India-Oman Free Trade Pact Approved Ahead of Prime Minister Modi's Visit

Union Cabinet Greenlights India-Oman CEPA

The Union Cabinet of India, chaired by Prime Minister Narendra Modi, officially approved a Comprehensive Economic Partnership Agreement (CEPA) with Oman on Friday, December 12, 2025. This significant development precedes Prime Minister Modi's upcoming visit to the Gulf nation, where the pact is expected to be formally signed. The approval by India's Cabinet follows a similar endorsement by Oman's Shura Council a day prior, signaling mutual commitment to deepening economic ties.

Boosting Bilateral Trade and Investment

The primary objective of the CEPA is to significantly enhance trade and investment flows between India and Oman. Negotiations for this free trade agreement commenced in November 2023 and concluded in 2025. The agreement aims to achieve several key goals:

• Eliminate or significantly reduce customs duties and para-tariffs on a maximum number of goods traded between the two countries.
• Simplify regulatory procedures to facilitate smoother trade.
• Foster a freer flow of services and investments, creating a more favorable business environment.

Bilateral trade between India and Oman has shown robust growth, reaching US$ 8.947 billion in FY 2023-2024 and further increasing to US$ 10.613 billion in FY 2024-2025. Oman currently stands as India's 28th largest trading partner, while India is the third-largest export destination for Oman among the Gulf Cooperation Council (GCC) countries. Key Indian imports from Oman include petroleum products and urea, which constitute over 70% of total imports, alongside propylene, ethylene polymers, and pet coke. India's exports to Oman encompass a diverse range of products such as light oils, aluminum oxide, rice, machinery, and electrical equipment.

Strategic Implications and Prime Minister Modi's Visit

The signing of the CEPA is anticipated to take place during Prime Minister Modi's visit to Oman from December 17-18, 2025. This visit is the final leg of a three-nation tour that also includes Jordan and Ethiopia, scheduled from December 15-18. It marks Prime Minister Modi's second visit to Oman and coincides with the 70th anniversary of diplomatic relations between the two nations, which were formalized in 1955 and elevated to a Strategic Partnership in 2008. The agreement is expected to grant India access to 98% of its products in the Omani market and provide significant opportunities in the services sector.

Long-Standing Partnership and Future Prospects

The approval of the CEPA underscores the enduring and multifaceted strategic partnership between India and Oman. Beyond trade, the two nations share strong investment ties, with over 6,000 India-Oman joint ventures operating in Oman, representing estimated investments exceeding US$776 million. Furthermore, cumulative Foreign Direct Investment (FDI) equity inflow from Oman to India from April 2000 to March 2025 amounted to US$605.57 million. This agreement is poised to further solidify India's economic footprint in West Asia and Africa, fostering sustained economic growth and shared prosperity for both nations.