India-Oman CEPA takes effect: 99% of Indian exports get duty-free access to Oman

The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman came into force on Monday, providing duty-free access to 99.38 per cent of India’s exports to the Gulf nation by value and opening new opportunities for sectors including textiles, engineering goods, gems and jewellery.

The agreement also includes enhanced mobility provisions for professionals, while Indian consumers are expected to benefit from cheaper Omani dates through quota-based duty concessions on imports of the fruit.

The implementation of the trade pact comes at a time when Indian exporters are facing challenges in shipping goods to Oman because of the US-Iran war.

Oman is one of the six Gulf Cooperation Council (GCC) countries, alongside Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE.

Under the agreement, India has granted duty concessions on 77.79 per cent of its total tariff lines, covering 12,556 product categories. These concessions account for 94.81 per cent of India’s imports from Oman by value.

For products that are of export interest to Oman and considered sensitive by India, the concessions are largely being offered through tariff-rate quotas (TRQs). These include products such as dates, marbles and petrochemical items.

The agreement provides duty-free access for 99.38 per cent of India’s exports to Oman by value, covering 98.08 per cent of Oman’s tariff lines.

To mark the agreement’s entry into force, the first consignments benefiting from preferential tariff treatment, including agriculture and gems and jewellery exports from Mumbai, Kolkata and Chennai, were flagged off.

Commerce and Industry Minister Piyush Goyal said: “With 99.38 per cent of India’s exports receiving duty-free access, the agreement unlocks new opportunities for our exporters and professionals to gain opportunities. Oman is our trusted partner, a bridge for our people and a gateway to the Gulf and East Africa.”

He added that the agreement would provide significant benefits to labour-intensive sectors, support job creation, encourage investment and enable Indian businesses to compete on equal terms with suppliers from countries that already enjoy preferential market access.

Bilateral trade between India and Oman reached USD 11.18 billion in FY 2025-26, compared with USD 10.61 billion in FY 2024-25.

According to the minister, the agreement is expected to boost MSMEs, manufacturing and employment by improving competitiveness in labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, marine products, engineering goods, processed foods and pharmaceuticals.

Many of these products previously faced a 5 per cent import duty in Oman, where tariff rates generally range from 5 per cent to 100 per cent.

Oman’s logistics hubs at Sohar, Duqm and Salalah are expected to provide Indian exporters with improved access to GCC and East African markets.

All zero-duty concessions under the agreement have come into effect immediately, offering greater certainty and competitiveness for Indian exporters.

Before the CEPA, only 15.33 per cent of India’s exports entered Oman duty-free under the Most Favoured Nation (MFN) regime. The agreement is expected to strengthen India’s position in Oman’s nearly USD 28 billion import market by improving price competitiveness.

India has, however, withheld duty concessions in several sectors to protect domestic farmers and MSMEs. These include agricultural products, gold and silver bullion, jewellery, footwear, sports goods, scrap of various base metals, dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather and spices.

In the pharmaceutical sector, the agreement provides binding zero-duty access for medicines, vaccines and pharmaceutical ingredients, including penicillins, streptomycins and tetracyclines.

Oman’s pharmaceutical market was valued at USD 302.84 million in 2025 and is projected to reach USD 473.71 million by 2031, growing at a compound annual growth rate of 6.6 per cent.

Products approved by the US Food and Drug Administration (USFDA), the European Medicines Agency, the UK’s Medicines and Healthcare products Regulatory Agency, and Australia’s Therapeutic Goods Administration will be eligible for marketing authorisation within 90 days without prior inspection. Where inspections are required, the target approval timeline is 270 working days.

The agreement also provides for acceptance of Good Manufacturing Practices (GMP) and inspection reports, reducing compliance requirements and helping Indian pharmaceutical exporters enter the Omani market more quickly.

Oman imported about USD 1.7 billion worth of electronics products in 2025, creating opportunities for Indian manufacturers.

India’s electronics exports to Oman stood at USD 146 million. The agreement provides full tariff certainty across electronics categories, including boards and cabinets, static converters and television reception apparatus.

In services, Oman has offered substantial commitments across sectors including computer-related services, business and professional services, audio-visual services, research and development, education and health services.

Bilateral services trade stood at USD 863 million in 2024, with India recording a surplus of USD 447 million. Oman’s total services imports were valued at USD 12.52 billion, of which India accounted for only 5.31 per cent.

For the first time, Oman has offered extensive commitments under Mode 4, covering the movement of skilled professionals. The quota for intra-corporate transferees has been increased from 20 per cent to 50 per cent. The permitted stay for contractual service suppliers has also been extended from 90 days to two years, with the possibility of a further two-year extension.

The provisions are expected to benefit nearly 6,000 India-Oman joint ventures.

Under the agreement, business visitors will be allowed to stay in Oman for up to 90 days, independent professionals for up to 180 days and intra-corporate transferees for up to four years.

The mobility provisions establish legally enforceable pathways for Indian professionals seeking opportunities in Oman.

Both countries have also agreed to hold future discussions on a social security agreement that could provide reciprocal continuity of social security benefits and help prevent dual contributions by Indian workers and employers in Oman.

The Oman agreement is the fifth trade pact implemented by India in the past five years, following agreements with the UAE, Mauritius, EFTA countries and Australia.

It is also the first bilateral trade agreement signed by Oman with any country since its agreement with the United States in 2006. Oman is India’s third-largest export destination among GCC countries.

India-Oman bilateral trade stood at about USD 10.5 billion in 2024-25, comprising exports worth USD 4 billion and imports worth USD 6.54 billion. The agreement is expected to generate an additional USD 2 billion in trade over the next two to three years.

Nearly 700,000 Indian nationals live in Oman, while India receives around USD 2 billion annually in remittances from the country.

More than 6,000 Indian establishments operate in Oman across multiple sectors. India has received USD 615.54 million in foreign direct investment from Oman between April 2000 and September 2025.