India-Oman CEPA as much a strategic pact as a trade deal
The India-Oman CEPA, likely to be implemented in about three months, encompasses major areas, including trade in goods and services, professional mobility, investment flows and regulatory and strategic cooperation.
The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed on December 18, 2025, is the second trade pact forged by Delhi with a Gulf Cooperation Council member (after the UAE in 2022) giving it a firmer foothold in West Asia.
This provides Indian industry and service providers an edge over many competing countries in the Omani market as it is the second broad FTA signed individually by Oman since the one with the US in 2006.
The India-Oman CEPA, likely to be implemented in about three months, encompasses major areas including trade in goods and services, professional mobility, investment flows and regulatory and strategic cooperation.
What are the gains for India in the area of goods exports?
Oman has offered zero-duty access on 98 per cent of India’s tariff lines, covering 99.38 per cent of India’s exports to Oman. Most of this tariff elimination is immediate. As Oman currently imposes an average of 5 per cent tariffs on over 80 per cent of goods (some go up to 100 per cent), this creates big opportunities in sectors such as minerals, chemicals, base metals, machinery, plastic, rubber, transport/auto and processed food, per a government study.
For all these products, India’s exports have been low despite Oman importing large quantities of these from the rest of the world. Other items which stand to gain from tariff elimination include vegetable products, gems and jewellery, animal/vegetable oil, textile and animal products.
India’s exports, at just $4.1 billion in FY25, could increase by $2 billion in just two years and then rise further, per informal estimates made by the government. However, with Oman’s total annual imports around $40 billion, India could aim for an export push but within limits.
What is the scope for India in the services sector?
India’s services exports of $665 million in CY2024 accounted for just over 5 per cent of Oman’s total services imports of $12.52 billion, indicating significant untapped potential. Oman has undertaken “commercially meaningful” market access and national treatment commitments in key services sectors of export interest to India, including a wide range of professional services such as legal, accounting medical, architectural and engineering; computer and related services; audio-visual services; educational services; environmental services; health services, tourism and travel-related services.
What has been offered in terms of labour mobility?
Oman has undertaken commitments on temporary entry and stay for natural persons supplying services, including, intra-corporate transferees (ICT) and contractual service suppliers – stay up to 4 years); business visitors – stay up to 90 days and independent professionals – stay up to 180 days.
Oman has raised the ICT cap to 50 per cent from 20 per cent, enabling Indian companies to deploy a larger share of managerial, executive, and specialist staff, exceeding its commitments under GATS and other FTAs.
Does the FTA take care of India’s concerns related to the `Omanisation’ policy of compulsory recruitment of locals by the private sector?
The FTA provides binding assurance for Indian workers engaged in non-services sectors, including manufacturing and industrial activities. This is a first of its kind provision in India’s FTAs and is significant in the context of the Omanisation policy. It supports Indian investments and operations of India-Oman joint ventures by providing predictability and legal clarity
What has Oman gained from the FTA?
India has offered tariff liberalisation on 77.79 per cent of its total tariff lines (12,556) which covers 94.81 per cent of India’s imports from Oman by value. India will reduce tariffs on Omani products such as dates, petroleum items and marbles, but in many cases within specified quotas. India’s imports from Oman last fiscal were at over $6.6 billion.
To protect its vulnerable sectors, sensitive items have been kept out of tariff reduction commitments, including dairy, tea, coffee, rubber, and tobacco products; gold and silver bullion, jewellery; other labour-intensive products such as footwear, sports goods; and scrap of many base metals.
What are the strategic benefits for India?
The deal helps India in its diversification strategy (to hedge against rising trade barriers in the US and the EU) by securing predictable market access in West Asia. It gives Indian exporters a competitive edge over many other countries in Asia, including China. With over 6,000 India–Oman joint ventures and Indian investments of more than $7.5 billion, the CEPA is as much a strategic pact as a trade deal, according to research body GTRI.
Published on December 23, 2025
