NEW DELHI: The Union Cabinet on Friday may consider the draft proposal of the India-Oman free trade agreement, and is likely to approve the deal before Prime Minister Narendra Modi’s visit to the country next week, people aware of the development said.
The Prime Minister is expected to embark on a three-nation visit that may cover Oman, Jordan and Ethiopia on December 15-18 and an announcement of the FTA is likely on December 17 in Oman, they added requesting anonymity.
An announcement of the India-Oman Comprehensive Economic Partnership Agreement (CEPA) and its formalization would, however, depend on the Cabinet’s approval this week, they said.
The Cabinet is expected to meet on Friday, but the government may not comment on the bilateral deal immediately after because such agreements have their own nuances, they said.
In its year-end review statement released on Wednesday, the ministry of commerce and industry said negotiations for the India-Oman CEPA were launched in November 2023. After three rounds of intensive negotiations between November 2023 and March 2024, both sides did reach an agreement on all CEPA components, including text and market access offers. But, in March 2024, the Cabinet proposal was deferred, prompting further renegotiations.
“The 4th round (September 2024) and 5th round (January 13-14, 2025) focused on revised offers. Following approval of the competent authority, the Draft Cabinet Note for signing and ratification was circulated to relevant Ministries. Both sides are now in the process of securing internal approvals,” the statement said.
Negotiations between India and the Sultanate of Oman were almost over in early 2024, but the deal could not be signed because of last minute disagreements over certain issues related to goods such as petrochemicals. Another matter of concern was “Omanisation” of Indian investments in the country. The talks, however, received fresh impetus during Union commerce minister Piyush Goyal’s Muscat visit on January 27-28, 2025.
The basic principle of the Omanisation programme is to replace expatriates with trained local personnel. It mandates a sector-specific percentage or quota, which is often revised. India wants the sector-specific percentage existing currently to be unchanged under the proposed CEPA for Indian investors, so that it does not become more restrictive in the future after the FTA is finalised, the people explained.
