MUSCAT, JULY 16 – A keenly hoped-for expansion of the ammonia-urea plant of Oman-India Fertilizer Company (OMIFCO) in Sur — a signature bilateral investment by the two countries — will have beneficial implications for both sides, according to a top Indian Minister currently on an official visit to the Sultanate. Suresh Prabhu, (pictured) Minister of Commerce and Industry, and Civil Aviation, Government of India, described the $1 billion OMIFCO project — a partnership of Oman Oil Company (50 per cent), Krishak Bharati Cooperative Limited (Kribhco) 25 per cent, and Indian Farmers Fertilisers Cooperative (IFFCO), 25 per cent — as a hallmark of economic ties between the two countries.
Prabhu, who is currently on a three-day official visit to Muscat, said: “I am glad that the OMIFCO Plant has been producing urea and ammonia to its full capacity. I had visited Oman in 1999 for finalising the details of the Project and I am glad to see that it has emerged as one of the best joint ventures between the two countries. We are happy to import the urea and ammonia produced by OMIFCO Plant which meets India’s growing requirements for fertilizers.”
Asked about the status of ongoing efforts between the two sides for an expansion of the capacity of the fertilizer project, the minister noted: “Both India and Oman will benefit from expansion of the production capacity of OMIFCO Plant and I am quite confident the concerned authorities of Oman will look favourably into the additional requirements of natural gas for expanding the production capacity of the plant through debottlenecking of the existing plant and building of a new line of production.”
All of the output from the joint venture project, comprising 1.65 million tonnes of urea and 250,000 tonnes of ammonia per year, is being shipped to India under a long-term offtake agreement. India has been keen for a significant expansion of capacity, but negotiations have stalled ostensibly on the price of natural gas as feedstock for the expansion.
Prabhu arrived here on Sunday to attend a series of bilateral meetings scheduled in Muscat. “My current visit to Oman is aimed at co-chairing, together with my Omani counterpart, HE Dr Ali bin Masoud al Sunaidy, Minister of Commerce & Industry, the 8th Session of Joint Commission Meeting (JCM), which is the highest bilateral ministerial mechanism between the two countries for a periodic review of the existing bilateral cooperation between the two countries in economic and commercial matters and identifying new areas of cooperation,” he said.
“There will also be a session of the Joint Business Council (JBC), which brings together leading business persons of India and Oman on a common platform to discuss new business opportunities between the two countries. We hope that through the meeting of JCM and JBC, we will be able to identify ways and means to expand our bilateral trade as well as mutual investments,” he further noted in comments emailed to the Observer.
Earlier, in a tweet, the minister hailed Oman-India relations, which “have grown from strength to strength in terms of business and trade”. “Bilateral trade between our two countries was valued at $6,703.76 million in 2017-18. We will work together to explore even more opportunities in bilateral trade,” he noted.
Prabhu attributed the upsurge in trade and economic relations to longstanding historical and geographical ties between the two countries. “India and Oman, maritime neighbours, have been partners in sea trade for thousands of years,” the minister said. “The diversification of Oman’s economy and the continued high growth of India’s economy offer opportunities for enhancing bilateral trade and investment relations between the two countries. India and Oman are geographically very close. There is excellent air and sea connectivity.”
Underpinning these robust ties, he said, were the high comfort levels that both sides enjoyed in each other’s markets. “Our business persons are familiar with one another’s market and business environments and the growing presence of the Indian community in Oman has provided a trade and investment bridge between the two countries, enabling expansion of business links. As the fundamentals of our economic relations remain strong, we hope that our economic and commercial relations will continue to expand in future.”
The minister also lauded the trajectory of trade ties which, although tilted in Oman’s favour due to its dominant hydrocarbon exports, is a positive trend. “We believe that more and more trade between the two countries serves the interests of the economies as well as the people of the two countries,” he said. “We are not worried that the trade balance is in favour of Oman. The fast growing economy of India offers huge opportunities for Oman’s oil as well as non-oil exports and we welcome continued growth in Oman’s exports to India.
At the same time, we will continue to encourage Indian exporters to look for opportunities for export of their goods and services to Oman and we believe that the diversification and expansion of Oman’s economy will present more opportunities for Indian exporters.”
The fast growing economy of India, he said, offers tremendous opportunities for investments by Omani businesspersons and funds. “India has emerged today as the best destination in the world for Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). India is located geographically very close to Oman. I would, therefore, like to encourage Omani
business persons and organisations to look carefully at the growing opportunities for more import of goods and services from India as well as their investments outside Oman into India,” he added.