Oman and India Sign Landmark CEPA Trade Agreement
The Sultanate of Oman and the Republic of India have forged a new chapter in their bilateral relationship with the signing of a landmark Comprehensive Economic Partnership Agreement (CEPA) on December 18, 2025, in Muscat. The agreement was signed by India's Commerce and Industry Minister Piyush Goyal and Oman's Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef, in the presence of Indian Prime Minister Narendra Modi and His Majesty Sultan Haitham bin Tarik.
This agreement represents a watershed moment for both nations—it is Oman's first bilateral trade agreement since its deal with the United States in 2006, and only India's second agreement with a Gulf Cooperation Council country, following the UAE pact signed in February 2022.
Unprecedented Market Access
Under the terms of the agreement, Oman has committed to granting India duty-free access on 98.08% of its tariff lines, covering an impressive 99.38% of India's exports to the Sultanate by value. In reciprocity, India has offered liberalized tariffs on 77.79% of its tariff lines, accounting for 94.81% of its imports from Oman.
Key product categories benefiting from reduced or eliminated tariffs include gems and jewelry, textiles, pharmaceuticals, automobiles, and engineering goods. For Oman, the agreement provides enhanced access to India's vast consumer market for petrochemicals, fertilizers, iron and steel, and energy sector products.
Services and Professional Mobility
Perhaps most significantly, the CEPA breaks new ground in services trade. Oman has made ambitious commitments across 127 sub-sectors—an unprecedented level of openness. The agreement provides for 100% Foreign Direct Investment by Indian companies in major services sectors in Oman through commercial presence.
For the first time, Oman has made extensive commitments under Mode 4 (movement of natural persons), raising the quota for intra-corporate transferees from 20% to 50%. The permitted duration of stay for contractual service suppliers has been extended from 90 days to two years, with the option to extend by a further two years.
Strategic Significance
The CEPA carries profound strategic implications beyond trade. Oman occupies a critical position along the Strait of Hormuz, a vital maritime corridor through which a significant portion of global energy shipments transit. By strengthening economic ties with Muscat, India gains a deeper foothold in a region where global power competition increasingly intersects with energy geopolitics.
Bilateral Trade Context
Bilateral trade between India and Oman reached approximately US$10.6 billion in FY 2024-25, with India running a trade deficit largely due to energy and fertilizer imports. Projections suggest Indian exports could increase by over $2 billion within two to three years of implementation.
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