The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman came into force on June 1, marking a significant milestone in bilateral economic relations and strengthening India’s strategic presence in the Gulf region. The agreement becomes India’s fifth major free trade pact to be implemented since 2014, following similar agreements with Mauritius, the UAE, Australia and the European Free Trade Association (EFTA). The development comes as New Delhi accelerates trade negotiations with several key partners, including the Gulf Cooperation Council (GCC), the European Union and other major economies. The India-Oman CEPA is expected to boost exports, services trade, investment flows and professional mobility while creating new opportunities for Indian businesses across multiple sectors.
What is a Comprehensive Economic Partnership Agreement?
A Comprehensive Economic Partnership Agreement, or CEPA, is a broad-based trade pact that goes beyond the traditional framework of a Free Trade Agreement (FTA). While a conventional FTA primarily focuses on reducing or eliminating tariffs on goods, a CEPA covers a much wider range of economic activities. These include trade in goods and services, investment, intellectual property rights, customs cooperation, dispute settlement mechanisms, professional mobility and regulatory collaboration. Modern CEPAs typically contain around 20 chapters that collectively create a comprehensive framework for deeper economic integration between participating countries.
India-Oman trade relationship continues to expand
Economic ties between India and Oman have witnessed steady growth in recent years. Bilateral trade reached $11.18 billion during 2025-26, up from $10.61 billion in 2024-25. India’s exports to Oman stood at $4.02 billion, while imports from Oman were valued at $7.16 billion. Services trade has also recorded strong growth. India’s services exports to Oman increased from $397 million in 2020 to $665 million in 2024, driven largely by telecommunications, computer and information services, transport and travel-related sectors. The CEPA is expected to further accelerate this growth trajectory by reducing trade barriers and encouraging greater economic engagement.
Major boost for Indian exporters
One of the most significant outcomes of the agreement is Oman’s decision to grant 100 per cent duty-free market access to Indian exports across 98.08 per cent of its tariff lines, covering 99.38 per cent of India’s export value. These benefits are available from the very first day of implementation.
At present, only around 15 per cent of India’s exports enter Oman duty-free under the Most Favoured Nation (MFN) regime. The agreement removes the existing 5 per cent import duty on Indian goods worth approximately $3.64 billion, significantly improving their competitiveness in the Omani market.
Several key sectors are expected to gain from the agreement, including:
- Textiles and garments
- Engineering goods
- Agricultural products
- Marine products
- Processed food
- Gems and jewellery
- Chemicals
- Machinery
- Plastics and rubber products
- Automobiles
The removal of tariffs is expected to make Indian vehicles more competitive in Oman while also ensuring permanent zero-duty access for several important medicines and vaccines.
Strategic significance beyond trade
The importance of the agreement extends well beyond economics.ย Oman occupies a strategically crucial position near the Strait of Hormuz, one of the world’s most important maritime chokepoints through which a substantial share of global oil trade passes. The country is increasingly viewed as a gateway for Indian goods and services seeking access to broader markets across the Middle East and Africa. The CEPA is therefore expected to strengthen India’s commercial and strategic footprint in a region of growing geopolitical importance.
Strong Indian presence in Oman
Nearly 7,00,000 Indians currently reside in Oman and contribute significantly to the country’s economy. The Indian diaspora sends home an estimated $2 billion annually in remittances. More than 6,000 Indian companies are operating in Oman, reflecting the depth and maturity of bilateral economic engagement. The new agreement further strengthens India’s expanding trade integration with the Gulf region following the successful implementation of the India-UAE CEPA. It also comes ahead of planned trade negotiations with Qatar and the broader GCC bloc.
A key step in India’s trade strategy
The India-Oman CEPA represents an important step in India’s broader strategy of securing deeper market access, diversifying export destinations and strengthening economic partnerships with strategically important regions. With near-complete duty-free access for Indian goods, growing services trade and stronger investment linkages, the agreement is expected to create long-term opportunities for businesses, professionals and investors in both countries.
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