The talks on India-Oman free trade agreement have reached the final stages with both countries now engaged in sorting out a few remaining demands by New Delhi for safeguards from the frequent changes in the “Omanisation policy,” a senior official said.
Under the policy, Oman mandates that companies employ a specific percentage of local workers. This reservation varies across various industries and job roles, and undergoes frequent revisions. Companies that meet those targets get favourable treatment by the government. Failure to meet targets invites penalties including fines, restrictions on obtaining new visas for expatriates and even revocation of existing work permits.
India wants that the target for Omanisation to be frozen at current levels for Indian companies and this to be put in the FTA explicitly. In fact, the pact includes areas other than trade and is called Comprehensive Economic Partnership Agreement (CEPA).
The clarity on the employment issue will help India better utilise the provisions regarding movement of professionals under the CEPA and guard against the policy of job reservation for Oman workers becoming restrictive in the future, he added.
Negotiations on CEPA with Oman, that started November 2023, were completed in March 2024. Signing was expected to be completed before 2024 general elections, but discussions continued as more issues cropped up.
The CEPA with Oman goes beyond what has been signed with the UAE in terms of scope and liberalisation. With the CEPA, India will get access to 98% of its products in Oman and significant access in services.
Oman’s import duties range from nil to 100% along with the existence of specific duties. Specific meats, wines and tobacco products are among items attract 100% duty..
To give the boost to the discussions on the trade deal Commerce and Industry Minister Piyush Goyal had visited Muscat in the last week of January. During the visit he attended the 1th Session of the India-Oman Joint Commission Meeting (JCM) and also met the top leadership. On the sidelines of the visit both countries also signed the protocol to amend the Double Taxation Avoidance Agreement (DTAA).
Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries. India’s exports to Oman stood at $ 443 billion in 2024-25 while imports exceeded $ 6.51 billion. Major Indian exports to Oman are petroleum products, engineering goods, minerals and chemicals. Major imports from Oman are petroleum, fertilisers, chemicals and plastics.
