Negotiations for the proposed India-Oman Free Trade Agreement (FTA) are close to completion, with both sides currently discussing the Gulf nation’s labor policy known as 'Omanisation.' New Delhi seeks to ensure that the existing Omanisation framework for its workers remains unchanged, according to an official.

Omanisation is a policy aimed at increasing employment of Omani nationals in the private sector, requiring companies to hire a certain percentage of local workers. These quotas differ by industry and are regularly updated. The official explained, "Oman requires companies to employ a set percentage of Omani nationals, ranging from 15% to 30%, depending on the sector. We want this current Omanisation system to stay permanent so it doesn’t become more restrictive after the FTA is finalized."

The talks gained momentum following Commerce and Industry Minister Piyush Goyal’s visit to Muscat in January this year. Formal discussions on the Comprehensive Economic Partnership Agreement (CEPA) began in November 2023. Such agreements typically involve reducing or removing customs duties on many traded goods and easing regulations to boost trade in services and investments.

Oman ranks as India’s third-largest export market among Gulf Cooperation Council (GCC) countries. India already has a similar trade pact with the UAE, effective since May 2022. Bilateral trade between India and Oman stood at approximately $9 billion in 2023-24, with exports worth $4.42 billion and imports around $4.52 billion. India mainly imports petroleum products and urea, which make up over 70% of its imports, along with propylene and ethylene polymers, pet coke, gypsum, chemicals, and iron and steel.