India-Oman FTA on track for June 1 start even as deal with Chile hits hurdles, says Commerce Minister

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed in December 2025, is on track to come into force from June 1, 2026, following Oman...

What Happened

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed in December 2025, is on track to come into force from June 1, 2026, following Oman's ratification via Royal Decree in February 2026.
Under the agreement, Oman will provide duty-free access on 98.08% of its tariff lines, covering 99.38% of India's exports by value.
Key Indian export sectors expected to benefit include textiles and ready-made garments, leather and footwear, gems and jewellery, engineering goods, automobiles and auto components, pharmaceuticals, medical devices, chemicals, plastics, furniture, and agricultural and marine products — many of them MSME-led and labour-intensive.
Separately, negotiations for an India-Chile Comprehensive Economic Partnership Agreement (CEPA) have hit hurdles due to the significant asymmetry in the size of the two economies and the scale of opportunities available to each side; both parties are exploring "innovative solutions."
India and Chile already have a Preferential Trade Agreement (PTA) signed in March 2006 and in force since 2007; the proposed CEPA would expand this to include digital services, investment, MSME cooperation, and critical minerals.
Bilateral trade between India and Oman stood at approximately USD 10.61 billion in FY 2024-25, with Oman as India's 28th largest trading partner.

Static Topic Bridges

Types of Trade Agreements — PTA, FTA, and CEPA

India enters into various forms of trade agreements, distinguished by their scope and depth:

Preferential Trade Agreement (PTA): Covers a limited list of products on which tariff preferences (partial reductions, not elimination) are exchanged. It does not cover services or investment. India's oldest PTAs include those with Chile (2006) and MERCOSUR (2009).
Free Trade Agreement (FTA): Covers substantially all trade in goods, aiming for zero or near-zero tariffs across a broad product universe. May include some services provisions. Example: India-ASEAN FTA (Goods, 2010).
Comprehensive Economic Partnership Agreement (CEPA): The most expansive category — covers goods (tariff elimination/reduction), services, investment, intellectual property, customs facilitation, MSMEs, and sometimes digital trade. Examples: India-UAE CEPA (2022), India-South Korea CEPA (2009), India-Japan CEPA (2011).
Comprehensive Economic Cooperation Agreement (CECA): A variant of CEPA used in specific contexts (e.g., India-Singapore CECA, 2005).

India-UAE CEPA: Signed February 18, 2022; entered into force May 1, 2022 — India's fastest-ever concluded CEPA.
India-South Korea CEPA: Signed August 7, 2009.
India-Japan CEPA: Endorsed February 16, 2011.
India-Oman CEPA: Signed December 2025; ratified by Oman via Royal Decree, February 2026; implementation target June 1, 2026.
India-Chile PTA: Signed March 8, 2006; entered into force September 2007 (India) and August 2007 (Chile).

Connection to this news: The India-Oman CEPA is the latest addition to India's expanding CEPA network in the Gulf region, following UAE. The Chile situation illustrates the challenge of negotiating a CEPA when economies are asymmetric — smaller economies may struggle to offer comparable market access across all CEPA pillars.

India-Gulf Cooperation Council (GCC) Trade Relations and Strategic Importance

The Gulf Cooperation Council (GCC) — comprising Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman — is India's largest trading bloc collectively, and the Gulf is home to approximately 8.9 million Indian diaspora. India's trade and strategic engagement with the Gulf is underpinned by multiple pillars: crude oil and LNG imports (energy security), Indian labour remittances (a major BoP buffer), trade in goods (especially India's manufactured exports), and increasingly, investment flows (sovereign wealth funds from Gulf states investing in India). The India-UAE CEPA (2022) was a landmark — the first bilateral CEPA India concluded in over a decade — and the India-Oman CEPA follows in the same strategic framework.

India-GCC bilateral trade (2024-25): Approximately $162 billion, making GCC India's largest trading bloc collectively.
Indian diaspora in GCC: ~8.9 million (largest source of remittances to India).
India's imports from GCC: Predominantly crude oil, LNG, and petrochemicals.
India's exports to GCC: Engineering goods, pharmaceuticals, textiles, gems and jewellery, food products.
India-UAE CEPA (2022): Bilateral trade target of $100 billion in 5 years; UAE provides duty-free access for ~97% of India's exports by value.
India-Oman CEPA: Oman provides duty-free access on 98.08% of tariff lines covering 99.38% of India's exports by value.
India-Oman bilateral trade (FY 2024-25): ~USD 10.61 billion; Oman is India's 28th largest trading partner.

Connection to this news: The India-Oman CEPA is part of India's broader strategy to institutionalise trade and investment ties with GCC economies through comprehensive frameworks, building on the India-UAE CEPA precedent and taking advantage of India's growing strategic profile in the Gulf.

Critical Minerals and Emerging Trade Architecture

Critical minerals are those essential for clean energy technologies (batteries, solar panels, electric vehicle motors) and advanced manufacturing — including lithium, cobalt, nickel, rare earth elements, copper, and phosphates. Nations globally are building "critical mineral supply chains" and trade agreements are increasingly incorporating critical mineral access provisions as a strategic layer. India launched the Critical Minerals Mission and has identified 30 critical minerals for supply chain security. Chile is the world's largest producer of copper and holds a significant share of global lithium reserves — making it a strategic partner for India's energy transition ambitions.

India's Critical Minerals list: 30 minerals identified (including lithium, cobalt, nickel, graphite, rare earths, titanium, manganese).
Chile: World's largest copper producer (~25% of global output); holds ~23% of global lithium reserves (second largest after Bolivia's deposits).
Critical Minerals Mission launched by India to secure supply chains for clean energy and electronics manufacturing.
The proposed India-Chile CEPA specifically includes critical minerals as a key negotiating pillar — beyond the scope of the existing PTA.
India-Australia CMET (Critical Minerals Investment Partnership) and India-US IMEC are parallel frameworks for mineral security.

Connection to this news: The hurdles in the India-Chile CEPA negotiations are partly a reflection of the challenge in valuing critical mineral access — India is seeking a comprehensive agreement partly because Chile can offer unique strategic value (copper, lithium) that goes beyond traditional goods trade calculus.

Key Facts & Data

India-Oman CEPA signed: December 2025
Oman ratification: Royal Decree, February 2026
CEPA implementation target: June 1, 2026
Oman duty-free tariff lines for India: 98.08% of tariff lines; 99.38% of India's exports by value
India-Oman bilateral trade (FY2024-25): ~USD 10.61 billion; Oman is India's 28th largest trading partner
India-Chile PTA signed: March 8, 2006; in force from September 2007 (India)
India-UAE CEPA signed: February 18, 2022; in force: May 1, 2022
India-South Korea CEPA: Signed August 7, 2009
India-Japan CEPA: Endorsed February 16, 2011
GCC-India bilateral trade (2024-25): ~$162 billion (India's largest collective trading bloc)
Indian diaspora in GCC: ~8.9 million
Chile: World's largest copper producer (~25% global); significant lithium reserves (~23%)
India's Critical Minerals list: 30 minerals identified
CEPA covers: Goods, services, investment, IP, customs cooperation, MSMEs, digital trade