Discussions for the proposed free trade agreement (FTA) between India and Oman are at an advanced stage and both sides hope to conclude the pact early, Indian Ambassador to Oman Amit Narang said on Tuesday.

The pact will give a significant push to bilateral trade and investment ties between the two countries, he said.

The pact, officially known as the Comprehensive Economic Partnership Agreement (CEPA), is expected to boost Indian exports to the west Asian country by eliminating duties, especially on petroleum products, textiles, electronics, pharmaceuticals, machinery, and iron and steel.

“Discussions for a bilateral CEPA with Oman are at an advanced stage. We hope to conclude these discussions early and once this is done, this will be a significant push to bilateral, not just trade, but also bilateral investment ties,” Narang said.

Addressing an event organised by Ficci here, the Indian Ambassador to Oman also highlighted the significant potential for enhancing direct shipping links between the two nations as a large part of Indian exports to Oman come not directly but through the UAE.

He said the India-Oman bilateral trade, which crossed USD 12 billion in 2022-23, has moderated and settled at USD 8 billion in FY24.

“Between 2021 and 2023 the bilateral trade between India and Oman more than doubled... We went from USD 5 billion to cross USD 12 billion.

“In the past financial year, the bilateral trade has moderated a little bit, it has settled to USD 8 billion... Moderation is mainly on account of over dominance of hydrocarbons in the bilateral trade,” Narang said.

“India imports a lot of oil and fertilisers from Oman and this decline in the value terms of the trade this year is a reflection of the decline in values of these two commodities globally,” Narang said.

He pointed out that a large part of Indian exports to Oman come not directly but through the UAE and these are not reflected in the India-Oman bilateral trade but in India’s trade with the UAE, adding that there is potential for enhancing direct shipping links.

“Currently, I understand that there are two shipping lines... There is therefore huge potential for direct shipping to reduce cost of bilateral trade and that will have a significant impact in further improving our bilateral trade figures,” Narang said.

Addressing the event virtually, Indian Ambassador to the UAE Sunjay Sudhir said India will soon upgrade its political engagement with the GCC (Gulf Cooperation Council) as a whole in the very near future.

The Gulf Cooperation Council (GCC) brings together six Arab countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.