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20-12-2025
Bureau Report + Agencies
DUBAI/ NEW DELHI: India signed an economic partnership agreement with Oman on Thursday to boost bilateral trade and investment as it seeks to expand Middle East ties and diversify trade to beat steep US tariffs.
Oman has offered zero-duty access on over 98% of its tariff lines, covering nearly all Indian exports, including gems and jewelry, textiles, pharmaceuticals and automobiles, the Indian trade ministry said in a statement.
India, in turn, will cut tariffs on about 78% of its tariff lines, covering nearly 95% of imports from Oman by value.
India and Oman have annual trade of more than $10 billion.
The relationship is important for New Delhi as the Gulf nation is a gateway to the narrow Strait of Hormuz between Oman and Iran, a major transit point for global oil shipments.
“This (pact) will set a new pace of our trade, add new trust to our investments and open doors to new opportunities in many sectors,” Indian Prime Minister Narendra Modi said in an address in Oman today.
The pact, India’s second after one with the United Kingdom this year, will help Indian goods enter new markets as exporters intensify diversification efforts to defy US President Donald Trump’s punishing tariffs.
This is Oman’s first bilateral agreement since its 2006 deal with the United States.
After talks fell apart, Trump doubled duties on Indian goods to 50% in late August, the highest in the world. The hike included a 25% levy that was in retaliation for India’s purchases of Russian oil. Despite negotiations, New Delhi has been unable to close a deal with the US or the European Union this year, as initially intended.
The deal is “as much about geopolitics and regional presence as it is about tariffs,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
The pact will boost gem and jewelry exports which could rise from $35 million to about $150 million over the next three years, said Kirit Bhansali, chairman of Gems & Jewelry Export Promotion Council.
Sensitive items including dairy, tea, coffee, rubber and tobacco have been kept out of the pact. The pact also offers an opportunity in Oman’s $12.5 billion services import market, in which India currently holds just a 5.3% share, the statement said.
Earlier, India and the European Union will work to seal a long-pending trade deal at the earliest opportunity, New Delhi said on Wednesday, after concluding another round of talks amid signs that a year-end deadline may slip.
Indian Commerce Minister Piyush Goyal met an EU delegation led by European Commissioner for Trade and Economic Security Maros Sefcovic on Monday, as the two sides continued efforts to conclude the pact, the statement said.
Both sides have been pushing to close a broad trade deal after European Commission President Ursula von der Leyen and Prime Minister Narendra Modi agreed earlier this year to fast-track negotiations towards a year-end target.
Talks relaunched in 2022 have gained pace since US President Donald Trump imposed tariff hikes on trading partners including India. Brussels sealed deals with Mexico and Indonesia and stepped up talks with India.
Once implemented, the pact could further lift India-EU bilateral trade, which reached 120 billion euros ($139.75 billion) in 2024, with the balance in India’s favor.
Officials, however, said despite political will to conclude a deal, many issues still remain unresolved.
“Progress has been uneven, with key differences persisting on tariffs, market access and the enforceability of sustainability commitments,” said an official, with knowledge of the trade talks.
