India-Oman CEPA Comes into Force: A New Chapter in Economic Partnership and Shared Prosperity

The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman officially entered into force today, ushering in a promising era of deeper economic collaboration between the two nations. Signed in December 2025 during Prime Minister Narendra Modi’s visit to Muscat, the agreement is expected to significantly enhance bilateral trade, create new opportunities for Indian exporters, and strengthen people-to-people ties.

Union Commerce and Industry Minister Piyush Goyal has described the CEPA not merely as a trade deal but as a “statement of civilisational trust” between India and Oman, reflecting their longstanding historical and cultural connections. In his recent writings and statements, Goyal emphasised that the pact will open global markets for Indian workers, artisans, farmers, and entrepreneurs while fostering job creation and inclusive growth.

India's Commerce and Industry Minister Piyush Goyal. File/AFP | Firstpost

Extensive Market Access for Indian Exports

A cornerstone of the agreement is the generous tariff liberalisation extended by Oman. Under the CEPA, Indian exporters will enjoy 100% duty-free access across 98.08% of Oman’s tariff lines, covering approximately 99.38% of India’s current export value to the country. This represents a substantial improvement from the previous arrangement, where only about 15.3% of Indian exports entered Oman duty-free.

Goods previously facing import duties of up to 5%, valued at around $3.64 billion, are now positioned to become far more competitive in the Omani market. This immediate benefit is anticipated to drive export growth across a wide range of sectors, including textiles and apparel, leather and footwear, gems and jewellery, engineering goods, automobiles, pharmaceuticals, plastics, furniture, marine products, and processed foods.

The agreement is particularly advantageous for labour-intensive industries, which are expected to witness increased demand and expanded production capacities as they integrate more deeply into regional supply chains.

Benefits for MSMEs and Employment Generation

Micro, small, and medium enterprises (MSMEs) stand to gain significantly from the CEPA. Many of these businesses operate in clusters across India, such as those in Tirupur, Surat, Ludhiana, Jaipur, Coimbatore, and Ahmedabad. With improved market access, these enterprises can scale operations, boost production, and generate additional employment opportunities.

Sectors dominated by MSMEs, including gems and jewellery, handicrafts, and textiles, are projected to see notable expansion. For instance, the gems and jewellery sector alone could generate additional exports worth up to $150 million over the next three years. By facilitating greater participation in international trade, the agreement supports the government’s broader objective of empowering small businesses and creating sustainable livelihoods.

Balanced Approach Protecting Sensitive Domestic Sectors

While pursuing ambitious export growth, India has adopted a thoughtful and calibrated strategy to safeguard its vulnerable industries. The country has extended tariff concessions on 77.79% of its tariff lines, covering around 94.81% of imports from Oman by value. Critical agricultural products such as rice, wheat, dairy, tea, coffee, and edible oils have been protected through exclusions or limited access via tariff-rate quotas.

This balanced framework ensures that the benefits of enhanced trade do not come at the expense of Indian farmers or sensitive manufacturing sectors, maintaining harmony between openness and domestic priorities.

Opportunities in Services, Pharmaceuticals, and Mobility

The CEPA extends beyond goods trade to encompass services, investment, and regulatory cooperation. In the pharmaceutical sector, medicines approved by leading global regulators like the USFDA, EMA, UK MHRA, and TGA can now secure marketing approval in Oman within 90 days, accelerating market entry for Indian drug manufacturers.

Indian professionals in fields such as information technology, healthcare, education, engineering, architecture, and consulting will enjoy greater access to the Omani market. The agreement also enhances professional mobility by increasing the quota for intra-corporate transferees from 20% to 50% and allowing extended stay periods for contractual service suppliers. Additionally, Oman’s recognition of India’s National Programme for Organic Production (NPOP) certification will provide a strong push for organic food exports.

Strengthening Bilateral Ties and Strategic Cooperation

Bilateral trade between India and Oman has shown steady growth, reaching approximately USD 11.18 billion in FY 2025-26. With nearly 700,000 Indians residing in Oman and contributing around USD 2 billion in annual remittances, the economic and human linkages between the two countries run deep. The CEPA is expected to further elevate trade volumes, with some estimates projecting a potential 50% increase in the coming years.

Strategically, the agreement bolsters India’s energy security through reliable access to Omani petroleum products and positions Oman as a vital gateway to the broader Gulf Cooperation Council (GCC) market. It also promotes supply chain resilience and aligns with Oman’s Vision 2040 for economic diversification.

The MGMM Outlook 

The India-Oman CEPA coming into force marks a significant milestone in strengthening economic cooperation between two nations connected by centuries of trade, cultural exchange, and mutual trust. The agreement provides Indian exporters with unprecedented access to the Omani market, opening new opportunities for sectors such as textiles, pharmaceuticals, engineering goods, gems and jewellery, automobiles, and processed foods. By granting duty-free access to the vast majority of Indian exports, the pact enhances India's competitiveness in the Gulf region and creates a strong foundation for expanding trade volumes in the years ahead. The agreement also highlights India's growing role as a global manufacturing and export hub while reinforcing economic engagement with key strategic partners in West Asia.

The benefits extend beyond large industries, offering substantial opportunities for MSMEs, artisans, farmers, and skilled professionals across India. Improved market access is expected to boost production, encourage entrepreneurship, and generate employment in industrial clusters that form the backbone of India's economy. At the same time, the agreement maintains a balanced approach by protecting sensitive agricultural and domestic sectors, ensuring that economic liberalisation does not compromise national interests. Enhanced mobility for professionals, faster approval pathways for pharmaceutical products, and recognition of Indian organic certifications further strengthen the scope of cooperation. The CEPA reflects a pragmatic and forward-looking partnership that supports economic growth, supply chain resilience, energy security, and deeper people-to-people ties between India and Oman.

(Sources: Firstpost, Indian Express, Economic Times)