Muscat: India and Oman are set to formalise a free trade agreement on Thursday with the signing of the Comprehensive Economic Partnership Agreement (CEPA), a move aimed at significantly strengthening bilateral economic ties between the two nations.
The agreement will be signed in Muscat in the presence of Prime Minister Narendra Modi, who is currently on a four-day, three-nation diplomatic tour. Modi arrived in Ethiopia on Tuesday from Jordan and is scheduled to travel to Oman from Addis Ababa.
Union Commerce and Industry Minister Piyush Goyal has already reached Muscat ahead of the signing. Formal negotiations for the pact began in November 2023 and were successfully concluded earlier this year, officials said.
The CEPA is expected to substantially reduce or eliminate customs duties on a wide range of goods traded between the two countries. It also aims to simplify regulations to facilitate trade in services and promote greater investment flows.
Oman is India’s third-largest export destination among the Gulf Cooperation Council (GCC) countries. Addressing the Oman–India Business Forum in Muscat, Goyal said extensive efforts by teams from both sides had led to the finalisation of the agreement. He noted that Oman is entering into a free trade pact after nearly two decades, having last signed a similar agreement with the United States in January 2006.
“The free trade agreement presents vast opportunities for businesses in both countries,” Goyal said, highlighting sectors such as textiles, footwear, automobiles and auto components, gems and jewellery, agrochemicals and renewable energy as major beneficiaries.
Describing Oman as a strategic gateway to other GCC nations as well as markets in Africa and Central Asia, the minister pointed to strong potential for collaboration in services including chartered accountancy, research and development, tourism, healthcare and education. He also identified energy transition, infrastructure, food security and startups as priority areas for future cooperation.
India already has a comprehensive trade agreement with the United Arab Emirates, another GCC member, which came into effect in May 2022. The GCC also includes Bahrain, Kuwait, Saudi Arabia and Qatar, with India and Qatar expected to initiate trade negotiations in the near future.
Bilateral trade between India and Oman stood at approximately USD 10.5 billion in 2024–25. India’s exports accounted for about USD 4 billion, while imports from Oman were valued at USD 6.54 billion.
India’s major imports from Oman include petroleum products and urea, together making up more than 70 per cent of total inbound trade. Other key imports include polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.
On the export front, India ships mineral fuels, chemicals, precious metals, iron and steel, cereals, ships and boats, electrical machinery, boilers, tea, coffee, spices, garments and various food products to Oman.
