In recent years, India’s ties with GCC countries have expanded significantly in both the economic and strategic sphere. People to people linkages between India and the Gulf are an important component of the relationship, since the region is home to a large population of Indian expats. According to estimates, over 9 million Indians reside and work in the Gulf. Indians in the Gulf account for well over 60% of Non-Resident Indians (NRI’s) globally. Linkages between India and the Gulf, however, are multilayered and no longer limited to a singular sphere. Both sides have re-oriented their approach as a result of the massive economic and geopolitical shifts which have taken place – globally, in the Middle East and in South Asia.
Trade between India and GCC and the India-UAE CEPA
In 2024-2025, trade with the GCC region was estimated at $ 178.56 billion. India had signed a Free Trade Agreement (FTA)/ Comprehensive Economic Partnership Agreement (CEPA) with the UAE in 2022. This FTA has given a significant boost to trade ties with the UAE. In FY 2025, bilateral trade between both countries surpassed $100 billion (in 2022, bilateral trade between India and the UAE was $72.87 billion). It would be pertinent to point out that the initial objective of the FTA was to push bilateral trade to $100 billion and to ensure that it expanded beyond the traditional areas. Several stakeholders, in India — especially state governments, Chambers of Commerce and business groups have been playing a pro-active role in giving a further thrust to economic relationship, post the signing of the India-UAE FTA. Similarly, business groups of the UAE have also been pushing for further strengthening the India-UAE economic relationship.
India-Oman ties
India also shares cordial ties with another GCC country — Oman. Like other Gulf countries, Oman is home to a large number of Indian expats – well over 6,50,000.
Bilateral relations in recent years have grown significantly. In December 2023, His Majesty Sultan Haitham bin Tarik, the Sultan of Oman, paid a three-day State Visit to India in December 2023.
During the Sultan of Oman’s India visit a joint vision document titled ‘A partnership for the future’ was released. The joint statement issued by both sides, after the meeting between the Sultan of Oman and Indian PM Narendra Modi, while referring to the document, highlighted some of the key areas identified for cooperation between both countries such as; maritime cooperation and connectivity, energy security and green energy, trade, digital payments and technology. It would be pertinent to point out, that India’s UPI payments and Rupay card systems are being integrated with Oman’s digital payment systems. An MoU was signed between National Payments Corporation of India (NPCI), International Payments Ltd (NIPL), and the Central Bank of Oman (CBO) in October 2022.
Both countries have also begun to work on multilateral platforms. India invited Oman as a guest country during the G20 Summit held in New Delhi in September 2023.
Despite improvement in ties between both countries, trade between India and Oman is well below potential. In 2024-2025, it was estimated at a little over $10 billion (Oman is India’s third-largest partner in the Gulf). Petroleum and Urea imports account for a significant percentage of the total imports from the Gulf country to India.
India-Oman FTA/CEPA: The relevance
Talks pertaining to an FTA/CEPA between both countries are likely to be concluded soon and the agreement will be signed soon. The trade pact is being translated into Arabic, after which the cabinets of both countries will give their approval to the agreement.
Talks pertaining to the agreement had begun in 2023. Some of India’s exports which could get a boost from the FTA are: textiles, agricultural commodities, plastics, automotive components, steel and electronics (tariffs in these could reduce from 5% to 0%).
One of the important points of discussion between both countries was regarding Indian workers in Oman. Under the Gulf country’s Omanisation policy, a minimum number of Qatar nationals need to be hired. India pitched strongly for safeguards, so that Indian expats working in Oman are not impacted.
Oman’s strategic importance
It would be pertinent to mention here, that Oman is also important due to its strategic location. The Gulf country is located near the Straits of Hormuz – via which 20% of global oil exports pass. While Oman is likely to invest in India’s infrastructural sector, post the signing of the FTA, India can participate in economically and strategically crucial projects of Oman like the Duqm Port. The FTA will give a further push to maritime cooperation and connectivity between India and Oman.
Other areas which could benefit through the FTA
The India-Oman CEPA will give not just a boost to trade and investment relations between both countries but could give a push to cooperation in areas like information technology, since greater linkages in the service sector, via easing of norms, is also one of the objectives of the CEPA. Indian IT companies could explore potential opportunities in the Gulf country. Apart from the above areas, people-to-people linkages – especially in the sphere of tourism could get a strong push. In 2024, Oman hosted over 7,00,000 Indian tourists.
Overall impact of the agreement
The soon-to-be-announced FTA is important for several reasons. First, it will give a boost to Oman-India economic relations – especially trade links. Second, it could pave the way for similar FTAs within the GCC block. Third, it reiterates the importance of the Gulf region for India. Third, a successful FTA would be a strong reiteration of how India is diversifying economic relations in an increasingly uncertain economic order, especially in the aftermath of the tariff with the US.
In conclusion, the India-Oman FTA will be important not just from an economic standpoint, but will also give a boost to bilateral cooperation in other areas – which has been strengthening in recent years. Apart from this — as mentioned earlier — the timing of the impending FTA is important given the economic uncertainty globally and the focus of India on strengthening its economic relationships with countries in the Gulf.
[Photo by Prime Minister’s Office (GODL-India), GODL-India, via Wikimedia Commons]
The views and opinions expressed in this article are those of the author.
Tridivesh Singh Maini is a New Delhi based analyst interested in Punjab-Punjab linkages as well as Partition Studies. Maini co-authored ‘Humanity Amidst Insanity: Hope During and After the Indo-Pak Partition’ (New Delhi: UBSPD, 2008) with Tahir Malik and Ali Farooq Malik. He can be reached at tridivesh80@hotmail.com.
