New Delhi: The Union Cabinet has approved the proposed Free Trade Agreement (FTA) between India and Oman, paving the way for deeper economic ties between the two countries. This decision comes ahead of Prime Minister Narendra Modi's scheduled three-nation tour to Jordan, Ethiopia, and Oman from December 15-18. The FTA, officially termed the Comprehensive Economic Partnership Agreement (CEPA), is expected to be formally signed during the Prime Minister's visit to Oman on December 17-18.
The Prime Minister's visit to Oman holds significant importance as it coincides with the 70th anniversary of the establishment of diplomatic relations between India and Oman. This will be Modi's second visit to Oman. India and Oman share a longstanding strategic partnership, characterized by strong trade links, energy cooperation, and deep-rooted cultural connections.
Negotiations for the CEPA officially commenced in November 2023. Following multiple rounds of intensive discussions, both countries reached a consensus on all aspects of the agreement, including the text and market access provisions. The FTA aims to reduce trade barriers, promote economic integration, and create a predictable framework for long-term partnerships between India and Oman.
The agreement is expected to significantly boost trade and investment flows between the two nations. Bilateral trade between India and Oman has shown robust growth, reaching $10.613 billion in the fiscal year 2024-25, compared to $8.947 billion in 2023-24. Moreover, there are over 6,000 India-Oman joint ventures operating in Oman, with an estimated capital investment of $7.5 billion. Oman's cumulative FDI equity inflows into India between April 2000 and March 2025 amounted to $605.57 million.
Under the CEPA, India is expected to gain access to 98% of its products in Oman, along with enhanced access in the services sector. Key sectors that are likely to benefit from the agreement include energy, renewable energy, green hydrogen, manufacturing, IT, healthcare, education, and engineering. The FTA is also expected to facilitate smoother pathways for Indian professionals seeking opportunities in Oman.
Oman holds strategic importance for India as a gateway to the Middle East, Africa, and Europe. Its stable environment and business-friendly policies make it an attractive partner for Indian businesses. For Oman, India represents a large and growing market, a source of skilled labor, and a reliable economic ally.
The approval of the India-Oman FTA comes a day after Oman's Shura Council gave its nod to the agreement. The signing of the CEPA during Prime Minister Modi's visit is expected to further solidify the strategic partnership between India and Oman and unlock new avenues for cooperation. The visit will also provide an opportunity for both sides to review their bilateral relations, including trade, investment, energy, defense, security, technology, agriculture, and culture, and to exchange views on regional and global issues of mutual interest.
In addition to the FTA, discussions are underway to frame a joint defense partnership, potentially enabling India to receive spare parts from Oman's retired Jaguar fleet. Several documents are also under consideration for finalization, which are aimed at significantly deepening ties between the two countries.
