Custom «National and International Trade of Oman» Essay Paper Sample
Oman is one of the leading trading countries in the Arab world. It trades with various countries in the world; exporting and importing certain products. Currently, Oman has trade links with Asia. One of its leading exports is oil that is exported to different parts of the world. Therefore, Oman participates in the national and the international trade. Oman's partnership with other countries has resulted in its successful trade. Oman earns a lot of foreign exchange from certain exports and imports with other countries. Some of its imports include manufactured goods, transport equipment, machinery, food, lubricants and livestock. Other imports include alcoholic drinks, agricultural products, pork meat, pharmaceuticals, copper cables, electric water heater, foam-rubber mattresses, metallic fences, mineral water, cement tiles, detergent products and baby's diapers. Machinery is the leading import while lubricants are the least imports in Oman.
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On the other hand, Oman has certain exports to other countries. These include reexports, metals, fish, textile and petroleum. The leading export among all these exports is petroleum. Moreover, Oman involves itself in a substantial trade surplus. Oil is the major export in Oman since 1967 to date. Then in 2000, motor vehicle and spare parts, and crude petroleum were the main exports in Oman. Other exports are apparel and tobacco (Ramady 408). Since Oman participates in international trade, it partners with various countries across the world. Some of the countries that export their products to Oman include Japan, South Korea, China, the United Emirates, Thailand and United States.
In fact, in 2000, Omani membership approved was accepted and approved by the General Council of the World Trade Organization. In November, 2000, Oman became a 139th member of the World Trade Union (Mueller 29). As a result, the membership in the WTO helped the country widen markets for its products all over the place. Additionally, Oman has continued to widen its market across the world in many ways. In fact, Oman signed a trade deal with India recently in an attempt to advance its trading activities. Also, Oman has great expectations the deal will doubly increase by 2020. Therefore, the Omani government is working towards the enhancement of the trade through the exports of petrochemical, food and infrastructure.
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There was a notable increase in this bilateral trade, in 2009-2010, from US $1.98 to US$4.53 billion. In preparation for the trade deal, different companies like Reliance, Birla Group and Tatas are already in Oman. Some of the public companies are also present in the country. Moreover, many Indian companies have already established manufacturing industries at the free trade area at the port town of Sohar. This way, the companies can make use of Oman to extend their markets to other countries like the United States. Furthermore, they will benefit from the trade agreement signed among Oman, India and Gulf Cooperation of Council (GCC). The agreement is beneficial in that the GCC (Kuwait, United Arab Emirates, Bahrain, Oman, Qatar and Saudi Arabia) is the major oil reserve. This will boost trade among these countries.
This bilateral trade between India and Oman involved a signing of the India, Oman joint investment fund. This was established in 2008 with the signing of a memorandum of understanding (Mou) between the State Bank of India, State General Reserve Bank (SGRB) and Oman's sovereign wealth fund (Ramady 418). The IOJIF, expected to have the first capital of $100m, though it was anticipated to increase up to $1.5 billion. India, expects to increase by two its bilateral trade with the Arab world. In its collaboration with Oman, India looks for investment opportunities in products such as infrastructure, pharmaceutical, energy and information technology (Hunter 398).
One of the business ventures already established in Oman is the India and Omani Fertilizer Company, which is operating on capital between two Indian companies and Oman Oil Company. Through Bharat Oman Refineries, the Oman Oil Company is investing in an oil refinery in Madhya Pradesh worth 6 million tones. In the GCC, the bilateral trade has increased rapidly (Hunter, 340). This is because of the consistent economic growth in the area in the last decade. The economic growth, in turn, has resulted in an increase in the middle class' size, and a rise in need for oil. Since the Western economy is exceedingly growing poor, India is the best investment region for the countries that experience inflation.
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However, this trade has showed a strong economic growth in the region for a long time. Therefore, Oman has become the second largest exporter of non-oil, after the United Arab Emirates. Its exports were approximately $650 million. Although Oman is the fifth biggest import market, Sultanate imported goods worth $1 billion from India (Hunter 442). In addition, the bilateral trade between the Oman and India has grown rapidly due to the cooperation that these countries have in common. For example, they have cooperation in sectors such as navigation and commerce, combating crime, trade and technical, agreement economy, manpower, higher education and investment fund.
The trading activities between these countries have withstood the racial and religious differences. This is due to a lot of engagements among the two countries in terms of banking, culture, connectivity and engagement. Socially, the Omani people are harmonious and tolerant. Also, they are very hospitable to the Indians and other people regardless of race and religion. This, in turn, boosts the trading activities between the two countries. Therefore, the Indian and Omani governments intend to improve these relations into commercial and political growth connections. Omani's intent is to modernize its oil gas industry through diversification. Conversely, India focuses its industry and infrastructure in order to enhance its growth.
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In conclusion, the participation of Oman in trading activities with other countries across the world makes it prosper in both national and international trade. Oman trades with other countries through exports and imports. Its business deal with India has boosted its economy and widened its markets in the world. The success of the bilateral trade is due to Oman's neutrality towards race and religion.