India-Oman CEPA Comes Into Force, Expanding Trade and Market Access

Fifth trade pact implemented under the Modi government provides wider tariff concessions, services access and stronger economic engagement between India and Oman

The India-Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on June 1, marking a new phase in bilateral economic relations between the two countries. The agreement is expected to expand market access, strengthen trade flows and enhance cooperation across goods, services and investment.

India and Oman will formally bring into effect the Comprehensive Economic Partnership Agreement (CEPA) from June 1.

The agreement becomes the fifth free trade agreement (FTA) implemented under the Modi government. Since 2014, India has implemented trade agreements with Mauritius (April 2021), Australia (December 2022), the UAE (May 2022), and EFTA (October 2025, comprising Switzerland, Iceland, Liechtenstein and Norway).

India has also signed trade agreements with the UK in July 2025 and New Zealand in April 2026. In addition, it announced the conclusion of negotiations with the European Union, a 27-nation bloc, on January 27 this year.

CEPA and FTA: Understanding the Framework

The terms CEPA and FTA are often used interchangeably. Modern trade agreements generally include multiple chapters covering trade in goods, trade in services, investment, intellectual property rights, customs procedures and dispute settlement mechanisms.

Other trade agreement formats include the Comprehensive Economic Cooperation Agreement (CECA), Comprehensive Economic Trade Agreement (CETA) and Economic Cooperation and Trade Agreement (ECTA).

India-Oman Trade Snapshot

During 2025-26, bilateral trade between India and Oman stood at $11.18 billion, comprising exports worth $4.02 billion and imports valued at $7.16 billion. This compares with total trade of $10.61 billion in 2024-25.

India’s services exports to Oman increased from $397 million in 2020 to $665 million in 2024. Major export segments included telecommunications, computer and information services, transport and travel.

Imports of services from Oman rose from $101 million in 2020 to $197.7 million in 2024, led by transport, travel, telecom and other business services.

Market Access Gains for India

Under the CEPA, India receives 100 per cent duty-free market access for exports covering 98.08 per cent of Oman’s tariff lines and 99.38 per cent of trade value, based on the 2022-23 average.

Indian exports currently facing a 5 per cent duty on goods worth $3.64 billion will benefit from the agreement. All zero-duty concessions take effect from the first day of implementation.

At present, only 15.33 per cent of India’s export value, representing 11.34 per cent of tariff lines based on the 2022-24 average, enters Oman at zero duty under the Most Favoured Nation (MFN) regime.

The agreement is expected to create opportunities across minerals, chemicals, base metals, machinery, plastics and rubber products, transport equipment, instruments, glass, ceramics, marble and paper products.

Key Sectoral Benefits

Oman will provide zero-duty access to several Indian sectors including iron and steel, electric machinery, marine products, industrial machinery and copper products.

The removal of the 5 per cent tariff is expected to improve the competitiveness of Indian vehicles. The agreement also grants binding zero-duty access for finished medicines and vaccines.

Protection for Sensitive Domestic Sectors

India has placed 2,789 tariff lines in the exclusion list under the CEPA to protect domestic industries. These include transport equipment, major chemicals, cereals, fruits and vegetables, spices, coffee, tea and animal-origin products.

Sensitive value-chain sectors such as rubber, leather, textiles, footwear, petroleum oils and mineral-based products have also been protected.

Strategic agricultural sectors including dairy products, meat, cereals, oilseeds, vegetable oils, sugar and food-processing residues remain outside the tariff liberalisation framework.

Services Sector Commitments

Oman’s global services imports reached $12.52 billion in 2024, with India accounting for 5.31 per cent of that total.

The agreement includes commitments on temporary entry and stay for service providers. The ceiling for Intra-Corporate Transferees (ICT) has been increased from 20 per cent to 50 per cent, allowing Indian companies to deploy additional managerial and specialist personnel.

For the first time under any FTA, Oman has also undertaken commitments covering a defined category of professionals in accounting, engineering, medical services, information technology, education, construction and consulting.

Benefits for Agriculture and Food Products

Products including natural honey, cashew, potatoes, boneless meat and bakery products will receive duty-free access to the Omani market.

Oman has also agreed to remove duties on several animal and food products, including cheese, curd, milk and cream, frozen fish, butter, meat, yoghurt, bread, pastries, cakes, chocolates, sugar confectionery, mineral water and animal and vegetable fats and oils. These products currently attract duties ranging from 5 per cent to 100 per cent.

Indian consumers are expected to benefit from lower-cost imports of Omani dates, with India providing zero-duty access to 2,000 tonnes annually.

India is also extending concessions to Oman’s traditional products, Gum Arabica, used in food, medicines and cosmetics, and Frankincense, used in the incense and perfume industries.

Concessions for Oman

India is offering duty concessions on 77.79 per cent of its total tariff lines, equivalent to 12,556 tariff categories. These concessions cover 94.81 per cent of India’s imports from Oman by value.

For products considered sensitive for India while remaining important for Oman’s exports, the arrangement largely follows a tariff-rate quota (TRQ) model. These include products such as dates, marble and petrochemical goods.

Strategic Importance in the Middle East

India’s economic engagement with the Gulf region has expanded steadily. Following the implementation of the India-UAE trade agreement in May 2022, discussions with Qatar are expected to begin soon.

India and the Gulf Cooperation Council (GCC)—comprising Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain—have also agreed on terms of reference for future trade negotiations.

Oman holds strategic importance due to its location along the Strait of Hormuz, a major maritime route for global oil trade. The country serves as a gateway for Indian goods and services to wider Middle Eastern and African markets.

Nearly 7 lakh Indian nationals reside in Oman, and India receives around $2 billion in annual remittances from the country.

More than 6,000 Indian establishments operate across sectors in Oman. India has received $615.54 million in foreign direct investment from Oman between April 2000 and September 2025.

The CEPA is also significant as it is the first bilateral agreement signed by Oman with any country since its trade agreement with the United States in 2006. Oman remains India’s third-largest export destination among GCC countries.