India Becomes Second Nation After US To Seal Bilateral Trade Treaty With Oman
India and Oman have signed a Comprehensive Economic Partnership Agreement on Thursday.
Published : December 19, 2025 at 5:22 PM IST
By Saurabh Shukla
New Delhi: The Commerce Ministry said that the Free Trade Agreement (FTA) with Oman will bring significant benefits especially for India’s services sector following the former's decision to allow 100 percent FDI for Indian companies. India has become the second country after the US to sign a bilateral trade treaty with Oman, aimed at deepening economic ties.
Key features include a Mutual Recognition Agreement on Halal certification to ease trade, growing cooperation in electronics with Oman as a regional export base and continued imports of petrochemical and energy products to strengthen India’s energy security.
In his first press conference post FTA, Commerce Minister Piyush Goyal said that our focus remains on FTAs with developed nations aiming not to compete but to complement their markets. He also pointed out that all of our FTAs have been with developed countries, reflecting a strategy aimed at enhancing country's global trade position. Adding that access to marble blocks from Oman will also be a significant benefit for us, Goyal highlighted the importance of this resource for the Indian construction and manufacturing sectors.
Commerce Minister also added that currently, around 7 lakh Indians are working in Oman and they are contributing approximately Rs 18,000 Cr in remittances to India. This strong presence of the Indian workforce in Oman underlines the deep rooted people to people ties between the two nations. Even if Oman changes its laws, it will not change the binding agreement of employment opportunities for Indians there, he added.
At the press conference Minister said that India and Oman are exploring deeper cooperation in new areas such as food processing and space technology under the Comprehensive Economic Partnership Agreement (CEPA). Goyal believe that the agreement would support Indian farmers and artisans while safeguarding the interests of MSMEs.
He added that Oman’s large land availability has generated strong interest among Indian companies, with discussions underway on major investments in green steel production. Indian manufacturers are also considering setting up battery manufacturing facilities in Oman, signalling expanding industrial collaboration between the two countries.
India Oman Trade
Trade ties between India and Oman have been strengthening steadily over the past few years. In FY 2024-25, bilateral trade crossed the 10 Billion US Dollar mark, rising sharply from the previous year and reflecting growing economic engagement between the two countries. The momentum continued in the first half of the current year with strong exchange of goods on both sides. India's exports to Oman saw a healthy rise, while imports, mainly energy related products, remained robust, underlining Oman's importance as a key trade partner.
Services trade has also seen clear growth. Indian companies have expanded their presence in Oman across areas such as telecom, IT, business services, transport and travel. Services imports from Oman have also increased gradually. This expanding trade relationship provided the foundation for the India-Oman CEPA talks, which began in late 2023 and culminated in the signing of the pact in December 2025, marking a new phase in bilateral economic cooperation.
According to a presentation shared by the Ministry, Oman has offered commercially meaningful market access and national treatment commitments in several services sectors of key interest to India. These include professional services such as legal, accounting, taxation, architecture, engineering and healthcare, computer and related services, audio visual services, other business and R&D services, education, environmental services, health services and tourism and travel related services.
States That Are Set To Benefit
The agreement is expected to generate significant export growth and employment gains across several states and regions. Rajasthan is likely to see higher exports of gemstones, jewellery, handicrafts, furniture and stone and marble products, particularly from centres such as Kishangarh. Uttar Pradesh stands to benefit from increased exports of brassware and metal handicrafts, leather footwear and saddlery from Kanpur and Agra, as well as carpets and home textiles from Bhadohi and Mirzapur.
Punjab is set to gain from export growth in hosiery, knitwear, sports goods and light engineering products. West Bengal is expected to strengthen its exports of leather goods and footwear, jewellery work, light engineering and castings along with diversified jute products. Kerala is likely to benefit through gains in tourism and real estate services, alongside higher exports of value-added spices from Idukki and coir products, including mats and geotextiles.
Andhra Pradesh is expected to see an expansion in exports of seafood and marine products from Visakhapatnam, agri food processing items and select engineering and electronics products.
Industry's View
On India-Oman CEPA Pankaj Chadha, Chairman, EEPC India believe that being the key gateway to the Middle East and Africa, the trade pact with Oman promises a lot of business opportunities especially for MSMEs. The landmark agreement is expected to further strengthen Indian firms' integration into the global supply chain.
Zero duty access on 2,123 engineering tariff lines is expected to boost the competitiveness of Indian engineering goods and help exporters expand in Oman. This measure is set to help exporters in industrial machinery, electrical equipment, auto parts, metals and other engineering products. Indian engineering export to Oman is projected to experience robust growth, potentially reaching around US$1.3 to US$1.6 billion by 2028, he added.
Federation of Indian Export Organisations (FIEO) said that the agreement facilitates 100 per cent FDI by Indian companies in major services sectors, introduces the first ever comprehensive commitment on traditional medicine, opening new avenues for India’s AYUSH and wellness sectors and provides important trade facilitation measures. These include faster pharmaceutical approvals, acceptance of global regulatory certifications, mutual recognition of Halal certification, acceptance of India’s NPOP certification for organic products and enhanced cooperation on standards and conformity assessment, helping address non tariff barriers.
