India, Oman to sign free trade agreement in Muscat today to boost economic ties

New Delhi: India and Oman will sign a free trade agreement on Thursday in Muscat with an aim to boost economic ties between the two countries, an official said.

It 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 FTA signing.

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.

In free trade agreements, the two trading partners either significantly reduce or eliminate customs duties on a maximum number of goods traded between them. They also ease norms to promote trade in services and attract investments.

Oman is the third-largest export destination for India among the Gulf Cooperation Council (GCC) countries.

Meanwhile 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 a gap of about 20 years. The country last inked a similar agreement with the US in January 2006, he said.

"The free trade agreement 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.

Oman is a gateway for other GCC countries, Africa and Central Asia, the minister said adding, "We can look at collaborations in services sectors, such as chartered accountants, research and development, tourism, healthcare and education.”

The four prominent areas of collaboration are energy transition, infrastructure development, food security, and startups, he said.

India already has a similar agreement with another GCC member, the UAE, which came into effect in May 2022. The other members of the council are Bahrain, Kuwait, Saudi Arabia, and Qatar.

India and Qatar too will soon start talks for a trade pact.

India-Oman bilateral trade was about USD 10.5 billion (exports USD 4 billion and imports USD 6.54 billion) in 2024-25.

India's key imports are petroleum products and urea. These account for over 70 per cent of imports. Other key products are propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.

The main items of India's exports to Oman include mineral fuels, chemicals, precious metals, iron and steel, cereals, ships, boats and floating structures, electrical machinery, boilers, tea, coffee, spices, apparel, and food items.