz open.
• Strategic Relations between India and Oman: Diplomatic relations were established in 1955 and the relationship was upgraded to a Strategic partnership in 2008 based on twin pillars of mutual trust and shared interests.
  • Essential Strategic partner: Alongside Saudi Arabia and the United Arab Emirates (UAE), Oman forms a trio of essential strategic partners for India in the Gulf region.
  • Oman’s Diplomatic Balancing Act: The nation has balanced its strong ties with Western powers and Gulf Cooperation Council (GCC) countries while adopting a pragmatic approach to its neighbor Iran. 

• • Oman As Crucial Pillar of India’s West Asia Policy: The multi-faceted engagement between the two countries has increasingly taking a more strategic shape in recent decades. Oman as an integral part of all important groupings in the region: 
  • The GCC, the Organisation of Islamic Cooperation, and the Arab League.
  • Oman was one of the few countries to have been invited by India to its G-20 presidency as a guest nation earlier this year.
• Defence Ties between India and Oman:  Regular exchange of visits by Defence Ministers of both sides. 
  • Oman is the only country in West Asia with which all three services of the Indian Armed Forces conduct regular bilateral exercises and service-level staff talk.
  • Oman is India’s closest defense partner in the Gulf region and defence cooperation has emerged as a key pillar of the strategic partnership between India and Oman.
• Security Cooperation between India and Oman:  Both the countries held a joint military drill ‘Al-Najah’ and naval exercises named Eastern Bridge and Naseem-al-Bahr respectively.
• Maritime Security: In recent years, both countries have cooperated in ensuring maritime security in the Indian Ocean region.
• • Operation Sankalp: It was launched during the Persian Gulf crisis in June 2019 to ensure the safe passage of Indian flagged ships operating off the coast of Oman.
  • MoU on Duqm Port: India signed the Memorandum of Understanding on Duqm Port, which gives Indian naval ships operating in the area access to basing facilities and other logistical support.
• Trade Ties between India and Oman: Trade and commerce forms an important pillar of the bilateral engagement. 
  • Bilateral trade between India and Oman during FY 2022-23 was $12.388 billion.
  • There are over 6,000 India-Oman joint ventures in Oman, with an estimated investment of over $7.5 billion.
  • Port of Duqm SEZ: It is earmarked to be the Indian Oceans largest deep sea port where an Indo-Oman Joint V enture, Sebacic Oman is undertaking a $ 1.2 billion project for setting up the largest Sebacic acid plant in the Middle-East.

• • The South Asia Gas Enterprise (SAGE), a private consortium based in India, has suggested laying a 1,400 km deep-sea pipeline from Oman to India for gas transfer. 
  • India was the second largest market for Oman’s crude oil exports for the year 2022 after China. 
  • In October 2022, India and Oman launched the Rupay debit card in Oman, a key footprint of India’s initiative of promoting digital public infrastructure (DPI) in the world.
  • Oman played a significant contribution to the Iran nuclear deal in July 2015.
• Cultural Ties:
  • The vibrant Indian expatriate community in Oman regularly hosts cultural performances and invites celebrity artists and singers from India. 
  • A MoU for cultural cooperation was signed between the two countries in 2010. 
  • National Archives of India and the National Records and Archive Authority of Oman (NRAA) actively cooperate under the MoU.
• Indian Diaspora: The presence of an Indian community of almost seven lakh people has contributed to the constantly evolving vibrant relations.

India-Oman Relations: Challenges 

• Security: Security challenges in the region have a ripple effect on India and, thus, any instability in the region has a direct bearing on the safety and security of the Indian diaspora, India’s energy security and its steadily growing trade relations. 
• Volatile Oil Economy: Oman’s economy is extremely vulnerable because of its heavy reliance on oil exports, which account for more than 90 percent of exports. 
  • This can negatively impact India’s energy interests.
• Slow Progress of Iran-Oman-India Pipeline:  India has been considering constructing an underwater natural gas pipeline via Oman, the Middle East to India Deepwater Pipeline (MEIDP) also known as the Iran-Oman-India pipeline. 
  • The Project aims to transport Iranian natural gas to India through Oman but it faces delays due to technological, sanction, and diplomatic Hurdles.
• China Angle: China has identified Oman as a key country in the region and has been enhancing defence ties with it steadily.
  • China has fostered strong relations with Oman, and Oman holds the distinction of being the first country to supply oil to China.
• The Duqm Factor:  India access to the Port of Duqm is a strategic move for India but the move could be perceived as a geopolitical maneuver, potentially leading to increased tensions in the region.
• Backing  Rebellious Groups: A number of interest groups have accused Oman of backing Saudi Arabia interests and the Houthi rebels in Yemen. 

Way Forward

• Joint Exploration of Rare Earth Metals: An agreement on joint exploration of rare earth metals, vital to modern electronic equipment will add strength to the partnership. 
• Role in IMEEC Infrastructure: Oman may play a significant role in the proposed  India-Middle-East-Europe Connectivity Corridor (IMEEC) infrastructure project, aiming to connect India to Europe through West Asia. 
•  The IMEEC  corridor will include a shipping route connecting Mumbai and Mundra (Gujarat) with the UAE, and a rail network connecting the UAE, Saudi Arabia, and Jordan with the Israeli port of Haifa to reach the shores of the Mediterranean Sea. 
• India’s Gateway to West Asia: Both countries consider themselves as ambassadors of peace and enjoy goodwill across ideologies in the world. Oman is, therefore, India’s gateway to West Asia. 
  • With the ongoing Israel-Hamas war testing the region to its limits, the visit of Oman’s Sultan is timely and very important for India and the region. 
• Broadening Cooperation:  India needs to broaden areas of cooperation with Oman, which has enormous business opportunities in shipping, transport, infrastructure building, mining, logistics and tourism.
• Monitoring China Influence: Although India and Oman enjoy unquestioned trust and mutual respect, slow and steady ingress of China into the equation needs to be closely monitored. 
  • China has been known to slowly influence state systems and make them financially dependent before exerting its total supremacy.
• Joint Collaboration for an Open and Peaceful Indo-Pacific: India needs to work closely with Oman to strengthen India’s Indo-pacific vision and find shared solutions to challenges faced in the region.

Must Read: West Asia: India’s Geopolitical Opportunity And Challenge

Conclusion:

India-Oman Vision Document marks a significant step in strengthening bilateral relations, encompassing economic, strategic, and cultural dimensions.