The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman marks a decisive upgrade in bilateral economic relations. Going well beyond tariff cuts, the agreement creates a structured framework for goods and services trade, investment, professional mobility, and regulatory cooperation—aimed at delivering predictable, long-term gains while protecting sensitive domestic interests.
Why the India–Oman CEPA matters
Bilateral trade reached USD 10.61 billion in FY 2024–25, up from USD 8.94 billion the previous year, signalling steady expansion. The CEPA builds on this momentum by offering near-universal market access, clearer rules, and faster regulatory pathways—especially valuable in a period of global protectionism and supply-chain realignments.
Crucially, India secures 100% duty-free access in Oman across 98.08% of tariff lines, covering 99.38% of India’s export value, with benefits effective from Day One. This immediately improves price competitiveness for Indian exporters who earlier faced duties of up to 5%.
India’s export gains: breadth with balance
The agreement opens opportunities across engineering goods, pharmaceuticals, agriculture and processed food, marine products, textiles, chemicals, electronics, plastics, and gems & jewellery. Oman’s import market—over USD 28 billion—now becomes more accessible through streamlined procedures and reduced compliance burdens.
At the same time, India has followed a calibrated liberalisation approach. While offering tariff concessions on 77.79% of its tariff lines (covering 94.81% of imports from Oman), it has maintained an exclusion list to protect sensitive sectors—particularly agriculture, key manufacturing chains, and MSME-heavy industries.
Engineering goods: anchor of trade expansion
Engineering exports to Oman stood at USD 875.8 million in FY 2024–25. Under the CEPA, all engineering products receive zero-duty access, replacing MFN tariffs of up to 5%. This is expected to push exports to USD 1.3–1.6 billion by 2030.
Iron and steel for infrastructure, industrial machinery, motor vehicles, and copper products are likely to see the strongest gains, benefiting MSMEs and supporting Oman’s diversification plans. Strategically, Oman also offers India a stable alternative market amid tightening trade conditions in the US and EU.
Pharmaceuticals: tariffs out, timelines down
Oman’s pharmaceutical market is import-dependent and growing rapidly. The CEPA provides zero-duty access for finished medicines, vaccines, and APIs, alongside regulatory fast-tracking. Products approved by stringent regulators such as USFDA, EMA, and UK MHRA can receive marketing authorisation within 90 days, sharply reducing time-to-market and compliance costs.
Agriculture and marine products: exports with safeguards
India already holds over 10% of Oman’s agricultural import market. Duty-free access strengthens India’s position in products such as boneless bovine meat, eggs, biscuits, butter, honey, and condiments—many of them labour-intensive.
At the same time, sensitive items like dairy, cereals, edible oils, and certain fruits and vegetables remain protected through exclusion or phased liberalisation, balancing export growth with food security and farmer interests.
Marine products also gain from immediate zero-duty access, opening scope to expand India’s currently modest share in Oman’s seafood imports—particularly shrimp and fish—supporting coastal employment.
Textiles, plastics, and gems: MSME-led benefits
Textiles now enjoy zero-duty entry, strengthening India’s competitiveness against suppliers from China, Bangladesh, Türkiye, and the UAE. This is expected to support employment across clusters such as Tirupur, Surat, Ludhiana, Panipat, and Bhadohi.
Plastics and plastic articles receive immediate duty-free access, providing up to a 5% price advantage in a USD 1 billion Omani market—important for MSME-driven manufacturing.
Gems and jewellery exports, already USD 35 million, are projected to grow by up to USD 150 million over three years, benefiting skilled and labour-intensive clusters across Gujarat, Rajasthan, Maharashtra, Tamil Nadu, and West Bengal.
Services, mobility, and investment: a step-change
Services are a major pillar, with bilateral trade of USD 863 million in 2024 and a large surplus for India. Oman has undertaken commitments across 127 services sub-sectors, including professional, IT, education, health, R&D, and tourism services.
Key mobility gains include:
- Raising the Intra-Corporate Transferees ceiling from 20% to 50%
- First-ever FTA commitments for defined categories of Indian professionals
- Binding assurances for Indian workers even in non-services sectors
Future negotiations on a Social Security Agreement aim to avoid dual contributions and ensure continuity of benefits.
Regulatory cooperation: cutting non-tariff barriers
The CEPA includes dedicated chapters on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) measures. In simple terms, these address how standards, testing, food safety, and plant/animal health rules are applied—often major hidden barriers to trade.
Mandatory acceptance of certificates issued by India’s Export Inspection Council, recognition of halal and organic certifications, and harmonised conformity assessments—especially in pharmaceuticals—reduce duplication, delays, and costs.
Why this agreement matters strategically
Beyond trade numbers, the CEPA positions Oman as a gateway for Indian firms to the GCC, West Asia, and East Africa, leveraging logistics hubs such as Sohar, Duqm, and Salalah. For India, it diversifies export markets, supports labour-intensive growth, and strengthens supply-chain resilience.
What to note for Prelims?
- CEPA vs FTA: scope and features
- India–Oman bilateral trade figures
- Meaning of TBT and SPS measures
- Duty-free market access under CEPA
What to note for Mains?
- Role of CEPAs in India’s trade strategy
- Balancing market access with domestic safeguards
- Impact of trade agreements on MSMEs and employment
- Services trade and professional mobility in FTAs
