The negotiations for the proposed free trade agreement (FTA) between India and Oman are moving at a fast pace and the pact is likely to be signed next month, a senior government official said.

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Officials of the two countries concluded the second round of talks for the pact, officially dubbed as Comprehensive Economic Partnership Agreement (CEPA) earlier this month in Muscat.

"With Oman, there is a very good progress and both sides are very eager to conclude this deal. It may be signed in January 2024," the official said.

The negotiations on the text of most of the chapters have been concluded by both sides.

Oman is India's third-largest export destination among the Gulf Cooperation Council (GCC) countries. The pact would help increase exports from India post the free trade agreement, as currently over 80 per cent of its goods enter Oman at an average 5 per cent import duties, and there are not many trade barriers.

According to think tank GTRI's (Global Trade Research Initiative) report, Indian goods worth USD 3.7 billion such as gasoline, iron and steel, electronics, and machinery will get a significant boost in Oman, once both sides reach a comprehensive free trade agreement.

Export sectors which could get a boost in Oman include motor gasoline (exports worth USD 1.7 billion), iron and steel products (exports worth USD 235 million), electronics (USD 135 million), machinery (USD 125 million), textiles (USD 110 million), plastics (USD 64 million), boneless meat (USD 50 million), essential oils (USD 47 million), and motor cars (USD 28 million), will benefit from duty elimination, the report has stated.

India has implemented a trade agreement with the UAE also in May 2022. Both Oman and UAE are members of the Gulf Cooperation Council (GCC).

"Oman's GDP is about USD 115 billion and its population is 5 million. Oman's higher per capita income (USD 25,060) compared to India's (USD 2,370) could mean a demand for more diversified and possibly higher-value goods and services in Oman, which India could aim to supply," GTRI Co-Founder Ajay Srivastava has said.

The bilateral trade stood at USD 12.39 billion in 2022-23. India's exports have increased from USD 2.25 billion in 2018-19 to USD 4.48 billion in 2022-23. Imports from the Gulf nation were USD 8 billion in the last fiscal.