PM Modi, Sultan Tarik sign India-Oman FTA in Muscat

Prime Minister Narendra Modi and Omani Sultan Haitham bin Tarik signed the India-Oman free trade agreement in Muscat on Thursday, December 18.

PM Modi reached Oman on Wednesday, December 17, for the last leg of his three-country four-day foreign visit.

Both the countries signed the Comprehensive Economic Partnership Agreement (CEPA) in Muscat after a bilateral meeting between the PM and the Omani Sultan.

Earlier in the day, PM Modi also attended a business forum in Muscat, and interacted with the Indian diaspora and students.

PM Narendra Modi tweets, “Grateful for the warm welcome in Oman. The affection and enthusiasm of the Indian community here truly reflect the enduring people-to-people bonds between India and Oman.” pic.twitter.com/MwcUMizOBj

— ANI (@ANI) December 17, 2025

Under the agreement, India’s exports worth $3 billion is likely to become tariff free. Export opportunities in various sectors such as textiles, food processing, automobiles, gems and jewelry, agrochemicals, and renewable energy, will be opened, CNBC-TV18 has learnt.

The bilateral trade between India and Oman stood at $10.6 bn in financial year 2025, with a trade deficit of $2.48 billion. The total FDI equity inflow from Oman has been $605 million in last 25 years.

India is Oman’s fourth largest source of non oil imports & third largest market for non oil exports. India exports light oils, aluminum oxide, rice, boilers, machinery, aircraft components, personal care products, plastics, iron & steel, and ceramics to the gulf nation, while it imports crude oil, LNG, urea, chemicals, ammonia, sulphur, iron ore and construction material.

About 80% of the Indian goods currently face a tariff of 5% in Oman, while select products such as meat, alcohol, and tobacco attract duties up to 100%.

The agreement marks a major step in deepening India’s economic engagement with the Gulf region. This is Oman’s second FTA with an individual country and the first FTA they signed in about 20 years.

India has recently signed many trade agreements with various countries such as the United Kingdom, EFTA, Australia, UAE, and Mauritius among others.

The India-Oman agreement is expected to enhance market access, promote investments and strengthen supply chain resilience at the time of global economic realignment.