The ongoing negotiations between India and Oman regarding a Free Trade Agreement (FTA) have seen significant progress, with both countries aiming to boost their economic ties. This development comes as the two nations look to conclude the India-Oman Comprehensive Economic Partnership Agreement (CEPA) as soon as possible. The formal commencement of the CEPA negotiations occurred on November 20, 2023, with subsequent rounds of discussions in New Delhi and Muscat. These negotiations have been fast-tracked, reflecting the commitment of both countries to strengthen their economic relationship.
A notable aspect of this evolving partnership is the significant increase in bilateral trade, which surged from $5.01 billion in the Indian financial year 2018-19 to $12.39 billion in 2022-23. Additionally, the third tranche of the Oman-India Joint Investment Fund has been announced, amounting to $300 million. This fund is a joint venture between the State Bank of India and the Oman Investment Authority, aimed at bolstering economic ties through investments in key sectors of the Indian economy.
Furthermore, discussions are underway about adopting India’s Unified Payments Interface (UPI) stack and exploring the potential for rupee trade between the two countries. This element of cooperation is still in the exploratory stage but is seen as a significant component of the countries’ future economic interactions.
The agreement is expected to benefit a wide range of sectors, including petroleum, steel, electronics, and textiles in India, and sectors like oil and gas, petrochemicals, and certain manufactured goods in Oman. Both nations have expressed their commitment to conclude the agreement promptly, with two rounds of talks already concluded and significant portions of the CEPA text agreed upon.
In terms of the broader strategic partnership, defense cooperation has emerged as a key pillar, with India being among Oman’s top trading partners. The agreement is likely to reduce import duties and enhance market accessibility for products from both countries.