India, Oman Seal Landmark CEPA to Deepen Trade, Services, and Strategic Ties
India and Oman sign a landmark CEPA in Muscat, unlocking zero-duty access, services mobility, and strategic trade growth across the Gulf region.
Introduction: A Strategic Trade Milestone in the Gulf
In a move that significantly reshapes India’s economic engagement with the Gulf region, India and Oman have formally signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat. Witnessed by Prime Minister Narendra Modi and Sultan Haitham Bin Tarik, the agreement marks a decisive step toward deeper trade integration, services cooperation, and people-to-people connectivity between the two nations.
Beyond tariff reductions, the CEPA reflects a broader strategic vision—positioning Oman as a critical gateway for Indian businesses into the Middle East and Africa, while reinforcing India’s growing footprint in global trade diplomacy.
Context & Background: Strengthening India’s Gulf Trade Strategy
The CEPA was signed on December 18 in Muscat by India’s Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef. Notably, this is Oman’s first bilateral trade agreement since its Free Trade Agreement with the United States in 2006, underlining the deal’s strategic importance.
For India, the agreement comes just months after signing the Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom in July 2025, making the Oman CEPA India’s second major FTA in six months. The deal aligns with New Delhi’s calibrated trade strategy—prioritizing partnerships with economies that complement, rather than compete with, India’s labour-intensive sectors.
Main Developments: What the CEPA Delivers
Unprecedented Market Access for Indian Goods
One of the most consequential elements of the CEPA is Oman’s offer of zero-duty access on 98.08% of its tariff lines, covering 99.38% of India’s exports to Oman. Immediate tariff elimination applies to 97.96% of these lines, delivering instant competitiveness to Indian exporters.
All major labour-intensive sectors benefit, including:
- Gems and jewellery
- Textiles and apparel
- Leather, footwear, and sports goods
- Plastics and furniture
- Agricultural and processed food products
- Engineering goods, pharmaceuticals, medical devices, and automobiles
In return, India has offered tariff liberalisation on 77.79% of its tariff lines, accounting for 94.81% of imports from Oman by value. Sensitive sectors for India—particularly agriculture, bullion, select labour-intensive goods, and base metal scrap—remain protected through exclusions or tariff-rate quotas.
Services Trade: Unlocking Untapped Potential
Services form the backbone of India’s economic strength, and the CEPA significantly expands India’s access to Oman’s $12.52 billion services import market. With India currently accounting for only 5.31% of Oman’s global services imports, the agreement opens substantial new avenues.
Oman has extended wide-ranging commitments across:
- Computer and IT-enabled services
- Business and professional services
- Audio-visual and creative sectors
- Research and development
- Education and health services
These provisions are expected to support high-value job creation, expand Indian service exports, and deepen long-term commercial engagement.
Mobility of Professionals: A Game-Changer
A standout feature of the CEPA is the enhanced mobility framework for Indian professionals. For the first time, Oman has made comprehensive commitments under Mode 4 (movement of skilled professionals).
Key provisions include:
- Increase in intra-corporate transferee quota from 20% to 50%
- Extension of contractual service suppliers’ stay from 90 days to two years, with a possible additional two-year extension
- Liberalized entry conditions for professionals in sectors such as accountancy, taxation, architecture, and medical services
These measures are expected to significantly ease cross-border professional movement and strengthen institutional and business linkages.
FDI, Social Security, and Traditional Medicine
The agreement allows 100% Foreign Direct Investment (FDI) by Indian companies in major services sectors in Oman through commercial presence, enabling Indian firms to scale operations across the Gulf.
Additionally, both countries have committed to future discussions on social security coordination, reflecting a forward-looking approach to labour protection once Oman’s contributory system is fully implemented.
A landmark inclusion is Oman’s comprehensive commitment on traditional medicine across all modes of supply—the first such pledge by any country—opening major opportunities for India’s AYUSH and wellness sectors in the region.
Expert Insight & Public Sentiment
Trade analysts view the CEPA as a strategically balanced agreement. Policy experts note that Oman’s location near the Strait of Hormuz, one of the world’s most critical maritime chokepoints, gives the deal geopolitical and logistical relevance beyond pure economics.
The Indian business community has welcomed the agreement, particularly exporters and service providers who see Oman as a stable, business-friendly hub for accessing wider Middle Eastern and African markets.
Impact & Implications: What Comes Next
With bilateral trade already exceeding $10.5 billion in 2024–25—including $4 billion in exports and $6.54 billion in imports—the CEPA is expected to substantially expand trade volumes, strengthen supply chains, and generate employment.
The agreement also reinforces ties with Oman’s vibrant Indian diaspora of nearly 700,000 people, including merchant families with roots stretching back over two centuries. Annual remittances of around $2 billion underscore the depth of this economic relationship.
Implementation is expected by the first quarter of 2026, giving businesses time to align supply chains, investment plans, and service delivery models.
Conclusion: A Forward-Looking Partnership
The India–Oman CEPA is more than a trade agreement—it is a strategic blueprint for long-term economic integration, professional mobility, and regional connectivity. As India continues to recalibrate its global trade architecture, partnerships like this signal a deliberate shift toward value-driven, complementary alliances.
By combining market access, services liberalisation, and people-centric provisions, the CEPA positions India and Oman to emerge as stronger economic partners in an increasingly interconnected Indo-Gulf landscape.
Disclaimer: This article is an original, independent analysis based solely on the provided headline and contextual inputs. It does not reproduce or paraphrase any existing publication.