In a landmark move to deepen economic integration, Prime Minister Narendra Modi's visit to Muscat has resulted in the signing of a pivotal Comprehensive Economic Partnership Agreement (CEPA) between India and Oman. The agreement was finalized on Thursday, marking a significant milestone in bilateral relations.
A Strategic Culmination of Bilateral Talks
Prime Minister Modi arrived in Oman on Wednesday as part of his three-nation tour, which included prior stops in Jordan and Ethiopia. The CEPA negotiations, which formally commenced in November 2023, were successfully concluded earlier this year, setting the stage for this high-profile signing during the PM's visit.
Union Commerce and Industry Minister Piyush Goyal, who was present in Muscat for the ceremony, highlighted the concerted efforts behind the pact. He noted that this is Oman's first free trade agreement in nearly two decades, with its last similar pact being with the United States back in January 2006.
Unlocking New Avenues for Trade and Investment
The CEPA is designed to substantially reduce or eliminate customs duties on a vast majority of goods traded between the two nations. It also aims to simplify regulations to enhance trade in services and attract greater foreign investment.
Addressing the Oman-India Business Forum, Minister Goyal outlined the expansive opportunities the FTA presents. He identified sectors with high growth potential, including:
- Textiles and Footwear
- Automotive and Auto Components
- Gems and Jewellery
- Agrochemicals and Renewable Energy
Collaboration in services such as chartered accountancy, research & development, tourism, healthcare, and education is also a key focus. Energy transition, infrastructure development, food security, and startups have been earmarked as four prominent areas for joint ventures.
The Robust Foundation of India-Oman Economic Ties
The CEPA builds upon a strong existing trade relationship. In the fiscal year 2024-25, bilateral trade between India and Oman stood at US$ 10.61 billion. Oman is India's third-largest export destination among the Gulf Cooperation Council (GCC) nations.
India holds the position of Oman's fourth-largest source of non-oil imports and its third-largest market for non-oil exports. The trade basket is diverse:
Key Indian exports to Oman include light oil, aluminium oxide, rice, boilers, machinery, electrical machinery, and aircraft components.
Major imports from Oman to India comprise crude petroleum, liquefied natural gas (LNG), urea, organic chemicals, ammonia, and plastics.
The economic partnership is further solidified by over 6,000 India-Oman joint ventures operating in Oman. These ventures represent a total capital investment of approximately US$ 7.5 billion over the years, including formal outward direct investment of US$ 675 million from India.
The signing of the CEPA under Prime Minister Modi's leadership is poised to transform this already substantial economic corridor, unlocking new potentials for growth, investment, and strategic cooperation in the wider region.
