NEW DELHI: India and Oman will sign a free trade agreement, officially known as the Comprehensive Economic Partnership Agreement (CEPA) on Thursday in Muscat with the aim of boosting economic ties between the two countries, an official said.
The agreement will be signed in the presence of Prime Minister Narendra Modi, who is on a four-day, three-nation visit. He arrived in Ethiopia on Tuesday from Jordan and will depart for Oman from Addis Ababa.
Commerce and Industry Minister Piyush Goyal has reached Muscat for the signing of the free trade agreement. Formal talks began in November 2023, and negotiations were concluded earlier this year.
Under free trade agreements, trading partners either significantly reduce or eliminate customs duties on a wide range of goods. Such pacts also ease norms to promote trade in services and attract investments.
Oman is India’s third-largest export destination among Gulf Cooperation Council (GCC) countries.
Speaking at the Oman–India Business Forum in Muscat, Goyal said teams from both countries had put in significant effort to finalise the pact. Oman is signing an FTA after a gap of nearly 20 years, having last entered into a similar agreement with the United States in January 2006.
“The free trade agreement offers immense opportunities for all of you,” Goyal told business leaders, highlighting the potential for greater cooperation in sectors such as textiles, footwear, automobiles and auto components, gems and jewellery, agrochemicals, and renewable energy.
Describing Oman as a gateway to other GCC countries, Africa and Central Asia, Goyal said there were strong prospects for collaboration in services including chartered accountancy, research and development, tourism, healthcare and education. He identified energy transition, infrastructure development, food security and startups as four key areas of cooperation.
India already has a similar trade pact with another GCC member, the UAE, which came into force in May 2022. Other GCC members include Bahrain, Kuwait, Saudi Arabia and Qatar. India and Qatar are also expected to begin negotiations for a trade agreement soon.
India–Oman bilateral trade stood at about USD 10.5 billion in 2024–25, with exports worth USD 4 billion and imports of USD 6.54 billion.
India’s key imports from Oman include petroleum products and urea, which together account for over 70 per cent of total imports. Other major imports are propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.
Major Indian exports to Oman comprise mineral fuels, chemicals, precious metals, iron and steel, cereals, ships, boats and floating structures, electrical machinery, boilers, tea, coffee, spices, apparel and food items.