Union Cabinet expected to consider India-Oman FTA on December 12: Govt sources

Government sources have told CNBC-TV18 that that the proposed India-Oman Free Trade Agreement (FTA) is expected to be taken up for discussion by the Union Cabinet on December 12, though an official announcement may take time due to procedural formalities.

Oman's democratically elected lower house, Shura Council had approved the proposed Comprehensive Economic Partnership Agreement (CEPA) on 10th December after concluding deliberations. Negotiations for the trade pact, which begun in 2023, had concluded earlier this year, which is being followed by both the sides securing approvals within their governments.

On 10th December, India's Commerce Ministry had said that the draft cabinet note for signing and ratification had been circulated to relevant ministries. India-Oman bilateral goods trade was about $10.5 billion in FY25, with petroleum products and urea accounting for over 70% of India’s imports from Oman.

Prime Minister Narendra Modi is expected to visit Jordan, Ethiopia, and Oman this month. His visit to Oman on December 17th and 18th will be his second as the Prime Minister and will mark 70 years of the establishment of diplomatic relations between the two countries. It follows the State visit of the Sultan of Oman to India in December 2023.

A government release indicated that this visit will be an opportunity for both sides to comprehensively review the bilateral partnership, including in the areas of trade, investment, energy, defence, security, technology, agriculture and culture as well as exchange views on regional and global issues of mutual interest.

Bilateral trade between India and Oman had declined from $12.39 billion in FY 2022-23 to $8.94 billion in FY 2023-24. India's merchandise imports from Oman had dropped to $4.52 billion in FY 2023-24, from $7.9 billion in FY 2022-23.

While petroleum products and urea comprise of 70% of India's imports from Oman, other products include ethylene and propylene polymers, pet coke, chemicals, gypsum, and iron and steel. India's exports to Oman had risen from $2.25 billion in FY 2018-19 to $4.42 billion in FY 2023-24.

Oman is the 3rd largest export destination among the GCC (Gulf Cooperation Council) countries for Indian goods & services, with 80% of Indian products currently attracting 5% import duty in Oman.

When signed, an FTA with Oman would the second such agreement India has with a GCC country, after its trade deal with the UAE came into effect in May 2022.