India–Oman Free Trade Agreement (FTA)

India–Oman Free Trade Agreement (FTA)

India and Oman signed a landmark Free Trade Agreement (FTA) on 18 December 2025 in Muscat, during the state visit of Prime Minister Narendra Modi. The agreement represents a major step in India’s trade diplomacy in the Gulf region and aims to establish a stable, predictable, and long-term framework for bilateral commercial engagement. Significantly, this is Oman’s first FTA with any country in nearly two decades, highlighting its strategic importance.

Negotiations formally began in November 2023 and concluded in August 2025. The agreement covers tariff liberalisation in goods, liberalisation of services, investment facilitation, dispute settlement mechanisms, and clearly defined rules of origin. A major economic outcome is that over US$3 billion worth of Indian exports will become tariff-free. At present, nearly 83.5% of Indian exports to Oman face a 5% tariff, which will now be eliminated or reduced, improving price competitiveness for Indian exporters.

Priority sectors under the FTA include textiles, automobiles, auto components, food processing, gems and jewellery, agrochemicals, renewable energy, and services. These sectors align with India’s manufacturing and export strengths while supporting Oman’s diversification agenda beyond hydrocarbons. Bilateral trade has shown strong momentum, increasing from US$8.95 billion in FY 2023–24 to US$10.61 billion in FY 2024–25, reflecting a mature and expanding economic partnership.