MAINS Current Affairs includes India–Oman Bilateral Relations & India and the United Kingdom Comprehensive Economic and Trade Agreement (CETA)

INTERNATIONAL RELATIONS

1. India–Oman Bilateral Relations

Context: Recently, the External Affairs Minister of India met his Omani counterpart in Muscat and reviewed the entire spectrum of bilateral cooperation including trade, energy, maritime security, connectivity, defence and regional issues.

India and Oman share one of the oldest and most stable relationships in West Asia, rooted in centuries of maritime trade and strengthened by strategic cooperation in the modern era.

Why is Oman Important for India?

Oman occupies a highly strategic position at the entrance of the Persian Gulf overlooking the Strait of Hormuz, through which nearly one-fifth of global oil trade passes.

For India, Oman serves as:

• A gateway to West Asia and the Gulf region.
• A key partner in ensuring energy security.
• A maritime partner in the western Indian Ocean.
• An important stakeholder in India’s Act West Policy.
• A major pillar of India’s SAGAR (Security and Growth for All in the Region)
• A crucial component of India’s emerging MAHASAGAR maritime strategy.

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 investmentsare in manufacturing, steel, cement, health care, education, hospitality, renewable energy and Information Technology.
      • Omani investmentsin 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

Political Cooperation

• Institutionalize annual strategic dialogue.
• Increase parliamentary and state-level exchanges.

Defence Cooperation

• Increase naval interoperability.
• Expand joint military exercises.
• Enhance Maritime Domain Awareness.
• Increase operational use of Duqm Port.

Trade and Investment

• Diversify trade basket.
• Promote MSME partnerships.
• Improve logistics connectivity.

Energy Transition Partnership

Focus on:

• Green hydrogen,
• Renewable energy,
• Critical minerals,
• Green ammonia.

Technology Cooperation

Promote cooperation in:

• Artificial Intelligence,
• Digital Public Infrastructure,
• Cyber security,
• FinTech,
• Semiconductor manufacturing.

Blue Economy Cooperation

Collaboration can be expanded in:

• Fisheries,
• Marine biotechnology,
• Port-led development,
• Ocean governance.

People-to-People Relations

• Protect welfare of Indian diaspora.
• Promote tourism.
• Expand educational exchanges.
• Strengthen cultural diplomacy.

Conclusion

India and Oman share a relationship that is civilizational in origin, strategic in character and future-oriented in vision. With strong complementarities in energy, maritime security, connectivity and emerging technologies, Oman remains one of India’s most trusted partners in West Asia.

As India’s engagement with the Gulf expands under the Act West Policy, cooperation with Oman will become increasingly important for safeguarding India’s energy security, maritime interests and Indo-Pacific ambitions.

ECONOMY

2. India and the United Kingdom Comprehensive Economic and Trade Agreement (CETA)

Context: India and the United Kingdom announced that the Comprehensive Economic and Trade Agreement (CETA) will come into force on 15 July 2026, marking one of the most significant trade agreements signed by India in recent years.

The agreement is expected to substantially deepen economic integration, expand market access, boost investments, generate employment, and strengthen the broader strategic partnership between the two countries.

Background of the Agreement

The India-UK trade negotiations were launched in January 2022 with the objective of strengthening bilateral economic relations following Britain’s exit from the European Union (Brexit).

Timeline of Negotiations

• 2022: Formal launch of Free Trade Agreement negotiations.
• 2022–2025: Fourteen rounds of negotiations covering goods, services, investments, intellectual property rights, government procurement, digital trade and labour mobility.
• May 2025: Negotiations concluded successfully.
• 24 July 2025: Official signing of the Comprehensive Economic and Trade Agreement.
• 10 February 2026: Signing of the accompanying Double Contribution Convention (DCC) on social security.
• 15 July 2026: Agreement enters into force.

The agreement represents one of India’s most comprehensive trade deals with a developed economy.

What is CETA?

The Comprehensive Economic and Trade Agreement is a broad-based trade and investment agreement aimed at:

• Liberalizing trade in goods and services.
• Reducing tariffs and non-tariff barriers.
• Promoting investment flows.
• Facilitating mobility of professionals.
• Improving market access.
• Strengthening cooperation in emerging sectors.

Unlike traditional FTAs focusing only on tariffs, CETA covers a much wider economic ecosystem.

Key Highlights and Benefits of the Agreement

• For India:
  • Duty-free access to the UK market for 99% of Indian products:This is a huge win for Indian exports, especially in labour-intensive sectors like textiles, footwear, gems and jewellery, and engineering goods, which previously faced duties of 4% to 16%.
  • Easier entry for Indian professionals: The agreement provides assured temporary access to the UK market for Indian professionals like chefs, yoga instructors, and IT specialists.
  • Boost for Manufacturing: Sectors like electronics, pharmaceuticals, chemicals, food processing, and plastics are expected to see a boost in exports.
  • Boost for Agriculture and Fisheries:Indian farmers and the fisheries sector will benefit from duty-free access for many agricultural and marine products, allowing them to compete better in the UK market.
• For the UK:
  • Reduced tariffs on nearly 90% of UK goods entering India:This will make British products more affordable in India.
  • Big cuts on duties for British whisky and gin: Tariffs on popular British products like whisky and gin will drop significantly, from 150% to 75% immediately and then gradually to 40% within ten years. This gives UK distillers a significant advantage in the large Indian market.
  • Lower tariffs on certain UK-made automobiles:Car duties will be reduced, improving the competitiveness of British car manufacturers in India.
  • Access to Indian federal government procurement tenders: UK firms can bid for government contracts in India worth over a certain amount, opening up a large market.
  • Benefits for financial and professional services:The agreement includes commitments that benefit UK companies in IT, financial services, and professional services like consulting and engineering.

Overall Impact

• The deal is expected to significantly increase bilateral trade with projections aiming to double it to around $120 billion by 2030.
• Zero or reduced tariff for 99 percentof Indian exports to the UK, which is a stronger position for India vs. other leading export markets such as Bangladesh, Vietnam, and China.
• Export boost in leading manufacturing clusters in Tiruppur, Surat, Ludhiana, Pune, Chennai, Gujarat, West Bengal, Assam, etc.
• It’s seen as a major economic win for both countries, creating jobs, boosting wages, and driving growth.
• The FTA is also accompanied by a UK-India Vision 2035 roadmap,aiming to deepen ties in areas like defence, climate solutions, and education.

Key Economic Gains

• Agreement on Social Securityalso referred to as the Double Contribution Convention (DCC), entering into force alongside the Agreement, exempts Indian workers and employers from making dual social security contributions in the United Kingdom during temporary assignments.
  • The period of exemption has been increased from3 years to 5 years.
• Interests of Steel Exporters Protected:Following constructive deliberations regarding the UK’s upcoming steel measures effective from July 1, 2026, both sides mutually agreed to protect commercial interests, minimize market disruptions, and ensure an overall balanced and stable trading environment for exporters.
  • 85% of India’s exports are out of the Steel measures.
  • On the lines under the Steel measuresIndia’s interest has been protected through a mix of CSQ, residual quota and access under Authorised Use Scheme (AUS).

Challenges Associated with CETA

1. Stringent Quality Standards

The UK market follows very strict standards related to:

• Food safety,
• Sanitary measures,
• Environmental standards,
• Product certification.

Indian exporters may face compliance challenges.

2. Increased Competition for Domestic Industry

Reduced tariffs may expose Indian industries to competition from UK firms in sectors such as:

• Premium automobiles,
• Luxury goods,
• Machinery,
• Alcoholic beverages.

3. Non-Tariff Barriers

Even after tariff reductions, Indian exporters may continue facing:

• Technical barriers,
• Certification requirements,
• Sustainability regulations,
• Carbon border taxes in future.

4. Limited Awareness Among MSMEs

Many small exporters lack knowledge regarding:

• Rules of origin,
• Documentation requirements,
• Certification standards.

As a result, actual utilization of FTA benefits may remain low.

Way Ahead

• Improve productivity, technology adoption, and quality standards to enable Indian firms to compete effectively in the UK market.
• Provide training, digital platforms, and institutional supportto help MSMEs understand Rules of Origin, certification processes, and FTA benefits.
• Expand testing laboratories, certification facilities, and regulatory frameworks to align Indian products with international standards.
• Encourage diversification of exports, promote high-value manufacturing, and integrate Indian industries into global value chains to fully leverage CETA benefits.

Conclusion

The India–UK Comprehensive Economic and Trade Agreement represents a landmark milestone in India’s trade diplomacy and reflects the country’s growing integration with advanced global economies.

The agreement combines market access, investment promotion, professional mobility and strategic cooperation, making it one of India’s most ambitious trade agreements to date.

If effectively implemented, CETA has the potential to transform India from a large domestic market into a major global manufacturing and export hub while strengthening the broader India-UK strategic partnership.

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