“The Oman CEPA is not just a trade deal — it is a gateway to the Gulf, East Africa, Central Asia, and Eastern Europe.” — Piyush Goyal, India’s Commerce & Industry Minister
The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman formally entered into force on June 1, 2026, marking one of the most significant milestones in India’s trade diplomacy in the Gulf region. The agreement was originally signed in Muscat on December 18, 2025, during Prime Minister Narendra Modi’s visit to Oman — when Sultan Haitham bin Tarik also conferred upon him the Order of Oman, the country’s highest civilian honour.
The CEPA goes well beyond conventional tariff reduction to cover trade in services, investment, professional mobility, regulatory cooperation, intellectual property rights, digital trade, and government procurement. It is India’s second CEPA with a GCC country (after the UAE CEPA of February 2022) and Oman’s first bilateral trade agreement since 2006.
📜 Background and Negotiations
India and Oman share historically close ties anchored in energy trade, investment, and people-to-people connections. Formal CEPA negotiations commenced in November 2023 and were concluded in August 2025 after multiple rounds of talks, reflecting focused political will on both sides.
The agreement comes at a strategically important juncture. Indian exporters face increasing market access constraints in Western destinations — including US tariff pressures and the EU’s Carbon Border Adjustment Mechanism (CBAM). The Oman CEPA offers an alternative, growing Gulf market. India’s Commerce Minister Piyush Goyal, addressing the India–Oman Business Forum in Muscat, underscored Oman’s role as a gateway to the GCC, East Africa, Central Asia, and Eastern Europe.
From Oman’s side, the agreement aligns with Vision 2040 — Oman’s economic diversification plan to reduce dependence on hydrocarbons, attract foreign investment, and modernise its services sector. Oman is the oldest independent state in the Arab world, with Muscat as its capital and a population of approximately 4.5 million.
Think of a CEPA as a “super-FTA.” While a regular Free Trade Agreement mainly reduces customs duties on goods, a CEPA also opens up services (like IT, healthcare, education), enables companies to set up offices abroad, makes it easier for professionals to work in the partner country, and aligns regulations — creating a much deeper economic bond.
⚖️ Market Access and Tariff Coverage
The tariff architecture of the India–Oman CEPA is asymmetrically generous to Indian exports, reflecting the existing trade imbalance and India’s negotiating priorities in labour-intensive sectors.
Oman’s concessions to India: Oman has committed to granting duty-free or concessional access across 98.08% of its tariff lines, covering 99.38% of India’s export value to Oman. Currently, only 15.33% of India’s export value enters Oman at zero MFN duty. Under CEPA, Indian goods including iron and steel, electric machinery, marine products, pharmaceuticals, vaccines, chemicals, mineral fuels, plastics, engineering goods, marble, and agricultural produce will attract zero or substantially reduced duties immediately. Removal of the prevailing 5% tariff on Indian goods worth approximately USD 3.64 billion will significantly boost price competitiveness.
India’s concessions to Oman: India has offered tariff liberalisation on approximately 94.81% of India’s imports from Oman by value (~78% of tariff lines). India has extended concessions to Omani products including dates (up to 2,000 tonnes annually, duty-free), Gum Arabic, frankincense, petrochemicals, marble blocks, and marine products. India has placed 2,789 tariff lines in its exclusion list, protecting sensitive domestic sectors such as transport equipment, major chemicals, cereals, fruits and vegetables, and agricultural commodities.
| Dimension | Oman’s Offer to India | India’s Offer to Oman |
|---|---|---|
| Tariff Lines Covered | 98.08% of Oman’s tariff lines | ~78% of India’s tariff lines |
| Export Value Coverage | 99.38% of India’s export value | 94.81% of imports from Oman by value |
| Zero-Duty Access (Current MFN) | Only 15.33% of India’s exports | Selective; improving under CEPA |
| Key Beneficiary Products | Steel, pharma, marine, engineering | Dates, petrochemicals, marble, LNG |
| Tariff Rate Quotas (TRQs) | — | Applied to select sensitive Omani exports |
| Exclusion List | Minimal exclusions | 2,789 tariff lines excluded |
Key Number to Remember: Oman opens 98.08% of tariff lines covering 99.38% of India’s export value — near-universal free access. India protects 2,789 sensitive lines. Bilateral trade = USD 11.18 billion (FY26).
✨ Services, Investment and Professional Mobility
Services: Oman has made commitments across 127 sub-sectors — the most ambitious services commitment in any agreement Oman has signed — covering professional services, IT, audio-visual, R&D, education, healthcare, environmental services, tourism, and business services. India’s services exports to Oman have grown from USD 397 million (2020) to USD 665 million (2024). Oman imports services worth USD 12.52 billion globally, of which India’s share is only 5.31% — indicating substantial headroom for expansion.
Investment: Under the investment chapter, Oman permits 100% FDI by Indian companies in major services sectors via commercial presence. India’s cumulative investment in Oman stands at USD 675 million; Omani FDI equity into India (April 2000–March 2025) is USD 610.08 million. Over 6,000 joint ventures already exist between the two nations in Oman.
Professional Mobility: The CEPA introduces significant improvements in movement of natural persons. The ceiling for intra-corporate transferees is raised from 20% to 50%, while contractual service suppliers may stay up to two years, extendable further. For the first time under any India–Oman agreement, a defined category of skilled professionals — engineers, medical professionals, IT specialists, educators, architects, accountants, taxation experts, and consultants — has been formally recognised. The agreement also enables future negotiations on a Social Security Agreement to prevent dual contributions by workers.
With over 700,000 Indian nationals already in Oman — the largest expatriate community there — the CEPA’s professional mobility provisions go beyond numbers. By formally recognising Indian professionals in law, medicine, engineering, and IT, the agreement creates a structural channel for India’s talent surplus to address Oman’s Vision 2040 skill gaps. This is soft power through trade architecture.
🌍 Key Sectors and Expected Impact
Goods exports from India: Engineering goods, pharmaceuticals and vaccines, marine products, agricultural produce, textiles and apparel, gems and jewellery, transport equipment, and chemicals are the sectors expected to record the greatest gains. MSME-driven industries in states including Uttar Pradesh, Punjab, Gujarat, Tamil Nadu, Maharashtra, Andhra Pradesh, Haryana, and Telangana are expected to benefit most — these states concentrate in textiles, leather, plastics, gems, and marine products.
Energy & strategic imports: India imported USD 7.2 billion worth of goods from Oman in FY2026, dominated by crude oil (USD 1.6 billion), LNG (USD 1.2 billion), and fertilisers (USD 843 million). The CEPA provides India stable, preferential access to these strategic imports critical to energy and food security.
AYUSH and pharma: Fast-tracking of pharmaceutical approvals and mutual recognition of GMP documents will directly benefit Indian pharmaceutical manufacturers. AYUSH products (Ayurveda, Yoga, Unani, Siddha, Homeopathy) are expected to gain a regulated foothold in Oman’s healthcare market.
Strategic connectivity: Oman sits at the Strait of Hormuz — a key global energy transit chokepoint. Using Oman, especially the Duqm port, as a re-export hub offers India a logistics gateway into Africa, the Middle East, and Central Asia.
Don’t confuse the CEPA sequence: India’s CEPA history is South Korea (2010) → Japan (2011) → UAE (February 2022) → Oman (December 2025 / June 2026). The Oman CEPA is India’s fourth CEPA overall and second with a GCC state. Also, the UAE CEPA was signed February 18, 2022 and entered into force May 1, 2022 — not the same date.
📌 India’s Gulf Trade Strategy: Bigger Picture
The Oman CEPA builds on the success of the India–UAE CEPA (negotiated in just 88 days, covering nearly 11,908 Indian tariff lines, targeting USD 100 billion in goods trade within five years). India is simultaneously pursuing a broader India–GCC FTA — negotiations resumed in November 2022 but a comprehensive agreement is yet to be finalised.
The Oman CEPA positions India favourably against competitors — China, Turkey, Italy, Thailand — that currently supply goods to Oman. Preferential tariff treatment gives Indian exporters a measurable price edge in textiles, processed food, gems, and machinery.
A potential complication: multiple bilateral FTAs with individual GCC members may create varying rules of origin and compliance burdens, complicating the path toward a comprehensive India–GCC agreement. India’s trade negotiators will need to manage this carefully as the Gulf strategy deepens.
India’s Gulf trade strategy is a response to two converging pressures: Western market headwinds (US tariff uncertainty, EU’s CBAM) and the need to diversify export destinations as India pushes toward a USD 5 trillion economy. The GCC offers India not just tariff access but demographic resonance — millions of Indian diaspora workers whose remittances, professional networks, and cultural connections make economic integration sticky and self-reinforcing.
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The India–Oman CEPA entered into force on June 1, 2026. It was signed on December 18, 2025, in Muscat during PM Modi’s visit.
Oman opened 98.08% of its tariff lines covering 99.38% of India’s export value. Currently only 15.33% of India’s export value enters Oman at zero MFN duty.
The Oman CEPA is India’s fourth CEPA overall: South Korea (2010), Japan (2011), UAE (2022), and Oman (2026). It is India’s second CEPA with a GCC country.
Formal negotiations commenced in November 2023 and were concluded in August 2025 after multiple rounds of talks.
Oman committed to opening 127 services sub-sectors — the most ambitious services commitment in any agreement Oman has signed, covering IT, healthcare, education, professional services, and more.
