By [Your Name] | May 3, 2025
India and Oman are on the brink of signing a landmark Free Trade Agreement (FTA), with Union Commerce and Industry Minister Piyush Goyal set to visit Muscat this month to advance negotiations. The Comprehensive Economic Partnership Agreement (CEPA), which has been under discussion since late 2023, is expected to be a major topic during the eleventh session of the India-Oman Joint Commission Meeting (JCM).
The visit could mark a turning point in India’s growing trade relationships with the Gulf Cooperation Council (GCC) countries. Oman, a key partner in the region, is considered vital for India’s broader economic and strategic goals in the Middle East.
What’s at Stake: $3.7 Billion in Trade Potential
The CEPA aims to eliminate or significantly reduce import tariffs, particularly the 5% duty currently applied to over 80% of Indian goods entering Oman. If finalized, this agreement could potentially boost India’s exports to Oman by up to $3.7 billion over the coming years.
India exports a wide range of products to Oman, including petroleum items, iron and steel, electrical machinery, food products, and textiles. These goods make up a substantial part of India’s trade with the Gulf nation. Reducing or removing duties on these products would make Indian exports more competitive in the Omani market and provide a much-needed boost to Indian manufacturers and exporters.
Strong Bilateral Trade, But a Recent Decline
Historically, India and Oman have enjoyed strong trade ties. Oman is India’s third-largest export destination among the GCC nations. In 2022–2023, the total trade between the two countries stood at $12.39 billion. However, this figure dropped to $8.94 billion in 2023–2024, largely due to global supply chain disruptions, changing oil prices, and slowing demand across key sectors.
This recent decline has made the CEPA even more urgent. Indian officials hope that by removing trade barriers and easing access to each other’s markets, the partnership will regain its strength and return to a path of growth.
Key Sectors to Benefit from the Agreement
Several Indian industries are expected to benefit if the agreement is finalized. The apparel and textile industry, in particular, is optimistic. The Apparel Export Promotion Council (AEPC) has expressed strong support, saying the removal of Oman’s 5% customs duty on readymade garments would give Indian exporters a competitive edge in the Gulf region.
Similarly, manufacturers of machinery, electronics, and chemicals are eyeing new opportunities. With fewer trade barriers, Indian firms could expand their presence in Oman and even use it as a base to reach other markets in the Middle East and Africa.
Pharmaceuticals and medical device companies may also benefit from streamlined regulations and better market access. India’s reputation as a reliable and cost-effective supplier of medicines could help meet Oman’s growing healthcare needs.
Oman’s Interests and Concerns
While India is keen to open up more opportunities for its exporters, Oman also has its own priorities. One of the sticking points in the negotiations is Oman’s request for better access to the Indian market for certain petrochemical products, particularly polyethylene and polypropylene. These are essential components in packaging, construction materials, and medical equipment.
Currently, these products face a 7.5% import duty in India. Oman is requesting a reduction or elimination of these duties to make its products more competitive. However, India is approaching this request cautiously, considering its own domestic manufacturers in the chemical and plastic sectors.
Negotiators on both sides are working to find a middle ground that balances market access with protection for sensitive industries.
Strategic Importance Beyond Trade
The India-Oman CEPA is not just a trade agreement—it is a strategic move. Oman holds a geographically important position at the mouth of the Persian Gulf, near the Strait of Hormuz, one of the world’s busiest oil shipping lanes. Stronger ties with Oman could enhance India’s energy security and maritime influence in the region.
Oman, for its part, is looking to diversify its economy under its Vision 2040 strategy. The Gulf nation wants to reduce its reliance on oil revenues and attract foreign investment in sectors like manufacturing, logistics, renewable energy, and tourism. Closer economic ties with India—a major source of skilled labor, technology, and capital—could help Oman meet these goals.
The CEPA is also expected to include chapters on investment facilitation, digital trade, services, and dispute resolution. These elements go beyond traditional trade and show that both countries are looking at a broader and deeper economic partnership.
Political and Diplomatic Context
The timing of Minister Goyal’s visit is important. India has been actively building strong diplomatic relationships in the Gulf in recent years. After successfully signing the India-UAE CEPA in 2022, New Delhi has been working to secure similar pacts with other GCC members.
The India-Oman relationship has always been warm and cooperative. Over 700,000 Indians live and work in Oman, making them one of the largest expatriate communities in the country. Remittances, cultural exchanges, and shared interests in regional stability have kept the ties strong.
Goyal’s visit is seen as part of India’s broader push to expand its trade footprint in West Asia while countering China’s growing economic influence in the region.
What Happens Next?
The upcoming meetings in Muscat could decide whether the CEPA is finalized in the coming months. Indian officials have said that most issues are resolved, but a few critical matters remain open for negotiation. If the talks go well, a formal agreement could be signed later this year.
For Indian exporters, especially in sectors like garments, engineering goods, and pharmaceuticals, the deal could mean easier access to a high-value market with reduced costs. For Oman, the deal would signal stronger ties with one of Asia’s fastest-growing economies and a path toward economic diversification.
Conclusion
As Minister Goyal heads to Muscat, expectations are high that India and Oman will take a big step toward concluding the CEPA. This agreement could be a game-changer for both nations—unlocking new trade, investment, and strategic opportunities.
In a world where economic alliances are becoming just as important as military ones, the India-Oman CEPA stands as a symbol of mutual trust, economic ambition, and a shared vision for the future.
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