India–Oman FTA ready for signing, New Zealand deal nears, EU talks narrow gaps

While the commerce secretary said it remains to be seen how many FTAs can be concluded next year, he expects significant progress across several negotiations, with multiple agreements likely to be wrapped up.

India has concluded negotiations for a free trade agreement (FTA) with Oman and is poised to sign the pact soon, with the agreement likely to be inked during an upcoming visit by Prime Minister Narendra Modi, a government official said.

Modi embarked on a four-day visit to Jordan, Ethiopia, and Oman on December 15. During the final leg of his visit, at the invitation of Sultan Haitham bin Tarik, Prime Minister Modi will visit the Sultanate of Oman from December 17 to 18, 2025. This will be his second visit to the Gulf nation.

Separately, commerce Secretary Rajesh Agrawal on December 15 said that India is currently engaged in multiple FTA negotiations, including with the US, Canada, the European Union, Peru and Chile, while talks with New Zealand are in their final stages. Negotiations with Qatar and Isreal are set to begin as well.

India has also signed terms of reference (ToR) with the Maldives for a trade deal and the ASEAN FTA review is ongoing, Agrawal added.

In addition, Agrawal said there have been discussions on reviving talks with the Southern African Customs Union (SACU), an issue that was raised during recent G20 engagements with Commerce Minister Piyush Goyal.

The most recent G20 Leaders’ Summit was held in Rio de Janeiro, Brazil.

While the commerce secretary said it remains to be seen how many FTAs can be concluded next year, he expects significant progress across several negotiations, with multiple agreements likely to be wrapped up.

India is also currently in talks with the Russia-led Eurasian Economic Union (EAEU) with the next round of talks likely in February of next year, the Commerce Ministry said, adding that the next round of India–Australia CEPA negotiations is proposed for January, 2026.

On the trade deal between India and the EU, chief negotiator Darpan Jain said, “a lot of progress have happened in different chapters of, target now is to narrow down the differences and achieve good progress in the coming days.”

Agrawal added that Carbon Border Adjustment Mechanism (CBAM) is definitely an issue on the table in discussions with the EU.

The EU introduced CBAM on October 1, 2023, a duty that will translate into a 20-35 percent tax on select imports starting January 1, 2026 with an aim to reach net-zero greenhouse emissions by 2050.

While the sectors covered under CBAM include cement, iron and steel, aluminium, fertilisers, electricity and hydrogen, India's iron and steel, aluminium and cement industries are expected to be hit the hardest by the EU's carbon tax.

In February 2025, India and the EU decided to ramp up talks for the proposed FTA, targeting to close it by the end of 2025 to tide over ongoing disruptions from volatile trade policies.

So far, 14 formal rounds of negotiations have been held, followed by ministerial interactions and technical consultations as recently as early December, as both sides work to resolve outstanding issues.

Agrawal added there has been growing engagement on FTAs not just in India but globally, with a positive climate in which countries are working out bilateral mechanisms to achieve better economic integration.