The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the proposed Free Trade Agreement (FTA) between India and Oman. This significant development paves the way for the Comprehensive Economic Partnership Agreement (CEPA) and comes ahead of Prime Minister Modi's visit to Oman from December 17-18.
The FTA is expected to deepen economic ties and create new avenues for trade and investment between the two nations. The agreement follows the Oman Shura Council's approval of the proposed FTA a day earlier. Negotiations for the agreement officially began in November 2023.
Prime Minister Modi's visit to Oman is at the invitation of Sultan Haitham bin Tarik. This visit marks the 70th anniversary of diplomatic relations between India and Oman. India and Oman share a longstanding strategic partnership built on trade links, energy cooperation, and deep cultural ties.
The Prime Minister's trip includes visits to Jordan and Ethiopia from December 15-18, demonstrating India's commitment to strengthening economic and strategic engagement across West Asia and Africa.
Bilateral trade between India and Oman has shown strong growth, reaching $10.613 billion in 2024-25, up from $8.947 billion in 2023-24. Investment flows have also been robust, with over 6,000 India-Oman joint ventures operating in Oman. These ventures represent an estimated $7.5 billion in capital over time, including formal outward investment and third-country investments channeled by Indian companies. Cumulative FDI equity inflows from Oman to India between April 2000 and March 2025 amounted to $605.57 million.
Oman is the third-largest export destination for Indian traders among the Gulf Cooperation Council (GCC) countries. The FTA is expected to grant India access to 98% of its products in Oman and provide significant access in services. It is also set to boost investment flows and strengthen India's position as a major trading partner in the GCC. India already has a similar agreement with another GCC member, the UAE, which came into effect in May 2022.
India's key imports from Oman include petroleum products and urea, accounting for over 70% of total imports. Other significant imports are propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminum.
The 14th round of the India-Oman Strategic Consultative Group (IOSCG) meeting was held on December 4, 2025, in Muscat, Oman. The meeting reviewed the multifaceted strategic partnership between the two countries in various areas, including political, defense, security, trade, investment, energy, agriculture, education, culture, and people-to-people ties. This year marks the 70th anniversary of the establishment of diplomatic relations between India and Oman. Oman hosts a large Indian community of around 675,000 people, who contribute significantly to the Omani economy.
With the CEPA, India will gain access to 98% of its products in Oman and significant access in services. The agreement is expected to benefit trade and investment flows between the two countries.
