India and Oman energize a new Trade Gateway through a landmark Comprehensive Economic Partnership Agreement (CEPA)

Why in News?

The India–Oman Comprehensive Economic Partnership Agreement (CEPA) came into force on 1 June 2026.

It marks a major step in India’s trade diplomacy with the Gulf region. The agreement is expected to boost exports, create jobs, help MSMEs, support farmers and fishermen, and expand opportunities for Indian professionals in Oman.

The agreement is also important because Oman acts as a strategic gateway to the wider GCC region and East Africa through its ports such as Sohar, Duqm and Salalah.

Background of India–Oman Relations

India and Oman share old civilisational, commercial and people-to-people ties. Indian merchant families have lived in Oman for nearly 200–300 years.

Today, Oman is home to nearly 7 lakh Indians. Indian workers and professionals contribute to Oman’s economy, while remittances from Oman support many Indian families.

Oman is also India’s second-largest trading partner in the Gulf region. Bilateral trade between India and Oman reached USD 11.18 billion in FY 2025–26, showing steady growth in economic relations.

What is CEPA?

A Comprehensive Economic Partnership Agreement (CEPA) is a trade agreement between two countries that goes beyond simple tariff reduction.

It usually covers:

• Trade in goods
• Trade in services
• Investment
• Professional mobility
• Regulatory cooperation
• Customs procedures
• Non-tariff barriers
• Standards and certification

The India–Oman CEPA is therefore not only a tariff agreement. It creates a broader economic partnership between the two countries.

Key Features of India–Oman CEPA

1. Duty-Free Access for Indian Exports

• The agreement provides duty-free access for 99.38% of India’s exports to Oman by value. It covers 98.08% of Oman’s tariff lines.
• Earlier, only about 15.33% of India’s exports entered Oman at zero duty under the MFN system. After CEPA, Indian exporters will get a major price advantage in Oman’s market.

2. Immediate Tariff Benefits

• All zero-duty concessions under the agreement have come into effect immediately. This gives certainty to exporters and allows them to plan long-term trade strategies.

3. Boost to Labour-Intensive Sectors

The agreement is expected to benefit sectors that create large employment in India, such as:

• Textiles
• Leather and footwear
• Marine products
• Gems and jewellery
• Food processing
• Engineering goods
• Pharmaceuticals
• Automobiles

4. Services and Professional Mobility

Oman has made commitments in 127 services sub-sectors. This is important for Indian professionals, startups and service providers.

Sectors that may benefit include:

• IT services
• Engineering
• Healthcare
• Education
• Accounting
• Construction
• Tourism
• Research and development
• Environmental services

5. Faster Market Access for Pharmaceuticals

• Indian medicines approved by regulators such as USFDA, EMA, UK MHRA and TGA will receive marketing authorisation in Oman within 90 days.
• This will help Indian pharmaceutical companies enter the Omani market faster.

Sector-wise Benefits for India

Agriculture and Processed Food

India will benefit in products such as:

• Honey
• Sweet biscuits
• Cashew kernels
• Basmati rice
• Butter
• Eggs
• Condiments
• Mangoes
• Processed food items

India is already a major agricultural supplier to Oman. Duty elimination will make Indian farm and processed food products more competitive.

The agreement also recognises India’s National Programme for Organic Production (NPOP) certification. This will help Indian organic farmers access Oman’s food market.

Marine Products and Fisheries

Marine products have large untapped potential in Oman.

Indian seafood products such as shrimp, fish and frozen cuttlefish will receive duty-free access. This can benefit coastal states such as:

• Andhra Pradesh
• Kerala
• Tamil Nadu
• Gujarat

The marine export sector can create jobs in fishing, processing, cold-chain logistics, packaging and export operations.

Gems and Jewellery

India has strong capabilities in cut and polished diamonds, gold jewellery, silver jewellery and handmade jewellery.

Under CEPA, import duties on gems and jewellery have been removed. This gives Indian exporters a competitive advantage over suppliers from countries such as Italy, Turkey, Thailand and China.

Important jewellery clusters that may benefit include:

• Surat
• Jaipur
• Mumbai
• Kolkata
• Chennai

The sector is expected to create new employment opportunities for artisans, designers, workers and small manufacturers.

Textiles and Apparel

Textiles and apparel are labour-intensive sectors. The agreement can increase demand for Indian textiles in Oman.

Major textile clusters that may benefit include:

• Tirupur
• Surat
• Ludhiana
• Panipat
• Coimbatore
• Karur
• Bhadohi
• Moradabad
• Jaipur
• Ahmedabad

Increased exports can help weavers, artisans, garment workers and MSMEs.

Leather and Footwear

The leather and footwear sector is another employment-intensive sector.

The CEPA can help leather clusters in:

• Tamil Nadu
• Uttar Pradesh
• West Bengal
• Maharashtra
• Punjab
• Karnataka
• Madhya Pradesh

Removal of tariff barriers can improve India’s export competitiveness in footwear, leather goods and related products.

Pharmaceuticals and Healthcare

• India is known as the “pharmacy of the world” because it supplies affordable medicines to many countries.
• The CEPA provides zero-duty access for medicines, vaccines and pharmaceutical ingredients. Faster regulatory approval will reduce delays and compliance burden.
• This is important because Oman’s pharmaceutical market is expected to grow in the coming years. Indian pharma companies can use this opportunity to expand in the Gulf healthcare market.
• The agreement also creates space for cooperation in traditional medicine, including joint research.

Engineering Goods and Electronics

All engineering products will receive zero-duty access in Oman.

Important products include:

• Machinery
• Electrical equipment
• Iron and steel
• Automobiles
• Industrial machinery
• Copper products
• Electronics components

This can benefit Indian manufacturers, including firms working under the Production Linked Incentive (PLI) framework.

Engineering exports to Oman may increase because Indian products will become more price competitive.

Services and Mobility

The services part of the agreement is highly significant.

Oman has given wide commitments in areas such as:

• Computer and IT services
• Professional services
• Healthcare
• Education
• Construction
• Financial services
• Tourism
• Telecommunications

Indian professionals such as doctors, engineers, teachers, accountants, IT experts and consultants are expected to benefit.

The agreement also provides improved temporary entry for:

• Business visitors
• Independent professionals
• Contractual service suppliers
• Intra-corporate transferees

The ceiling for intra-corporate transferees has been raised from 20% to 50%. This will help Indian companies operating in Oman.

Benefits for MSMEs

The India–Oman CEPA is especially important for MSMEs because many beneficiary sectors are dominated by small and medium enterprises.

MSMEs in textiles, leather, footwear, processed foods, gems and jewellery, marine products, engineering goods and industrial equipment may get larger international orders.

This can lead to:

• Higher production
• More exports
• New investment
• Job creation
• Better integration with global value chains

For small businesses, duty-free access can reduce price disadvantage and help them compete with larger foreign firms.

Benefits for Farmers and Fishermen

The agreement creates opportunities for farmers by improving market access for agricultural and processed food products.

It may increase demand for Indian farm produce such as honey, butter, eggs, cashews, mangoes and processed foods.

Fishermen and coastal communities may benefit from higher exports of shrimp, fish and cuttlefish. This can create livelihood opportunities in fishing, cold storage, processing and export logistics.

At the same time, India has protected sensitive agricultural products from tariff concessions.

Strategic Importance of Oman for India

Oman has high strategic value for India because of its location.

It is close to:

• Persian Gulf
• Arabian Sea
• Gulf of Oman
• East African markets
• Wider GCC region

Oman’s ports at Sohar, Duqm and Salalah can help India expand trade connectivity with the Gulf and East Africa.

This is important at a time when global supply chains are being restructured and countries are looking for trusted trade partners.

The agreement also strengthens India’s Act West policy and deepens India’s engagement with West Asia.

Safeguards for Indian Farmers and Domestic Industry

India has followed a calibrated approach. It has not given tariff concessions for several sensitive products.

Protected products include:

• Dairy
• Cereals
• Fruits
• Vegetables
• Edible oils
• Oilseeds
• Rubber
• Leather
• Spices
• Key agricultural products

This is important to protect Indian farmers, food security and rural livelihoods.

The agreement also includes mechanisms such as Tariff Rate Quotas and Minimum Import Price for selected sensitive products.

Trade Facilitation Measures

The CEPA also aims to reduce non-tariff barriers.

Important measures include:

• Acceptance of certificates issued by India’s Export Inspection Council
• Recognition of India’s organic certification system
• Recognition of halal certification systems
• SPS and TBT cooperation
• Faster clearance for perishable goods
• Reduced duplicative testing and inspection

These steps can lower transaction costs and make exports faster and easier.

Significance of the Agreement

1. Strengthens India’s Gulf Policy

• The agreement deepens India’s economic engagement with the Gulf region. It also complements India’s existing ties with the UAE and other West Asian countries.

2. Supports Viksit Bharat 2047

• By increasing exports, jobs, investment and competitiveness, CEPA supports India’s long-term goal of becoming a developed economy by 2047.

3. Promotes Export Diversification

• Indian exporters can reduce dependence on traditional markets and access new opportunities in Oman, GCC and East Africa.

4. Helps Labour-Intensive Sectors

• Sectors such as textiles, leather, gems and jewellery, marine products and food processing employ many workers. Growth in these sectors can support inclusive employment.

5. Boosts Services Exports

• Oman’s services commitments can help Indian professionals and startups expand their presence in the Gulf region.

6. Strengthens MSME Competitiveness

• Lower tariffs and easier market access can help small businesses participate in international trade.

Challenges and Concerns

1. Limited Market Size of Oman

• Oman is strategically important, but its domestic market is smaller than larger economies. India must use Oman as a gateway to GCC and East Africa.

2. Competition from Other Countries

• Indian exporters will face competition from countries such as China, Turkey, Thailand and European exporters.

3. Quality and Standards Compliance

• Indian firms must meet Omani quality, safety, packaging and certification standards.

4. Logistics and Awareness Issues

• Many MSMEs may not know how to use FTA benefits. They need guidance on rules of origin, documentation and export procedures.

5. Risk of Import Pressure

• Though India has protected sensitive sectors, continuous monitoring is needed to prevent harm to domestic producers.

6. Dependence on External Demand

• Export-led growth depends on external market conditions. Global slowdown or regional instability may affect trade.

Way Forward

India should take the following steps to fully use the CEPA:

• Create awareness among MSMEs about tariff benefits.
• Provide simple guidance on rules of origin and documentation.
• Strengthen export infrastructure and logistics.
• Help farmers and fishermen access export markets through cooperatives and FPOs.
• Improve quality testing, packaging and certification facilities.
• Promote Indian brands in Oman and the wider Gulf region.
• Use Oman’s ports to expand trade with East Africa.
• Encourage startups and service firms to enter Omani markets.
• Monitor import flows to protect sensitive domestic sectors.
• Link CEPA with India’s broader manufacturing and export strategy.

Conclusion

The India–Oman CEPA is an important milestone in India’s trade diplomacy. It provides wide market access for Indian goods, opens opportunities for services and professionals, and strengthens India’s strategic presence in the Gulf region.

The agreement can benefit farmers, fishermen, artisans, MSMEs, startups and professionals. It also supports India’s goals of export diversification, job creation, manufacturing growth and integration with global value chains.

In a world marked by protectionism and supply-chain uncertainty, the India–Oman CEPA shows India’s confidence in building prosperity through partnerships, competitiveness and global engagement.