India, Oman to sign free trade pact during PM Modi’s visit on Dec 18; Key sectors that stand to gain

India and Oman will sign a free trade agreement on Thursday, December 18, in Muscat with an aim to boost economic ties between the two countries, an official said.

The pact will be signed in the presence of Prime Minister Narendra Modi, who is on a four-day, three-nation visit. Modi arrived in Ethiopia on Tuesday from Jordan and will depart for Oman from Addis Ababa.

The Prime Minister will visit the Sultanate of Oman from December 17 to 18, marking his second visit to the Gulf nation.

India and Oman share an all-encompassing Strategic Partnership underpinned by centuries-old bonds of friendship, trade linkages and strong people-to-people ties, according to an official readout.

The visit will also mark 70 years of the establishment of diplomatic relations between the two countries and follows the State visit of His Majesty the Sultan of Oman to India in December 2023.

“This visit will be an opportunity for both sides to comprehensively review the bilateral partnership, including in the areas of trade, investment, energy, defence, security, technology, agriculture and culture, as well as exchange views on regional and global issues of mutual interest,” the release said.

Commerce and Industry Minister Piyush Goyal has reached Muscat for the signing of the agreement, while Commerce Secretary Rajesh Agrawal is also scheduled to reach Oman, the official said.

The free trade agreement, officially termed the Comprehensive Economic Partnership Agreement (CEPA), aims to significantly reduce or eliminate customs duties on a wide range of goods, ease norms for trade in services and promote bilateral investments.

Formal negotiations for the CEPA began in November 2023 and concluded earlier this year.

Oman is the third-largest export destination for India among the Gulf Cooperation Council (GCC) countries. India already has a similar agreement with another GCC member, the UAE, which came into effect in May 2022. The other GCC members are Bahrain, Kuwait, Saudi Arabia and Qatar.

India and Qatar are also expected to begin talks for a trade pact soon.

Key sectors that stand to gain

India-Oman bilateral trade stood at about USD 10.5 billion in 2024-25, with exports worth USD 4 billion and imports at USD 6.54 billion.

India’s key imports from Oman include petroleum products and urea, which together account for over 70% of inbound shipments. Other imports include propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.

India’s exports to Oman include mineral fuels, chemicals, precious metals, iron and steel, cereals, ships and boats, electrical machinery, boilers, tea, coffee, spices, apparel and food items.