India–Oman CEPA Signed: Duty-Free Access for 99% of Indian Exports, Major Boost for Trade and Services
Prime Minister Narendra Modi and Sultan Haitham bin Tarik are seen in this photo from a bilateral meeting in Muscat, Oman, on December 18, 2025. PMO through PTI/The Hindu
India and Oman on Thursday, December 18, 2025, signed a landmark Comprehensive Economic Partnership Agreement (CEPA) that is set to significantly deepen bilateral trade, services cooperation, and labour mobility between the two countries. Under the agreement, Oman will grant India duty-free access to 98.08% of its tariff lines, covering 99.38% of India’s exports to the Gulf nation.
India, in return, has committed to liberalised tariffs on 77.79% of its tariff lines, accounting for 94.81% of imports from Oman, marking one of India’s most ambitious trade pacts in the Gulf region.
The agreement was signed in Muscat by 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 Prime Minister Narendra Modi and Sultan Haitham bin Tarik.
Context: A Strategic Trade Pact in the Gulf
The India–Oman CEPA assumes significance at a time when India is actively expanding its economic footprint in the Gulf and beyond. This is Oman’s first bilateral trade agreement since its 2006 deal with the United States, and only the second CEPA India has signed with a Gulf Cooperation Council (GCC) country, after the UAE agreement in February 2022.
For India, the deal strengthens its trade architecture in West Asia while positioning Oman as a gateway to the wider GCC region, Eastern Europe, Central Asia, and Africa.
Trade Snapshot: India–Oman Economic Ties
India exported $4.06 billion worth of merchandise to Oman in 2024–25, accounting for 0.93% of India’s total exports. Imports from Oman stood at $6.5 billion, making up 0.91% of India’s total imports during the same period.
While the trade volume may appear modest, officials say the CEPA is designed to unlock long-term growth, diversification, and investment-led expansion rather than just short-term gains.
Prime Minister Modi: ‘Blueprint for the Future’
Addressing the India–Oman Business Forum earlier in the day, Prime Minister Narendra Modi described the agreement as a transformative step.
“The CEPA will infuse the India–Oman partnership in the 21st century with renewed faith and energy. This is a blueprint for our future. It will give our trade new vigour and new trust for investments and will open the doors of new opportunities in every sector,” the Prime Minister said.
He added that the agreement would generate new opportunities for growth, employment and innovation, particularly benefiting the youth of both nations.
Tariff Elimination to Benefit Labour-Intensive Sectors
According to the government, the CEPA will deliver full tariff elimination for several labour-intensive sectors, providing a major boost to employment generation and MSMEs.
Sectors expected to benefit include:
- Gems and jewellery
- Textiles and apparel
- Leather and footwear
- Sports goods
- Plastics and furniture
- Agricultural and marine products
- Engineering goods
- Pharmaceuticals and medical devices
- Automobiles
Taking to X after the signing, Piyush Goyal said the agreement would “significantly benefit labour-intensive sectors, strengthen MSMEs, artisans, and women-led enterprises, and create new employment opportunities.”
Sensitive Sectors Kept Outside the Deal
To protect domestic interests, India has excluded several sensitive sectors from tariff commitments. These include dairy products, tea, coffee, rubber, tobacco, gold and silver bullion, jewellery, and certain labour-intensive manufacturing segments such as footwear and sports goods, as well as scrap of base metals.
Officials said the exclusions ensure that domestic producers are shielded from sudden import surges while still allowing broader trade liberalisation.
Enhanced Mobility of Indian Professionals: A Key Highlight
One of the most significant aspects of the CEPA is its enhanced mobility framework for Indian professionals, marking a major shift in Oman’s labour policies.
According to the official release:
- The quota for Intra-Corporate Transferees has been increased from 20% to 50%
- The permitted stay for Contractual Service Suppliers has been extended from 90 days to two years, with the possibility of a further two-year extension
The agreement also offers more liberal entry and stay conditions for professionals in sectors such as accountancy, taxation, architecture, medical and allied services, facilitating deeper professional engagement.
Major Boost for India’s Services Sector
The CEPA includes a comprehensive and forward-looking services package, with Oman offering commitments across a wide range of sectors, including:
- Computer and IT services
- Business and professional services
- Audio-visual services
- Research and development
- Education
- Health services
Oman currently imports around $12.52 billion worth of services globally, with India accounting for 5.31% of that total — a figure expected to rise significantly following the agreement.
100% FDI Access and Future Social Security Talks
The agreement allows 100% Foreign Direct Investment (FDI) by Indian companies in major services sectors in Oman through commercial presence, opening new expansion avenues for Indian firms.
Both sides have also agreed to initiate future discussions on social security coordination, once Oman’s contributory social security system is fully implemented — a move expected to further benefit Indian workers.
Industry Reaction: Gateway to Wider Markets
Reacting to the agreement, Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII), said the pact enhances market access while creating a robust framework for services, investment, technology collaboration, and professional mobility.
Trade experts believe the CEPA will also improve supply chain resilience and strengthen India’s economic positioning in the Gulf.
Conclusion
The India–Oman CEPA represents a decisive step in India’s trade diplomacy, blending tariff liberalisation with services access and labour mobility. With strong safeguards for sensitive sectors and ambitious openings elsewhere, the agreement is expected to deliver sustained gains across merchandise trade, services, investment, and employment.
Final Thoughts from TheTrendingPeople
The India–Oman CEPA is more than a trade deal — it is a strategic bridge linking India to the Gulf and beyond. By combining market access with mobility and services liberalisation, the agreement positions both countries for long-term, inclusive growth in an increasingly competitive global economy.