India, Oman sign free trade agreement: What you need to know

India and Oman on Thursday signed a free trade agreement as Prime Minister Narendra Modi and Sultan Haitham bin Tarik reviewed the multi-faceted Strategic Partnership and reaffirmed their commitment to regional peace and stability.

Modi, who arrived in Oman on Wednesday on the last leg of his three-nation tour, was received by Sultan Haitham at Al Baraka Palace in Muscat. The visit included a one-on-one meeting between the two leaders, followed by delegation-level talks.

“Today, we are taking a historic step forward in India-Oman relations, whose positive impact will be felt for decades to come. The Comprehensive Economic Partnership Agreement (CEPA) will energise our ties in the 21st century,” Modi said, describing the pact as “a new and golden chapter” of bilateral cooperation.

He said the agreement would give new momentum to trade and investment and open opportunities across different sectors.

During the meeting, both leaders expressed satisfaction with the state of bilateral relations, which span trade, investment, defence, security, technology, education, energy, space, agriculture, culture and people-to-people ties.

In a joint statement issued after the talks, the two sides said they commended the deepening cooperation in the defence sector and agreed to continue working together, including through joint exercises, training and high-level visits, to contribute to regional security and stability.

The leaders also adopted a joint vision document on maritime cooperation, reflecting their shared commitment to regional maritime security, the blue economy and the sustainable use of ocean resources.

They condemned terrorism in all its forms and manifestations and reaffirmed that no justification could be accepted for such acts, while underlining the importance of continued cooperation in this area.

Both sides acknowledged the potential to expand trade in sectors including textiles, automobiles, chemicals, equipment and fertilisers.

The CEPA was signed by Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef. The agreement aims to increase trade by reducing barriers and providing a stable framework, while unlocking opportunities across major sectors, enhancing economic growth, creating jobs and boosting investment flows.

This is Oman’s second free trade agreement with an individual country and its first such pact in about 20 years.

“Both leaders acknowledged that CEPA shall be mutually beneficial to both countries, and they encouraged the private sector of both countries to benefit from this agreement,” the joint statement said.

India-Oman bilateral trade stood at about USD 10.5 billion in 2024-25, with exports of USD 4 billion and imports of USD 6.54 billion.

While expressing satisfaction over bilateral trade crossing USD 10 billion and two-way investment flows moving forward, Modi said the CEPA would significantly promote trade and investment, create jobs and open opportunities in both countries.

In recent years, India has signed several free trade agreements, including with the UK (2025), EFTA (2024), Australia (2022), the UAE (2022) and Mauritius (2021).

Modi said he also discussed ways to further strengthen trade and investment linkages. “Financial services also offer great scope for working together. We talked about how sectors like energy, critical minerals, agriculture, fertilisers and healthcare have rich potential for closer ties,” he said.

The leaders discussed enhancing cultural and people-to-people ties, including student exchange programmes, to strengthen youth engagement.

They also discussed giving new momentum to energy cooperation through long-term arrangements, renewable energy projects and green hydrogen and green ammonia initiatives, the Ministry of External Affairs said.

Modi appreciated Oman joining the International Solar Alliance and invited it to join the Coalition for Disaster Resilient Infrastructure and the Global Biofuel Alliance.

He said both countries could benefit from agricultural cooperation, including collaboration in agricultural science, animal husbandry, aquaculture and millet cultivation.

The leaders also discussed cooperation between UPI and Oman’s digital payment system, RuPay card adoption and trade in local currencies.

They noted that the completion of 70 years of diplomatic relations between India and Oman marked a significant milestone.

Several memorandums of understanding were signed in the fields of maritime heritage and museums, agriculture and allied sectors, and higher education. The two sides also agreed on an executive programme for cooperation in millet cultivation and agri-food innovation.

Modi thanked Sultan Haitham for ensuring the welfare of the Indian community of around 675,000 people residing in Oman. The leaders also discussed the shared cultural heritage of the two countries.

They welcomed the alignment between Oman Vision 2040 and India’s goal of becoming a developed nation, or Viksit Bharat, by 2047.

The leaders exchanged views on regional and global developments and reiterated their commitment to regional peace and stability. They expressed concern over the humanitarian situation in Gaza and called for the safe and timely delivery of humanitarian aid to civilians.

They welcomed the Gaza Peace Plan and reaffirmed support for efforts to restore peace and stability, underlining the need for a just and lasting resolution through dialogue and diplomacy, including the establishment of a sovereign and independent Palestinian state, the joint statement said.

During the visit, Sultan Haitham conferred the Order of Oman, the Sultanate’s civilian honour, on Modi for his “exceptional contribution” to India-Oman relations and his “visionary leadership”.

Modi earlier visited Ethiopia and Jordan as part of his three-nation tour. This is his second visit to Oman and coincides with the 70th anniversary of diplomatic relations between the two countries.

Oman is India’s third-largest export destination among Gulf Cooperation Council countries. India’s key imports from Oman include petroleum products and urea, which account for over 70 per cent of imports, along with propylene and ethylene polymers, pet coke, gypsum, chemicals, iron and steel, and unwrought aluminium.

India’s exports to Oman include mineral fuels, chemicals, precious metals, iron and steel, cereals, ships and boats, electrical machinery, boilers, tea, coffee, spices, apparel and food items.