A practical overview of the 2025 India–Oman Comprehensive Economic Partnership Agreement, covering tariff liberalisation, key beneficiary sectors, services commitments, professional mobility, and the agreement’s wider trade and investment significance.
A Comprehensive Economic Partnership Agreement (CEPA) is a bilateral trade arrangement that goes beyond the scope of traditional Free Trade Agreements (FTAs). In a CEPA, countries agree to preferential trade terms on goods and to cooperate on many other economic areas. This typically includes liberalizing trade in services, protecting and promoting investments, and covering issues like intellectual property rights, competition policy and government procurement. In effect, a CEPA links two economies with broad commitments, rather than focusing on goods alone.
How are CEPAs different from traditional FTAs
Traditional FTAs are narrower in scope as compared to CEPAs which have a wider scope. FTAs usually focus on reducing or eliminating tariffs on goods and may include limited provisions on services, CEPAs on the other hand cover trade in goods and services together with investment, intellectual property rights, competition policy, and government procurement. They also address customs procedures, mutual recognition of standards, and alignment of technical regulations which are usually treated lightly or excluded in conventional FTAs.
CEPAs commonly include provisions on digital trade, such as rules for electronic transactions and a commitment not to impose customs duties on electronic transmissions, which are often missing in FTAs. Moreover, CEPAs tend to facilitate temporary movement of businesspersons and professionals through visa arrangements or recognition of qualifications, supporting services trade and professional exchanges. A CEPA combines market access commitments with broader economic and regulatory cooperation across multiple sectors.
India’s engagement with CEPAs with other Countries
India has negotiated CEPAs in order to achieve trade policies that will help in the integration of its economy with global partners. These agreements are in general referred to as tools to diversify export markets, attract investment, and expand cooperation in services and investment. India has signed several CEPAs with major trading partners in Asia and the Middle East. It has so far signed CEPAs with four nations, each marking a different phase of India’s trade and economic policy.
The first agreement was the CEPA between India and South Korea, signed on August 7, 2009, which came into effect on January 1, 2010. The agreement covered significant tariff reductions (90 percent for Korean goods, percent for Indian goods), investment, and services. This agreement was an important step towards strengthening India’s economic engagement with East Asia. More on India-Korea CEPA: Embassy of India in Seoul, CEPA India.
The second agreement was the India- Japan CEPA, signed in February 2011 and effective from August 1, 2011. The CEPA led to a considerable liberalization of trade and investment, extending to goods, services in the IT, finance, and telecommunications sectors, movement of professionals, and intellectual property. It aimed at boosting economic ties, improve market access for Japanese goods in India, and facilitate technology transfer, strengthening the strategic partnership between the two countries. More on India-Japan CEPA: MOFA Japan, Embassy of India in Tokyo, India Trade Portal, Indo-Japan Business Council, World Trade Institute, Ministry of External Affairs, India.
The third agreement was the India- United Arab Emirates CEPA, signed in February 2022 and implemented from May 1, 2022. The aim was to boost bilateral trade and economic ties by reducing tariffs, opening services markets (like digital trade, finance, healthcare), and encouraging investment, with significant benefits for Indian labour-intensive exports (textiles, gems, pharma) and increased overall trade. More on India-UAE CEPA: PIB, Indian Embassy in the UAE
The most recent agreement is the India- Oman CEPA, signed on December 18, 2025. This agreement reflects India’s growing economic engagement with the Gulf region
Overview of the India–Oman CEPA
India and Oman signed a Comprehensive Economic Partnership Agreement on 18 December 2025 in Muscat. The agreement is designed as a wide ranging trade and economic framework covering goods, services, investment, and movement of professionals. It seeks to strengthen long standing economic relations between the two countries and provide a predictable and stable structure for future trade and investment flows.
Tariff Liberalisation and Market Access Commitments
Under the agreement, Oman has offered duty free access on about 98.08 percent of its tariff lines, which together account for around 99.38 percent of India’s current exports to Oman by value. India, in return, has agreed to liberalise tariffs on about 77.79 percent of its tariff lines, covering close to 94.8 to 95 percent of imports from Oman. For India, the significance of this structure lies in the fact that almost all products that India already exports to Oman will enter the Omani market at zero duty, improving price competitiveness for Indian exporters.
Key Beneficiary Sectors and MSME Impact
The sectors expected to benefit most on the Indian side are labour intensive and Micro, Small and Medium Enterprises (MSME) driven industries. These include textiles and ready made garments, gems and jewellery, leather and footwear, sports goods, plastics, furniture, engineering goods, pharmaceuticals, medical devices, and automobiles. Agricultural and selected food products where India already has an export presence in Oman are also covered for improved market access. The agreement highlights these sectors as important areas where tariff elimination can support export growth and employment in India.
Services Liberalisation and Investment Framework
The agreement details commitments on services, investment, and professional mobility. Oman has undertaken service commitments on a broad range of sub sectors, such as, computer related services, professional and business services, education, healthcare, research and development, and audio visual services. Indian companies are allowed to make investment with 100 percent foreign direct investment in major services sectors through commercial presence in Oman, which aims at helping Oman through the establishment of a long-term business presence and not just the provision of short-term services.
Professional Mobility and Movement of Natural Persons
An important advantage for India under the agreement is the mobility framework for Indian professionals and service providers. The quota for intra corporate transfer has been increased from 20 percent to 50 percent. The maximum allowed period of stay for contractual service providers has been extended significantly from the previous 90 days. The agreement also provides more flexible entry and residency conditions for certain professionals such as accountants, tax specialists, architects, and medical practitioners, which directly benefits Indian skilled workers and service firms operating in Oman.
Bilateral Trade Profile and Economic Context
Bilateral trade between India and Oman stood at around US$10.6 billion in 2024-25. India’s exports during this period were around US$4.06 billion while imports from Oman were at around US$6.5 billion. India mainly exports include petroleum products, processed minerals, aircraft and its parts, cosmetics and toiletries, and basmati rice. Whereas, the imports from Oman include crude oil, petroleum gases, fertilizers, ammonia, and related chemical products. Thus, the CEPA is positioned as a tool to expand and diversify this trade relationship beyond energy dominated flows.
Strategic Significance and Regional Integration
The agreement also carries strategic significance for India. Oman is located near the Strait of Hormuz and its logistics infrastructure are presented as offering Indian companies a base to access wider regional markets, including the Gulf Cooperation Council region, East Africa, and parts of Central Asia. The CEPA complements India’s existing trade arrangements in the Gulf and supports India’s objective of diversifying export destinations and reducing dependence on a limited set of markets.
Overall Impact for Indian Exporters and Service Providers
From India’s point of view, the agreement helps Indian exporters by reducing the overall cost of selling products in Oman, lower costs make Indian goods more competitive and allow exporters to earn better returns. It is very beneficial for MSMEs and employment intensive sectors. The parts of the agreement dealing with services and investment are presented as giving Indian companies more chances to establish a sustained presence in Oman, while the mobility commitments are framed as facilitating longer term project deployment and professional engagement. Together, these elements position the India- Oman CEPA as a comprehensive arrangement aimed at expanding India’s trade, services exports, and investment footprint in the region.
