Negotiations between India and Oman for a Free Trade Agreement (FTA) are moving forward, with both sides set to hold another round of talks to resolve any remaining issues.
According to an official, the discussions are progressing well, and progress has been made on several key points, including the resolution of matters related to petrochemical products.
The talks gained momentum following the visit of India's Commerce and Industry Minister Piyush Goyal to Muscat last month, where he engaged in discussions with Oman's Minister of Commerce, Industry, and Investment Promotion, Qais bin Mohammed Al Yousef.
The two nations are working towards finalising a Comprehensive Economic Partnership Agreement (CEPA). This agreement is expected to substantially reduce or eliminate customs duties on a wide range of goods traded between India and Oman.
Furthermore, it aims to ease regulations to facilitate trade in services and attract increased investment. India and Oman’s trade ministers held a crucial meeting in Muscat on January 27 to review the progress of the agreement and to push forward the negotiation process.
The official noted that another round of negotiations on the CEPA will soon take place to iron out remaining issues.
The first formal round of talks for the agreement started in November 2023, and the fifth round of discussions was held on January 14, focusing on boosting bilateral trade between the two countries.
The FTA with Oman holds particular significance as the country is India's third-largest export destination among the Gulf Cooperation Council (GCC) nations, following the UAE and Saudi Arabia.
India already has a similar FTA with the UAE, which came into effect in May 2022, strengthening economic ties within the region.
However, bilateral trade between India and Oman has seen a decline in recent years. In 2023-24, trade dropped to USD 8.94 billion, with India’s exports to Oman amounting to USD 4.42 billion and imports totalling USD 4.5 billion.
This was a decrease from USD 12.39 billion in 2022-23, when India’s exports stood at USD 4.47 billion, and imports were significantly higher at USD 7.91 billion. Despite this decline, the trade relationship remains important for both nations.
India's primary imports from Oman consist of petroleum products and urea, which together account for more than 70 per cent of the country’s total imports from Oman. Other key products imported include propylene and ethylene polymers, pet coke, gypsum, chemicals, and iron and steel.
With the FTA negotiations progressing, both countries aim to revitalise their trade and strengthen economic cooperation, fostering growth in both markets.
This agreement is expected to significantly enhance trade between the two nations, encouraging more business and investment in key sectors.
The CEPA will create new opportunities, particularly in areas where Oman holds a competitive advantage, such as petroleum and petrochemical exports.
By resolving existing trade barriers and improving ease of doing business, India and Oman are positioning themselves to build a stronger and more sustainable economic partnership.
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