India-Oman CEPA: Free Trade Deal between India and Oman, what is an FTA and its benefits?

India-Oman Free Trade Agreement: PM Modi is on a four-day visit to Jordan, Ethiopia, and Oman, starting Monday, December 15th. Today, he will visit Oman on the final leg of his visit.

India-Oman Free Trade Agreement: Prime Minister Narendra Modi has arrived in Oman. Today, he will meet with Sultan Haitham bin Tariq of Oman. It is reported that the two countries will sign a free trade agreement to promote economic relations.

PM Modi arrived in Ethiopia from Jordan on Tuesday and then proceeded to Oman via Addis Ababa. According to media reports, Commerce and Industry Minister Piyush Goyal has arrived in Muscat to sign the FTA. Commerce Secretary Rajesh Aggarwal is also expected to arrive in Oman. Discussions on a free trade agreement between India and Oman formally began in November 2023 and will now be completed this year.

Which sectors will see a boost?

This trade deal is expected to expand India's reach in the Middle East and benefit numerous sectors, from textiles to footwear, automobiles to gems and jewelry, renewable energy, and auto components. This will provide Indian exporters with a larger market for their goods, providing flexibility to the supply chain.

What is a Free Trade Agreement?

A Free Trade Agreement (FTA) is an agreement between two countries. Under this agreement, countries either reduce or eliminate import duties imposed on each other. In addition to taxes, quotas and licensing are also reduced to reduce trade barriers. FTAs ​​increase companies' access to new markets, make business cheaper, and increase trade, thereby boosting economic growth.

India has signed several FTAs ​​in the past few years, which are benefiting the country's farmers, traders, and exporters.

United Kingdom (2025) - A free trade agreement, called the Comprehensive Economic and Trade Agreement (CETA), was signed between India and the United Kingdom this year. Under this agreement, tariffs were reduced on more than 90 percent of traded goods, boosting bilateral trade.

EFTA (2024) - This is a significant trade agreement signed in March last year between India and the European Free Trade Association (EFTA), an organization of four European countries (Switzerland, Norway, Iceland, and Liechtenstein). This agreement was first negotiated in 2008. Negotiations stalled after 13 rounds of negotiations. Negotiations resumed with EFTA member countries in 2016. After 16 years and 21 rounds of negotiations, the deal was finally finalized.

UAE (2022) - On February 18, 2022, CEPA was signed between India and the United Arab Emirates (UAE). Under this, tariffs are being reduced on more than 90 percent of Indian exports, which is boosting the trade of gems and jewellery, textiles, leather and engineering goods.