In a significant move to deepen economic integration, India and Oman officially inked a landmark Comprehensive Economic Partnership Agreement (CEPA) on Thursday. The pact, signed in Muscat, promises to transform bilateral trade by removing tariffs on the vast majority of goods and services exchanged between the two nations.
What the India-Oman CEPA Deal Entails
The agreement was formally signed by India's Commerce and Industry Minister, Piyush Goyal, and Oman's Minister of Commerce, Industry and Investment Promotion, Qais bin Mohammed Al Yousef. The ceremony was graced by the presence of Prime Minister Narendra Modi. Officials expect the pact to become operational from the first quarter of the next calendar year.
Under the terms, Oman has granted zero-duty access on over 98% of its tariff lines, which effectively covers 99.38% of India's exports to the Sultanate. A massive 97.96% of product categories will see immediate elimination of import duties.
This is a major win for India's key employment-generating sectors. Gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering goods, pharmaceuticals, medical devices, and automobiles are among the industries that will benefit from full tariff removal. Currently, these products attract about 5% duty in the Omani market.
Balanced Concessions and Strategic Safeguards
In return, India has agreed to provide tariff liberalisation on 77.79% of its total tariff lines, covering 94.81% of imports from Oman by value. For sensitive products where Oman has strong export interests—such as dates, marbles, and petrochemicals—India will primarily offer concessions through carefully managed tariff-rate quotas (TRQs).
To protect domestic industries, India has kept several critical items in an exclusion list, meaning they will not see tariff cuts. This list includes dairy products, tea, coffee, rubber, tobacco, gold and silver bullion, jewellery, footwear, sports goods, and scrap of several base metals.
Services, Investments, and Easier Mobility for Professionals
The India-Oman CEPA goes beyond goods, making substantial strides in services and investments. Oman has made wide-ranging commitments in sectors like computer-related services, professional and business services, audio-visual services, R&D, education, and health. With Oman's global services imports valued at $12.52 billion and India's current share at just 5.31%, officials see immense untapped potential.
The agreement also permits 100% foreign direct investment by Indian companies in major Omani services sectors through commercial presence.
A pivotal aspect of the deal is the enhanced mobility framework for Indian skilled professionals. For the first time, Oman has offered extensive commitments under Mode 4. Key improvements include increasing the quota for intra-corporate transferees from 20% to 50%, and extending the permitted stay for contractual service suppliers from 90 days to two years, with a possible two-year extension. Sectors like accountancy, taxation, architecture, and medical services will enjoy more liberal entry conditions.
Deepening a Vital Economic Partnership
The India–Oman bilateral trade stood at approximately $10.5 billion in 2024–25, with Indian exports at $4 billion and imports at $6.54 billion. Oman is India's third-largest export destination within the Gulf Cooperation Council (GCC).
The human and investment links are equally strong. Nearly 7 lakh Indian nationals reside in Oman, sending back around $2 billion in remittances annually. Over 6,000 Indian businesses operate there, and Oman has invested $615.54 million in FDI into India between April 2000 and September 2025.
This pact marks India's second trade agreement in six months and its second CEPA with a GCC nation after the UAE deal in May 2022. For Oman, this is its first bilateral trade agreement since signing one with the US in 2006. Negotiations, which began in November 2023, concluded successfully this year.
The timing is strategically crucial for India, which faces steep 50% tariffs in the US, its largest export market. Diversifying trade partners through agreements like the India-Oman CEPA is now a central pillar of India's economic diplomacy, aiming to secure stable markets and boost domestic manufacturing and employment.
