A free trade agreement, to be signed between India and Oman on Thursday, will open up opportunities in trade and joint investments to address the markets in the region concerned and beyond, Commerce and Industry Minister Piyush Goyal said on Wednesday . He listed sectors like textiles, footwear, automobiles, gems & jewellery, agro chemicals, renewable energy and auto components where the maximum gains in trade could be expected for India.
The Comprehensive Economic Partnership Agreement (CEPA) wil be signed by Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion of Oman Qais Al Yousef in the presence of Prime Minister Narendra Modi and top leadership of Oman. Modi arrived in Oman on Wednesday in the last leg of his three-nation visit.
“Sky is the limit in terms of potential particularly with Oman opening its doors as a gateway for the Gulf Region, Eastern Europe, Central Asia and Africa,” Goyal said while addressing India-Oman Business Forum meeting in Muscat.
Strategic Gateway
Apart from goods the collaboration in business services, research and development, tourism and education was also proposed.
The FTA will be Oman’s first such pact after a gap of more than two decades. Oman’s last FTA was signed with the US in 2006. India is Oman’s third largest trading partner. After the FTA with Oman, India will have a trade agreement with two of the six members of the Gulf Cooperation Council (GCC). India already has an FTA India already has an FTA with the United Arab Emirates (UAE) and is talking to Qatar to begin negotiations.
The Oman FTA might push talks with GCC for an FTA, which would be much bigger, experts said. India and GCC have been engaging off and on on FTA and now again the indications are there that these negotiations will also resume.
Oman is not positioning itself as an alternative to any economy but as a strategic partner of choice particularly for companies seeking a stable base to serve the wider region, Minister of Commerce, Industry and Investment Promotion of Oman Qais Al Yousef said in his address at the forum.
“Our strengths are advanced ports and logistics infrastructure, free and special economic zones. Competitive industrial platforms and a strong commitment to energy transition,” he added.
Goyal listed energy transition, infrastructure, food security and startups as areas of collaboration between the two countries. “Both countries are committed to energy transition whether it is renewable sources, battery storage, green hydrogen and ammonia.”
In infrastructure he listed multimodal logistics, ports, warehouses and co-development as areas of cooperation. Goyal offered help to Oman to ensure its food security. “We can explore whether we can work together to make it a hub to work for the rest of the region.”’
India and Oman launched CEPA negotiations in November 2023 and the last and fifth round was held in January 2025. After further discussions the text of the agreement was finally approved by top decision making bodies on both sides last week.
Unlocking 98% Market Access
With the CEPA, India is expected to get access to 98% of its products in Oman and significant access in services.
Oman’s import duty ranges from 0 to 100% along with the existence of specific duties.–100% duty is applicable on specific meats, wines and tobacco products. Other than trade, investment flows between the two sides are also expected to strengthen as a result of the agreement.
Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries. The bilateral trade between the two countries stood at $ 10.6 billion with India’s exports at $ 4.0 billion and imports at $ 6.5 billion.
The key exports from India include light oils and preparations, aluminum oxide, rice, machinery and mechanical appliances, electrical machinery and equipment as well as beauty and make-up preparations, plastics, iron and steel and ceramic products.
Crude petroleum oil and liquefied natural gas (LNG) account for a significant portion of imports. . Other major imports include urea, organic chemicals and sulphur.