Piyush Goyal announces upcoming free trade agreement with Oman
Negotiations on India-Oman CEPA Close to Finalization, Reports Piyush Goyal
Commerce and Industry Minister Piyush Goyal indicated on Monday that the free trade agreement (CEPA) between India and Oman is on the brink of conclusion. “You can expect some encouraging news regarding the Oman FTA very soon,” Goyal told reporters when asked if the agreement could be finalized this year.
Recently, an official noted that consensus had been reached on the majority of the FTA’s components, except for the protection measures necessary for Indian firms against Oman’s frequently shifting Omanisation policy. This policy requires businesses to hire a specific proportion of local labor, which varies by industry and frequently changes. Companies that comply with these requirements benefit from government incentives, while those that fail to meet targets face penalties, including fines and restrictions on obtaining new work visas for foreign staff, as well as potential revocation of current permits.
India is advocating for the Omanisation targets to be maintained at current levels for Indian enterprises and for these stipulations to be included in the CEPA, the official stated. The CEPA negotiations commenced in November 2023 and reached completion in March 2024. Although the signing was anticipated prior to the 2024 general elections, ongoing discussions have delayed the process as new issues have emerged.
This CEPA is poised to surpass the agreement signed with the UAE regarding its scope and the liberalization it offers. Under this agreement, India will secure 98% market access for its goods in Oman, as well as significant advantages in the services sector. Oman’s import tariffs range from 0% to 100%, with specific duties on certain products; for example, a 100% duty is applied to specific meats, wines, and tobacco items.
To expedite the discussions surrounding this trade agreement, Minister Piyush Goyal traveled to Muscat in the last week of January. During his visit, he participated in the 11th Session of the India-Oman Joint Commission Meeting (JCM) and held discussions with senior leadership. Additionally, during this visit, both nations executed a protocol to amend the Double Taxation Avoidance Agreement (DTAA).
Oman holds the position of the third-largest export market for India within the Gulf Cooperation Council (GCC), with Indian exports reaching $443 billion in FY25 and imports surpassing $6.51 billion. Key exports from India to Oman include petroleum products, engineering items, minerals, and chemicals, while major imports comprise petroleum, fertilizers, chemicals, and plastics.
