India–Oman Bilateral Relations

Syllabus: GS2/International Relations

Context

• Recently, the External Affairs Minister of India met his Omani counterpart in Muscat and held discussions on various facets of the cooperation between the two countries.

About India-Oman Relations

• The Sultanate of Oman is a strategic partner of India and an important interlocutor at the Gulf Cooperation Council (GCC), Arab League, and Indian Ocean Rim Association (IORA) fora.
• India and Oman have a historic, multi-dimensional and strategically important relationship.
• Oman, strategically located at the mouth of the Persian Gulf overlooking the Strait of Hormuz, is a critical maritime partner for India’s energy security, trade and Indo-Pacific vision.
• Significance for India:
  • Gateway to West Asia and the Gulf;
  • Strategic position near the Strait of Hormuz;
  • A reliable power supplier;
  • Resilient defence and maritime co-operation;
  • Key partner in India’s West Asia Policy, SAGAR (Security and Growth for All in the Region) and MAHASAGAR maritime vision;

Historical Development

• Ancient Period: Thriving sea trade of spices, textiles, dates, copper, frankincense.
• Colonial Era: Traders from Gujarat and Kerala in India set up thriving business communities in Muscat.
• Post Independence: Diplomatic relations were established in 1955 and consolidated after Sultan Qaboos assumed power in 1970.
• Strategic Partnership (2008): Enhanced cooperation on defence, maritime security, energy, trade and investment.
• Contemporary Phase: Relations diversified to technology, renewable energy, food security, digital economy, connectivity

India-Oman Relations: Key Dimensions

• Political Relations: Regular visits at high level. Institutional dialogue through Joint Commission Meeting (JCM), Foreign Office Consultations and strategic consultations.
  • Oman continues to be one of India’s most reliable partners in the Gulf.
• Defence and Security Cooperation: Defence Cooperation is one of the strongest pillars of bilateral relations.
  • Defence Exercises: AL NAJAH Exercise (Army), Eastern Bridge Exercise (Air Force) and Naseem Al Bahr Exercise (Navy)
  • Security Cooperations: Maritime Security, Naval Cooperation, Hydrography, Counter Terrorism, Anti-Piracy Operations, White Shipping Information Sharing and Capacity Building
  • Strategic Significance: Oman gives India operational access to the Port of Duqm, thereby extending India’s naval footprint in the western Indian Ocean.
    • Duqm Port provides logistics, ship maintenance and strategic access to Africa and West Asia.
• Economic and Trade Relations:
  • Bilateral Trade: US$ 8.947 billion (FY 2023-24) and 10.613 US$ billion (FY 2024-25)
  • Main Indian Exports: Engineering goods, food products, rice, pharmaceuticals, machinery, textiles, chemicals.
  • Key Imports: Crude oil, LNG, fertilisers, petrochemicals, minerals.
  • Investment:
    • Indian investments are in manufacturing, steel, cement, health care, education, hospitality, renewable energy and Information Technology.
    • Omani investments in India are increasing with sovereign wealth funds and private enterprises.
• Energy Cooperation: Key areas are long term crude oil supplies, LNG imports, petrochemicals, green hydrogen, renewable energy, clean fuels and strategic petroleum cooperation.
  • The two countries are looking at collaborating on green hydrogen, green ammonia and energy transition technologies.
• Diaspora Relation: India has the largest expatriate community in Oman with more than 6 lakh Indians living and working there .
  • Indians contribute significantly in healthcare, education, engineering, banking, construction, services and Information Technology.
• Cultural Relations: India-Oman have vibrant civilisational links and celebrate Indian festivals and cultural exchanges.
  • Cooperation in education and traditional medicine and Indian schools operate throughout Oman. 

Issues in India–Oman Relations

• Economic: Low levels of bilateral trade, below potential, and limited diversification beyond hydrocarbons.
• Geopolitical: Regional instability in West Asia; Iran–Gulf tensions; and maritime security challenges in the Arabian Sea and Gulf region.
• Competition: Growing engagement of China, United States and European states in Oman’s infrastructure and strategic sectors.
• Labour Issues: Omanisation policy could reduce opportunities for foreign workers; and need for continuous skill upgradation of the Indian workforce.
• Connectivity: Limited direct integration of logistics; Scope to improve connectivity for shipping and air cargo.
• Investment Bottlenecks: Regulatory procedures and need for more private-sector participation.

Way Forward: Deepening India-Oman Relations

• Political: Institutionalise annual strategic dialogue; and increase parliamentary and state level exchanges
• Defence: Enhance naval interoperability; boost joint military exercises; reinforce Maritime Domain Awareness; and operationalise greater use of Duqm Port.
• Trade: Expand trade basket, facilitate MSME collaboration, and enhance logistics connectivity.
• Energy: Transition from hydrocarbons and Develop partnerships in green hydrogen, green ammonia, renewable energy, critical minerals and carbon capture technologies.
• Investment: Promote joint ventures, encourage sovereign wealth funds’ participation and build industrial corridors and logistics hubs.
• Technologies: AI cooperation, digital public infrastructure, cyber security, FinTech, semiconductor collaboration and start-up ecosystem.
• Blue Economy: Fisheries, marine biotechnology, port-led development and ocean governance.
• People-to-People: Safeguard welfare of diaspora; increase educational exchanges; and promote tourism and cultural diplomacy.

Source: News On AIR