With Oman's lower house, the Shura Council, approving the free trade agreement with India, the Union Cabinet is expected to take up the pact for its consideration here on Friday, sources said.
The talks for the agreement, officially termed as CEPA (Comprehensive Economic Partnership Agreement), formally began in November 2023. The negotiations concluded this year.
In such an agreement, two trading partners either significantly reduce or eliminate customs duties on a maximum number of goods traded between them. They also ease norms to promote trade in services and attract investments.
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 commerce ministry on Wednesday stated that following approval of the competent authority, the Draft Cabinet Note for signing and ratification was circulated to relevant Ministries. Both sides are now in the process of securing internal approvals.
In India, FTAs are cleared by the Union Cabinet.
The Shura Council or Majlis A'Shura on Wednesday concluded its deliberations on the draft CEPA. At the conclusion of the deliberations, the Council approved the agreement. The Consultative Council is the democratically elected lower house of Oman.
Sources said that the Union cabinet is likely to take up the pact for its consideration at its meeting here on Friday.
Prime Minister Narendra Modi is expected to visit Jordan, Ethiopia, and Oman this month.
India-Oman bilateral trade was about $10.5 billion (exports $4 billion and imports $6.54 billion) in 2024-25. India's key imports are petroleum products and urea. These account for over 70 per cent of imports. Other key products are propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.
According to a report by think tank GTRI, Indian goods such as gasoline, iron and steel, electronics, and machinery will get a significant boost in Oman, once both sides reach an agreement. These goods at present face a 5 per cent import duty in Oman.
About 16.5 per cent of Indian exports to Oman, worth about $800 million and goods that already have duty-free access, the report has said. These items include wheat, basmati rice, fruits, vegetables, medicines, fish, tea, and coffee.
Further, India's services exports are also expected to gain from the pact.
With a population of 1.4 billion compared to Oman's over 5 million, India represents a vast consumer market for Oman.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
