India set to sign FTA with Oman in first 100 days of Modi’s third term

June 14 (Hindustan Times) - India is set to sign a free trade agreement (FTA) with Oman in the first 100 days of the third term of Prime Minister Narendra Modi, who on Tuesday said that strategic ties between the two countries are destined to scale new heights and the matter figured in commerce minister Piyush Goyal’s review meeting.

Two officials aware of the matter said negotiations between India and the Sultanate of Oman were almost over during Modi’s previous term. However, the FTA deal could not be signed with the enforcement of the model code of conduct on March 16 following the announcement of dates for the Lok Sabha polls. The officials, who requested anonymity, said the deal is likely to be concluded soon. “The India-Oman FTA is almost finalised, awaiting [formal] political nod from both sides,” one of the officials said.

Days before the elections, India on March 10 signed an FTA with a group of four European countries—Iceland, Liechtenstein, Norway, and Switzerland. The four countries committed to invest $100 billion in India to create one million direct jobs over 15 years.

Indian and Omani Officials have prepared the required draft documents and it is a work in progress, the second official said and added the Oman ruler spoke to the Prime Minister congratulating him for his third term.

“Thank His Majesty Sultan Haitham bin Tarik of the Sultanate of Oman for his call and deeply appreciate his warm felicitations and words of friendship. The centuries-old India-Oman strategic ties are destined to scale new heights,” Modi said in a post on X on Tuesday.

When signed, the FTA with Oman will be the first important bilateral deal of Modi’s third term and the fourth since 2022. India signed an FTA with the United Arab Emirates on February 18, 2022, followed by another deal with Australia on April 2 of that year. India is negotiating FTAs with the United Kingdom, Peru, and the European Union.

The proposed deal with Oman is expected to help India in its energy security and ensure a cheaper supply of fertilisers, besides boosting foreign investments, the second official said. It will help reduce prices of Indian imports to Oman such as rice, tea, coffee, spices, dairy produce, meat, apparel, steel products, and machinery, he said.

The FTA talks got a boost after bin Tarik and Modi met in New Delhi on December 16, 2023. The proposed FTA—Comprehensive Economic Partnership Agreement (CEPA)—figured prominently in the discussions between the two leaders.

The second official said the proposed CEPA will boost both trade and investments. On the sidelines of the Sultan’s state visit in mid-December, Goyal and Oman’s trade minister Qais Bin Mohammed Al Yousef held discussions on bilateral trade and investment relations. The ministers decided to create an Oman desk in Invest India to boost investments and an India desk in Invest Oman.

India and Oman share a longstanding cooperation built on people-to-people ties dating back centuries. The two countries are strategic partners. They have had bilateral trade and investment relationships since diplomatic relations were established in 1955.

According to commerce ministry data, bilateral merchandise trade between both countries grew by 82.64% on an annualised basis in 2021-2022 to reach $9.99 billion. It rose to $12.39 billion in 2022-2023. In FY23, India exported goods worth $4.48 billion to Oman and imported merchandise worth over $7.9 billion.