India and Oman are close to finalising their long-discussed Comprehensive Economic Partnership Agreement (CEPA), with the pact expected to be signed during Prime Minister Narendra Modi’s proposed visit to Muscat on December 17–18, according to sources familiar with the negotiations.
Key sticking points — including Oman’s mandatory localisation policy, known as Omanisation, and India’s concerns over possible misuse of the treaty by China through third-country routing — have largely been resolved. “The agreement is almost ready for signature,” a source tracking the talks confirmed.
Ajay Sahai, Director General & CEO of FIEO, said the proposed FTA would substantially enhance India’s export competitiveness. “We expect the India–Oman FTA to significantly boost India’s exports by providing better market access and tariff advantages for key sectors such as engineering goods, electronics, textiles and pharmaceuticals. This will deepen bilateral trade and investment ties, especially benefiting MSMEs, while ensuring safeguards for sensitive domestic industries,” he noted.
Safeguards on Omanisation, Rules of Origin
India has been seeking clarity and protection regarding Oman’s Omanisation policy, under which the government mandates employment quotas for Omani nationals across private sector industries. New Delhi has pushed for these quotas to be capped under the agreement to avoid future escalation that could affect Indian workers and service exporters.
Simultaneously, India has worked to ensure stringent Rules of Origin (ROO) to prevent third-country products — particularly from China — from being routed into India through Oman and availing duty concessions.
Strategic Significance for India
The CEPA holds strategic value, potentially enhancing India’s access to the Gulf and broader West Asian markets as part of its ongoing market diversification strategy.
Bilateral trade between India and Oman stood at $10.6 billion in FY25, making Oman India’s third-largest trading partner in the Gulf region.
PM Modi’s Regional Tour
Before arriving in Oman, PM Modi is also expected to visit Jordan (December 15–16) and Ethiopia (December 16–17) as part of a broader diplomatic outreach to West Asia and Africa.