CEPA between India and Oman: Free trade pact signed with broad tariff reductions and access to services; Most important things to know – The Times of India

India and Oman on Thursday signed a Comprehensive Economic Partnership Agreement (CEPA) that provides duty-free access to over 98% of India’s exports to Oman.India agreed to reduce tariffs on certain Omani products such as dates, marbles and petrochemicals. The agreement is expected to come into effect from the first quarter of the next calendar year, PTI reported.The pact was signed in Muscat by Minister of Commerce and Industry 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.

What India wins

Oman has offered zero tariff access on over 98% of its tariff lines, covering 99.38% of Indian exports to the country. The immediate elimination of tariffs will apply to 97.96% of product categories.All major labour-intensive sectors, including gems and jewellery, textiles, leather, footwear, sporting goods, plastics, furniture, agricultural products, engineering goods, pharmaceuticals, medical equipment and automobiles, will see a complete removal of tariffs. Currently, such goods in Oman pay about 5% import duties.

India’s tariff concessions

India will provide tariff liberalization on 77.79% of its total tariff lines (12,556), covering 94.81% of Oman’s imports by value.For products that are sensitive to India but of export importance to Oman, such as dates, marble and petrochemicals, concessions will largely be offered through tariff rate quotas (TRQs).To protect domestic interests, India has kept several products on the exclusion list, including dairy, tea, coffee, rubber, tobacco, gold and silver bullion, jewelry, footwear, sporting goods and scrap of various base metals.

Stimulate services and investments

In the services sector, Oman has made commitments in a wide range of sectors, including computer-related services, professional and business services, audiovisual services, research and development, education and healthcare.Oman’s global services imports stand at US$12.52 billion, while India’s share currently stands at 5.31%. This underlines what officials describe as significant untapped potential for Indian service providers.The agreement also enables 100% foreign direct investment by Indian companies in key service sectors in Oman through commercial presence.

Mobility framework for professionals

A major highlight of the CEPA is the enhanced mobility framework for Indian professionals. For the first time, Oman has made comprehensive commitments under Mode 4 (Movement of Skilled Professionals).This includes increasing the quota for intra-corporate transferees from 20% to 50%, and extending the authorized stay for contractual service providers from 90 days to two years, with the option of a further two-year extension.More liberal entry and residence conditions will apply to professionals in sectors such as accountancy, tax, architecture, medical and related services, aimed at enabling deeper professional involvement.

Trade, remittances and strategic ties

Bilateral trade between India and Oman in 2024-25 was approximately USD 10.5 billion, with exports of USD 4 billion and imports of USD 6.54 billion. Oman is India’s third largest export destination among the GCC countries.Nearly seven million Indian nationals live in Oman, and India receives approximately $2 billion in remittances from the country annually. There are over 6,000 Indian branches operating in Oman, and India has received US$615.54 million in foreign direct investment from Oman between April 2000 and September 2025.

Why the pact matters

This is India’s second trade pact in six months, and the second CEPA with a GCC member after the UAE deal was implemented in May 2022. Talks are also expected with Qatar, while other GCC members include Bahrain, Kuwait and Saudi Arabia.For Oman, this is the first bilateral trade agreement since signing it with the US in 2006. Negotiations on the CEPA began in November 2023 and were concluded this year.The deal comes at a time when India faces high tariffs of 50% in the US, its largest export destination, making diversification of trading partners a key strategic priority.