India-Oman CEPA

India-Oman CEPA

Context

  • India and Oman share commercial and maritime links dating back thousands of years through spices, textiles and frankincense trade. The India-Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on June 1, 2026.
  • Bilateral trade has grown from USD 8.94 billion in FY2023-24 to USD 11.18 billion in FY2025-26. The Oman CEPA follows India’s agreements with UAE, Australia, EFTA, UK, New Zealand and the European Union.

About the CEPA

  • Tariff Coverage: Oman offers duty-free access on 98.08% of tariff lines covering 99.38% of India’s exports by value.
  • Pre-CEPA Status: Only 15.33% of India’s exports entered Oman at zero duty under the Most Favoured Nation regime earlier.
  • Services Trade: Bilateral services trade stood at USD 863 million in 2024 with India enjoying a surplus of nearly USD 447 million.
  • Professional Mobility: Oman has made binding commitments for Indian professionals in accounting, engineering, IT, healthcare, education and consulting.
  • Trade Facilitation: Oman will accept India’s Export Inspection Council certificates eliminating duplicative testing and inspections entirely.
  • Certification Recognition: India’s NPOP organic and halal certification systems have been formally recognised by Oman under this agreement.
  • Healthcare Opportunity: Provisions for AYUSH and traditional medicine create new opportunities for Indian wellness services in the Gulf.

Advantages

  • Textiles: India holds 43% of woven and 31% of knitted apparel imports in Oman and removal of 5% tariff strengthens competitiveness against China.
  • Chemicals: India already supplies 39% of Oman’s inorganic chemical imports and tariff-free access will amplify this position further.
  • Engineering Goods: Oman imports USD 3.7 billion in machinery and USD 3.3 billion in automotives annually where India’s share remains very low.
  • Pharmaceuticals: Fast-tracked regulatory approvals for internationally certified products will reduce compliance costs and accelerate market entry for Indian companies.
  • Strategic Location: Oman’s ports at Sohar, Duqm and Salalah serve as gateways to the wider GCC region and East African economies.
  • Regional Diversification: The CEPA strengthens India’s presence in a region central to its energy security, trade and strategic interests.

Persisting Issues

  • India’s share in Oman’s global services imports remains just over 5% indicating significant untapped potential that still needs to be realised.
  • Engineering goods market share in Oman is only 5% for machinery and 2% for automotives reflecting very limited penetration currently.
  • Sensitive sectors including dairy, cereals, edible oils and several agricultural commodities have been kept outside tariff concessions to protect domestic producers.
  • The real test lies in implementation and utilisation by Indian businesses to actually convert opportunities into tangible export growth.

Way Forward

  • Leverage Tariff Benefits: Indian exporters must actively utilise duty-free access across textiles, chemicals and engineering goods sectors immediately.
  • Pharmaceutical Expansion: Indian companies should fast-track regulatory filings to capture a larger share of Oman’s growing pharmaceutical market.
  • Services Growth: India must actively promote IT, healthcare and professional services to increase its current 5% share in Oman’s services imports.
  • Gateway Strategy: Indian businesses should treat Oman’s strategic ports as hubs for deeper integration with GCC and East African markets.

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