Commerce and Industry Minister Piyush Goyal has indicated that India may soon announce a significant breakthrough in its ongoing Free Trade Agreement (FTA) negotiations with Oman. Speaking to reporters during his visit to France, Goyal said, “You will see some good news very soon on the Oman FTA,” hinting at a near-finalisation of the Comprehensive Economic Partnership Agreement (CEPA).

Background of CEPA Negotiations

The CEPA between India and Oman was formally initiated in November 2023. The negotiations gained momentum after Piyush Goyal’s visit to Muscat in January 2025, where both sides agreed to expedite the process. The proposed FTA is aimed at reducing or eliminating customs duties, easing non-tariff barriers, and creating an environment conducive for trade in goods and services.

What Does CEPA with Oman Mean for India?

A CEPA is a high-standard agreement that typically goes beyond traditional FTAs by encompassing investments, services, and intellectual property rights. For India, a CEPA with Oman holds several strategic advantages:

• Access to a key Gulf market: Oman is India’s third-largest export destination in the Gulf Cooperation Council (GCC) region.

• Boost to manufacturing and service exports: The agreement is expected to boost India’s competitiveness, helping Indian exporters gain better access to Omani markets.

• Strengthened supply chain ecosystem: Goyal mentioned that such agreements also bring predictability and confidence to businesses on both sides.

Bilateral Trade Snapshot

In FY 2024-25, the bilateral trade between India and Oman stood at approximately USD 10.5 billion, with exports from India valued at USD 4 billion and imports at USD 6.54 billion.

Key Indian Exports to Oman Include:

• Machinery

• Textiles and garments

• Chemicals

• Food and agricultural products

India’s Major Imports from Oman:

• Petroleum products

• Urea

• Polymers like propylene and ethylene

• Gypsum

• Other chemical intermediates and iron and steel products

These imports — especially energy and fertilizer inputs — play a critical role in India’s domestic manufacturing and agriculture sectors.

Comparisons to the UAE Agreement

India already has a CEPA in place with United Arab Emirates (UAE) — another key GCC partner — which came into effect in May 2022. That agreement has been widely credited with boosting bilateral trade and investments, especially in sectors like gems and jewellery, electronics, and agriculture.

A similar impact is expected from the CEPA with Oman, given the strong historical, cultural, and economic ties between the two countries.

Minister's Insights: FTAs and Domestic Policy

When asked whether domestic reforms would be driven by FTA developments, Goyal clarified that FTAs are independent mechanisms, meant to open markets and not directly linked to internal policy changes.

“These agreements are more towards opening markets on both sides which lead to greater competitiveness, improved productivity, and efficiency in all processes,” he stated.

He also spoke about the National Manufacturing Mission, announced in the latest Union Budget, which is expected to roll out soon. This mission is aimed at ensuring state-Centre coordination in building a robust manufacturing base in India.

India’s Broader Trade Strategy

India’s trade policy has been undergoing a shift in recent years, with more focus on bilateral FTAs and regional trade partnerships. Besides Oman and UAE, India is also negotiating similar agreements with countries like UK, Australia, Canada, and the European Union.

These agreements are not just about tariff reductions; they also focus on:

• Rules of origin

• Investment facilitation

• Technology transfer

• Labour and environment standards

• Digital economy provisions

For example, India's FTA with Australia under the Economic Cooperation and Trade Agreement (ECTA) helped streamline trade in pharmaceuticals, education, and minerals. A similar diversified benefit is expected from the India-Oman CEPA.

Strategic Importance of Oman for India

Oman’s strategic geographic location at the mouth of the Persian Gulf gives it enormous maritime significance. For India, this has logistical and strategic importance, especially for:

• Energy shipping lanes

• Security collaborations

• Food and commodity storage hubs

Oman is also among the few Gulf nations with whom India shares a long-standing defence and maritime relationship. These deeper relations create a solid foundation for building a robust economic partnership under CEPA.

Opportunities Ahead Post-CEPA

Once the CEPA is finalised, several sectors are expected to benefit:

• MSMEs: Improved market access and reduced compliance costs.

• Startups and fintechs: Oman’s stable regulatory environment will attract tech-based exports.

• Agricultural exports: Oman imports significant amounts of rice, spices, vegetables, and processed foods from India.

• Healthcare and education services: India can tap into Oman’s growing demand for affordable and quality services.

Challenges in the Negotiation Process

While the progress has been fast-tracked, challenges remain:

• Harmonising product standards and certifications

• Aligning on data protection and digital services

• Addressing visa liberalisation for service professionals

However, given the momentum from both sides and the minister’s optimistic outlook, these hurdles are likely to be resolved soon.

Conclusion: India-Oman CEPA Could Be a Game-Changer

The likely conclusion of the India-Oman FTA in the near term, as suggested by Minister Piyush Goyal, is expected to significantly enhance trade relations between the two nations. With bilateral trade already at USD 10.5 billion, and sectors like energy, chemicals, agriculture, and technology involved, the CEPA will serve as a key driver of growth and stability.

As India pursues its goal of becoming a $5 trillion economy, such FTAs — especially with strategically located and resource-rich countries like Oman — will play a crucial role in diversifying markets, attracting investments, and strengthening global supply chains.

The Upcoming IPOs in this week and coming weeks are Ganga Bath Fittings, Victory Electric Vehicles International, Wagons Learning.

The Current active IPO are 3B Films

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.