According to a joint statement issued after Prime Minister Modi and Sultan Haitham bin Tarik’s meeting, the 'two leaders took note of discussions on exploring mechanisms to facilitate bilateral trade in local currencies'.
Credit: X/@narendramodi
New Delhi: India and Oman on Thursday signed an economic partnership agreement that seeks to eliminate tariffs on majority of goods, boost bilateral investments and ensure greater mobility of Indian workers in the Gulf nation.
This is the second free trade deal India has signed in the last six months after the one with the United Kingdom as Prime Minister Narendra Modi’s government rushes to diversify and leverage new partners amid strained economic relations with the United States following imposition of a steep 50% tariff by President Donald Trump’s administration.
“Today, we are taking a historic step forward in India-Oman relations, whose positive impact will be felt for decades to come. The Comprehensive Economic Partnership Agreement (CEPA) will energise our ties in the 21st century,” Modi, who is on a two-day official visit to Oman, said in a post on X.
“It will give new momentum to trade, investment and open new opportunities across different sectors,” Modi added.
As part of the CEPA deal, Oman has offered zero-duty access on 98.08% of its tariff lines, covering 99.38% of India’s exports to Oman, while India has agreed to eliminate tariffs on 77.79% of its products, which covers 94.81% of India’s imports from Oman by value.
Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry & Investment Promotion Qais bin Mohammed Al Yousef signed the agreement in Muscat in the presence of Modi and Oman’s Sultan Haitham bin Tarik.
According to a joint statement issued after Prime Minister Modi and Sultan Haitham bin Tarik’s meeting, the “two leaders took note of discussions on exploring mechanisms to facilitate bilateral trade in local currencies”.
For the National Democratic Alliance (NDA) government led by Modi, this marks the sixth such pact, while it is the first trade agreement signed during the tenure of commerce secretary Rajesh Agrawal.
India is also close to clinching a free trade deal with the 27-nation bloc European Union. In the Gulf region, this is the second such deal. India signed a similar deal with the United Arab Emirates (UAE) in 2022.
This is the first bilateral agreement that Oman has signed with any country since its pact with the United States of America in 2006.
The pact with Oman offers India clear strategic and supply-side gains. It is expected to improve market access for Indian exports, enhance regulatory cooperation, particularly in pharmaceuticals and reinforce energy security by stabilising supplies of crude oil, liquefied natural gas (LNG) and fertilisers.
The deal also promises 100% foreign direct investment by Indian companies in major services sectors in Oman through commercial presence.
“It unlocks nearly universal duty-free access for Indian goods in the Omani market, expands services commitments across key high-growth sectors, and ensures greater mobility for Indian professionals. The agreement reinforces India’s commitment to inclusive growth benefiting farmers, artisans, workers, and MSMEs while safeguarding core national interests,” said Goyal.
Oman is a key strategic partner of India in the Gulf region. It can serve as a gateway for Indian goods and services to the wider West Asia and Africa region. Nearly seven lakh Indian nationals reside in Oman, including Indian merchant families with a presence of over 200–300 years.
“Being the key gateway to the Middle East and Africa, the trade pact with Oman promises a lot of business opportunities, especially for MSMEs. The landmark agreement is expected to further strengthen Indian firms’ integration into the global supply chain,” said Pankaj Chadha, Chairman, Engineering Export Promotion Council of India.
Oman is India’s third-largest export destination in the Gulf region.