Looking to expand its market access and strengthen its economic engagement with the Gulf region, India entered into a Free Trade Agreement called the Comprehensive Economic Partnership Agreement (CEPA) with Oman on December 18, 2025. This agreement has been entered into with the endeavour to expand bilateral trade, investment, and fortify economic ties between the two countries.
The agreement was signed by Shri Piyush Goyal, Minister of Commerce & Industry, India and H.E. Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion, Oman, in the presence of PM Narendra Modi and Sultan Haitham bin Tariq. This agreement is India’s second FTA signed in the last six months, after the UK FTA. This is the first bilateral agreement that Oman has signed with any country since their agreement with the United States of America in 2006.
At a time when the Gulf region is consolidating its position as a critical hub for global trade, investment, and services, the signing of the India–Oman Comprehensive Economic Partnership Agreement (CEPA) on 18 December 2025 marks a significant development with implications extending beyond the two signatory states. For Gulf economies—particularly the United Arab Emirates, which serves as a commercial, financial, and logistics bridge between India and the wider Middle East—the agreement signals a deepening of India’s structured economic engagement with the region.
The agreement builds on an already robust economic relationship between India and Oman, while complementing existing India–GCC trade corridors in which the UAE plays a central role as a re-export hub, investment destination, and base for regional operations.
This has been established on a pre-existing robust ground, wherein India and Oman already had strong economic ties. The bilateral trade between the two countries rose from $8.947 billion in FY24 to $10.613 billion in FY25, and investment links were strong, with more than 6,000 India-Oman Joint Ventures operating in Oman. Outward Direct Investment from India to Oman stands at $675 million, and FDI equity inflows from Oman into India between April 2000 and March 2025 total $610.08 million. The CEPA will make these ties stronger.
The current status concerning India’s exports and imports with Oman
India’s bilateral trade with Oman is currently dominated by petroleum products, oil, fertilisers and, to an extent, mineral products. Petroleum products accounted for 35.1% of India’s $4.06 billion worth of exports to Oman in 2024-25. Processed minerals accounted for another 9.2%.
The other major export categories include aircraft, spacecraft and parts (4.3%), cosmetics and toiletries (3.6%), and basmati rice (3.6%). Together, these five categories accounted for about 55% of India’s exports to Oman in 2024-25.
Crude oil and petroleum gases together accounted for 38% of India’s imports from Oman in 2024-25. Mineral or chemical fertilisers accounted for another 16.3%, acyclic alcohols 6.6%, and ammonia 5.8%. Together, these five categories accounted for a little more than two-thirds of India’s imports from Oman.
The goods and services traded between the two countries faced tariffs and limits, and now most of these will be reduced or removed. The agreement unlocks export opportunities for India’s labour-intensive sectors, including textiles, leather, footwear, gems & jewellery, engineering products, plastics, furniture, agricultural products, pharmaceuticals, medical devices and automobiles, generating employment and empowering artisans, women-led enterprises and MSMEs.
Provisions for trade of goods under India-Oman CEPA
India now has increased market access offered by Oman with zero-duty access on 98.08% of Oman’s tariff lines, covering 99.38% of India’s exports to Oman by value. The major labour-intensive sectors, including gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering products, pharmaceuticals, medical devices, and automobiles, receive full tariff elimination and out of the above, there is immediate tariff elimination on 97.96% of tariff lines.
In turn, India offers Oman an increased market access by providing tariff liberalisation on 77.79% of total tariff lines (12,556 lines), which covers 94.81% of imports from Oman by value. Further, for sensitive products, India follows tariff-rate quota (TRQ) based liberalisation, which allows limited duty concessions without full tariff removal. To safeguard its interest under this agreement, India has kept sensitive products such as agricultural products, 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. in the exclusion category without offering any concessions.
Provisions for trade of services under India-Oman CEPA
Since Oman’s global services imports stand at $12.52 billion, while India’s share of exports in Oman’s global imports is just 5.31%, data shows a significant untapped potential for Indian service providers. Under this agreement, Oman extends substantial commitments across several sectors, including Computer Related Services, Business and Professional Services, Audio-visual Services, Research and Development, Education and Health Services, and these commitments are expected to unlock significant new opportunities for Indian service providers, promoting high-value job creation and supporting expanding commercial engagement between the two countries.
The CEPA provides for 100% Foreign Direct Investment by Indian companies in major services sectors in Oman through commercial presence. There is an enhanced mobility framework for Indian professionals in Oman as well, with an increase in the quota for Intra-Corporate Transferees from 20% to 50% with a longer permitted duration of stay extending from some 90 days to 2 years, with a possibility of a further 2-year extension for Contractual Service Suppliers. The CEPA also provides for more liberal entry and stay conditions for skilled professionals in key sectors such as accountancy, taxation, architecture, medical and allied services, supporting deeper and more seamless professional engagement. Furthermore, both sides have agreed to hold future discussions on social security coordination once Oman’s contributory social security system is implemented. This is the first-ever commitment by any country on traditional medicine across all modes of supply, opening significant opportunities for India’s Ayush and wellness sectors.
The Benefits of the CEPA moving forward
Shri Piyush Goyal stated that the India-Oman CEPA strengthens the historically strong ties between the two countries, and this ambitious and balanced framework will significantly enhance opportunities for Indian exporters and professionals by essentially unlocking nearly universal duty-free access for Indian goods in the Omani market, expanding services commitments across key high-growth sectors, and ensuring greater mobility for Indian professionals. The CEPA is beneficial as it is expected to significantly boost bilateral trade, generate employment, expand exports, strengthen supply chains, and open new avenues for deeper, long-term economic engagement between India and Oman.
