IN a bid to strengthen economic ties, India and Oman are set to sign a Comprehensive Economic Partnership Agreement (CEPA) on Thursday as Prime Minister Narendra Modi visits Muscat.
Modi, who is on a three-nation tour, landed in Oman Wednesday, after visiting Jordan and Ethiopia.
Talks for the free trade agreement, officially termed as CEPA (Comprehensive Economic Partnership Agreement), formally began in November 2023 and the negotiations concluded this year. As part of the free trade agreements, the two trading partners either significantly reduce or eliminate customs duties on a maximum number of goods traded between them while easing norms to promote trade in services and attract investments.
Union Commerce Minister Piyush Goyal has reached Muscat for the FTA signing. Speaking at Oman-India Business Forum in Muscat, Goyal said teams of both countries have put a lot of effort to finalise the pact.
Oman is signing FTA after about 20 years. The country last inked a similar agreement with the US in January 2006, he said. “The FTA offers immense opportunities for all of you,” Goyal told the gathering of businesses.
He said huge potential is there to increase cooperation in sectors such as textiles, footwear, auto and auto components, gems and jewellery, agrochemicals, and renewable energy.
“We can look at collaborations in services sectors, such as chartered accountants, research and development, tourism, healthcare and education,” he said. The four prominent areas of collaboration are energy transition, infrastructure development, food security, and startups, he said.
Bilateral trade between India and Oman, the third-largest export destination for India among the Gulf Cooperation Council (GCC) countries, reached US$ 10.61 billion in FY 2024-25. India is Oman’s fourth largest source of non-oil imports and third largest market for non-oil exports (FY 2024–25).
Key export items from India to Oman are light oil, aluminium oxide, rice, boilers and machinery, electrical machinery, aircraft components, among others. Key imports from Oman to India include crude petroleum, LNG, urea, organic chemicals, ammonia, industrial raw materials, and plastics. There are over 6,000 India-Oman JVs in Oman adding US$ 7.5 billion to Oman’s economy in the form of total capital investment over a long period, encompassing formal outward direct investment of US$ 675 million, total value of all capital committed to JVs and the third country investments.
