India-Oman Trade Agreement Likely to Be Approved Ahead of Modi's Visit

Post by : Mara Rahim

Sources indicate that the Union Cabinet is expected to evaluate the draft for a free trade agreement between India and Oman this Friday, with a potential approval before Prime Minister Narendra Modi's forthcoming visit to Oman next week. The Prime Minister's itinerary includes a three-nation tour of Oman, Jordan, and Ethiopia from December 15 to 18, with an announcement concerning the free trade pact anticipated in Muscat on December 17. However, the official unveiling hinges on the Cabinet's clearance this week.

While the Cabinet is slated to convene on Friday, insiders suggest that an immediate government statement may not be forthcoming owing to the delicacy surrounding such agreements. The Ministry of Commerce's year-end overview reiterated that discussions for the Comprehensive Economic Partnership Agreement (CEPA) commenced in November 2023. By March 2024, both nations had aligned on essential components of the pact, covering both textual details and market access. However, the Cabinet postponed the proposal in March, necessitating further dialogue.

Subsequent rounds of negotiations took place in September 2024 and January 2025, addressing revised proposals. Currently, the draft for Cabinet approval has been circulated among all ministries, while both countries pursue their requisite internal approvals. Earlier negotiations were nearing completion at the start of the year but faced delays due to last-minute concerns regarding petrochemical products and Omanisation policies, which focus on substituting foreign labor with qualified local workers.

India has requested Oman to preserve the existing Omanisation quotas applicable to Indian investors even after the free trade agreement is formalized, to prevent future restrictions. The discussions progressed significantly during Commerce Minister Piyush Goyal's visit to Muscat in January 2025.

Should the CEPA receive approval, it is projected to strengthen economic relationships, enhance bilateral commerce, and provide more enduring opportunities for Indian enterprises in Oman's emerging market.