India, Oman sign free trade agreement:Zero-duty access for 98% of Indian exports, wider market access for traditional medicines

India and Oman on Thursday signed a Free Trade Agreement (FTA), granting duty-free access to 98% of Indian exports, while the Gulf nation will enjoy liberalised tariffs on up to 78% of products, including dates, marbles and petrochemicals. The Comprehensive Economic Partnership Agreement (CEPA), which has been under negotiation since November 2023, was signed by Union Commerce and Industry Minister Piyush Goyal and his Omani counterpart Qais Al Yousef in the presence of Modi and Oman’s Prime Minister Sultan Haitham bin Tariq Al Said. The agreement aims to significantly cut or remove tariffs across a broad spectrum of products, while also opening up services markets and encouraging greater investment. Oman is seeking greater access to India’s large consumer market, while India aims to improve export access and strengthen cooperation in energy, services, and other strategic sectors. Commenting on the FTA signing, PM Modi said the CEPA will inject “new confidence and energy” into their partnership in the 21st century, noting that over the past 11 years, “India has not just changed its policies, the country has transformed its economic DNA.” He also met with business leaders from both countries to discuss deeper economic collaboration ahead of the CEPA signing. Commerce Minister Goyal described the moment as a milestone for the bilateral partnership, noting that trade has already crossed $10 billion. “But that’s just the beginning. We must focus on a more diversified trade partnership,” he said. In 2024-25, bilateral trade between the two countries reached around $10.5 billion. According to the Global Trade Research Initiative (GTRI), “The agreement broadly follows India’s UAE FTA template and aims to ease regulatory barriers, including potential fast-track approvals for Indian pharmaceuticals.” However, India’s main gains from the agreement are expected in merchandise exports, it notes. CEPA impact: · Most items already at low tariffs · Agreement likely to strengthen existing supply chains, not radically change trade flows Although more than 80% of Indian goods already enter Oman at an average tariff of around 5%, some products still face duties of up to 100%. GTRI says CEPA-led tariff removal should improve the competitiveness of Indian industrial exports, though longer-term gains will depend on quality enhancement and product differentiation in Oman’s small market. In services, India is expected to push for faster pharmaceutical approvals aligned with global regulators, as in its UAE agreement. Despite limits from Oman’s modest market size, GTRI highlights the pact’s strategic value, pointing to over 6,000 joint ventures and more than $7.5 billion in Indian investments, especially in the Sohar and Salalah free zones. PM Modi’s Muscat Visit to Deepen India-Oman Ties Highlighting India’s economic growth and its benefits for partners, PM Modi said, “India’s nature has always been progressive and self-driven. When India grows, it helps its friends grow too. Today, India is on track to become the world’s third-largest economy, which benefits the whole world—and even more so Oman, as close friends and maritime neighbours.” He also emphasised the long-standing trust in commercial ties, noting that generations of business engagement have given both sides a deep understanding of each other’s markets. The Indian PM arrived in Muscat on Wednesday for the last leg of his 4-day trip to Jordan, Ethiopia and Oman, accompanied by Commerce Minister Goyal and a high-level delegation comprising government officials and business leaders. During his visit to Muscat, Modi held talks with Haitham bin Tarik, and interacted with the Indian diaspora and students. Goyal said the FTA offers “immense opportunities” for Indian goods, particularly with “Oman opening the doors as a gateway to the Gulf Cooperation Council (GCC) region, eastern Europe, central Asia, and Africa”. He identified four areas for India-Oman cooperation: clean energy (renewables, battery storage, and green hydrogen); infrastructure, multimodal logistics, and export warehouses; food security, including developing Oman as a regional hub with food parks; and startup ecosystems, particularly in deep tech, logistics software, and artificial intelligence. Real Value Goes Beyond Tariffs “Given the small size of bilateral trade, its real value goes beyond tariffs: it strengthens India’s economic and geopolitical presence at the mouth of the Gulf, deepens Indian firms’ role in Omani logistics and supply chains, and supports India’s wider strategy on energy, services and regional connectivity. The agreement is therefore less a trade breakthrough than a strategic consolidation—locking in market access, mobility and influence in a critical maritime and energy corridor,” says GTRI founder Ajay Srivastava. ​