India-Oman CEPA: Strengthening Trade Links Between South Asia and the Gulf

On 18 December, India and Oman officially signed the Comprehensive Economic Partnership Agreement (CEPA), marking a significant milestone in deepening economic and investment ties between India and the Gulf region. The agreement provides extensive tariff reductions for Indian exports, opens up access across 127 services sectors, and introduces a smoother framework for the movement of skilled professionals. Together, these measures reflect a commitment to regulatory transparency and more efficient cross-border operations.

The CEPA carries strategic significance beyond trade. It is only the second bilateral free trade deal Oman has signed, after the United States, positioning the country as a key partner in India’s export strategy. The agreement also strengthens the longstanding economic interdependence between the two nations, as India continues to import vital petrochemical and energy resources from Oman, ensuring supply security and fostering long-term economic alignment.

What Makes India-Oman CEPA Unique

This CEPA stands out due to the extensive market access it provides, setting a high benchmark for India’s recent trade agreements. Indian exporters now enjoy zero-duty access on 98.08% of Oman’s tariff lines, which accounts for around 99.38% of India’s exports by value. This broad tariff elimination offers immediate cost benefits for export-oriented businesses.

Beyond tariff cuts, the CEPA promotes predictable and commercially viable operations. By combining liberalisation of goods with access to services and supportive frameworks, it enhances certainty for multinational companies considering Oman as a regional hub and India as a scalable production base. The agreement is more than a trade facilitation tool—it provides a platform for strategic investment planning, regional market penetration, and supply chain optimisation between India and the Gulf.

Types of Trade Agreements

India’s Expanding FTA Network

The India–Oman CEPA is part of India’s growing series of bilateral trade agreements aimed at improving market access and integrating with global supply chains. Recent milestones include the Comprehensive Economic and Trade Agreement with the United Kingdom and the 2024 pact with the European Free Trade Association (covering Switzerland, Norway, Iceland, and Liechtenstein).

India has also secured key deals in the Indo-Pacific and Middle East, such as the ECTA with Australia and the CEPA with the United Arab Emirates, both signed in 2022. Building on this progress, India is negotiating with the European Union and the United States, reinforcing its path toward deeper global trade integration.

Current India–Oman Trade Relations

India and Oman already maintain a strong and growing trade relationship, providing a solid foundation for the CEPA. As of September 2025, India’s exports to Oman reached USD 515 million, while imports were USD 467 million, yielding a trade surplus of USD 47.3 million. Year-on-year, exports grew 30.7%, from USD 394 million to USD 515 million, and imports increased by 7.39%, reflecting steady commercial engagement.

The trade portfolio is concentrated in energy and industrial goods. India’s top exports include petroleum products worth USD 303 million, iron and steel products at USD 24.3 million, and processed minerals at USD 23 million. This complementarity provides a robust base for future diversification and scaling under the CEPA.

Sector-Specific Gains Under CEPA

The agreement delivers significant advantages across sectors, particularly through wide-ranging access for Indian goods. Zero-duty access on 98.08% of Oman’s tariff lines, representing 99.38% of India’s exports by value, immediately enhances competitiveness and reduces costs for exporters.

Labour-intensive sectors like textiles, leather, footwear, gems and jewellery, engineering goods, plastics, furniture, agricultural products, pharmaceuticals, medical devices, and automobiles will benefit from preferential treatment, fostering export growth and employment across MSMEs, artisan clusters, and women-led enterprises. For global companies sourcing or manufacturing in India, the agreement enhances the viability of India-based supply chains serving the Gulf region.

Textiles, which constitute a large portion of India’s exports, are likely to gain from improved price competitiveness. More broadly, the CEPA supports India’s strategic aim of diversifying trade in West Asia and reducing reliance on traditional markets. Oman’s interest in emerging sectors such as food processing and space technology also opens avenues for long-term, high-value economic collaboration.

The agreement also introduces predictability for trade and supply chain planning. Tariff concessions and reduced exposure to future barriers allow multinationals to make long-term decisions regarding regional hubs, procurement, and export-oriented production. With Oman’s strategic location and India’s manufacturing scale, the CEPA serves as a platform for regional market access, supply chain efficiency, and sustainable growth.

Key Features of the India–Oman CEPA

The agreement, signed in Muscat, offers mutually beneficial market access. Oman provides duty-free access on 98.08% of its tariff lines, covering 99.38% of India’s exports by value, while India liberalises 77.79% of its tariff lines, accounting for 94.81% of imports from Oman. This reciprocity increases trade predictability and reduces cross-border cost friction.

Oman’s strategic location enhances the agreement’s value, acting as a gateway to the GCC, Eastern Europe, Central Asia, and Africa. Its existing FTA with the United States provides additional access advantages, making the CEPA relevant for multinational companies seeking diverse market opportunities through the India–Oman corridor.

Commodities: Coverage and Exceptions

Indian exporters benefit from near-complete tariff elimination in Oman, improving cost competitiveness and positioning India as a preferred sourcing base for Gulf markets. Multinationals can leverage India’s manufacturing and procurement capabilities to supply Oman and surrounding regions more efficiently.

India has maintained a selective approach for certain sensitive products, either excluding them or phasing in tariff reductions. This approach safeguards domestic priorities while ensuring overall balance, giving companies clarity on import exposure and supply chain planning into India.

Implications for Companies in Oman

India liberalises tariffs on a substantial share of imports from Oman, covering the majority of trade value. Certain product lines are exempt, reflecting domestic industry protection and revenue considerations. This framework allows Omani and foreign companies to make informed decisions on product selection, pricing, and entry into India.

Overall, the CEPA provides extensive market access combined with regulatory certainty, enabling foreign investors to structure cross-border trade, sourcing, and distribution efficiently across India, Oman, and the region.

Enhanced Professional Mobility (Mode 4)

A notable feature of the India–Oman CEPA is the enhanced framework for the mobility of professionals, representing one of India’s most progressive Mode 4 commitments. This streamlined approach not only facilitates the transfer of skilled talent between the two countries but also creates new opportunities for businesses to expand operations and investments efficiently. Companies looking to enter or scale in India can benefit from the guidance of a professional Company registration consultant in India to navigate regulatory requirements and ensure smooth establishment.