India and Oman took a significant step toward deepening bilateral economic cooperation by signing a Comprehensive Economic Partnership Agreement (CEPA) on Thursday, December 18, 2025. Under the landmark free trade agreement, India has secured zero-duty access on more than 99% of its exports to Oman, providing a major boost to Indian merchandise and services trade in the West Asian region.

The agreement was signed in Muscat by Union 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 Oman’s Sultan Haitham bin Tarik, highlighting the strategic importance both nations place on the partnership.

Zero-Duty Access for Indian Exports

Under the terms of the CEPA, Oman has agreed to provide India duty-free access on 98.08% of its tariff lines, which together account for 99.38% of India’s exports to Oman. This effectively means that almost all Indian goods exported to Oman will now enter the market without customs duties, enhancing price competitiveness for Indian exporters.

This move is expected to benefit a wide range of Indian industries, including manufacturing, engineering goods, chemicals, textiles, food products, and other merchandise categories that currently face tariff barriers.

India’s Tariff Liberalisation Commitments

In return, India has offered tariff liberalisation on 77.79% of its total tariff lines, covering 94.81% of what it imports from Oman. This reciprocal market access arrangement ensures balanced trade concessions while safeguarding sensitive domestic sectors.

Oman’s exports to India primarily include hydrocarbons and related products, along with certain industrial and mineral goods, which are expected to benefit from improved access to the Indian market.

Boost to Services Trade and Worker Mobility

Beyond merchandise trade, the India-Oman CEPA includes important concessions in the services sector, an area where India has a strong comparative advantage. The agreement is expected to improve market access for Indian service providers and enhance cooperation in professional and technical services.

Crucially, the deal also includes provisions related to the mobility of workers, which are expected to facilitate easier movement of skilled Indian professionals. This is particularly significant given the large Indian diaspora working across the Gulf region and Oman’s ongoing efforts to diversify its economy.

Bilateral Trade Snapshot

India and Oman already share a substantial trade relationship. In FY 2024-25, India exported $4.06 billion worth of merchandise to Oman, accounting for 0.93% of India’s total exports during the year.

During the same period, India imported goods worth $6.5 billion from Oman, which constituted 0.91% of India’s total imports. While trade volumes remain modest compared to India’s major trading partners, the CEPA is expected to significantly expand bilateral trade flows in the coming years.

Strategic Importance of the Agreement

The CEPA with Oman aligns with India’s broader strategy of strengthening economic engagement with the Gulf Cooperation Council (GCC) countries. Oman occupies a strategically important location along key maritime trade routes, making it a critical partner in India’s westward trade and energy security framework.

The agreement is also consistent with India’s objective of securing preferential trade access in high-potential markets while supporting domestic manufacturing and services exports.

Political and Diplomatic Significance

The presence of Prime Minister Narendra Modi and Sultan Haitham bin Tarik during the signing ceremony underscores the high-level political backing for the agreement. It reflects a shared commitment to elevating India-Oman relations beyond traditional trade into a comprehensive economic partnership.

The CEPA is expected to serve as a platform for deeper cooperation in investment, technology transfer, and industrial collaboration.

Expected Economic Impact

By eliminating tariffs on nearly all Indian exports to Oman, the agreement is expected to:

• Enhance competitiveness of Indian goods

• Encourage diversification of export baskets

• Strengthen supply chain integration

• Promote job creation in export-oriented sectors

For Oman, improved access to the Indian market supports its economic diversification goals and strengthens trade ties with one of the world’s fastest-growing major economies.

Conclusion: A Major Milestone in India-Gulf Trade Relations

The signing of the India-Oman CEPA marks a major milestone in India’s trade diplomacy, securing zero-duty access on over 99% of exports while opening new avenues for services trade and labour mobility. With strong political backing and balanced tariff commitments, the agreement is poised to significantly deepen bilateral economic engagement.

As implementation begins, the focus will shift to leveraging the agreement’s provisions to expand trade volumes, strengthen industrial ties, and unlock long-term economic benefits for both nations.

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