India and Oman today signed a Comprehensive Economic Partnership Agreement (CEPA) in Muscat, marking a historic milestone in their centuries-old bilateral relations. The agreement was inked by India’s Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion, H.E. Qais bin Mohammed Al Yousef, in the presence of Prime Minister Narendra Modi and His Majesty Sultan Haitham bin Tarik during Modi’s official visit to the Sultanate.

The CEPA, India’s second major free trade pact in six months following the deal with the United Kingdom and its second with a Gulf Cooperation Council member after the UAE agreement in 2022, is expected to significantly boost bilateral trade and investment. For Oman, it represents the country’s first bilateral free trade agreement since its 2006 pact with the United States.

Bilateral trade between the two nations crossed USD 10.5 billion in 2024-25, with Indian exports valued at around USD 4 billion and imports, mainly petroleum products and urea, at USD 6.54 billion. Oman is India’s third-largest export market in the GCC region and serves as a strategic gateway to the Middle East and Africa. The agreement builds on deep historical ties and strong people-to-people connections, with nearly 700,000 Indians living in Oman, contributing to over 6,000 Indian-owned establishments and sending annual remittances of approximately USD 2 billion.

Under the terms of the CEPA, Oman has offered zero-duty access on 98.08 percent of its tariff lines, covering 99.38 percent of India’s exports by value, with immediate tariff elimination on 97.96 percent of lines. This will particularly benefit India’s labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering goods, pharmaceuticals, medical devices and automobiles.

In return, India has liberalised tariffs on 77.79 percent of its tariff lines, covering 94.81 percent of imports from Oman, primarily through tariff-rate quotas while protecting sensitive sectors like dairy, gold and certain agricultural products.

The agreement also includes robust commitments in services, covering 127 sub-sectors such as computer-related services, professional services, research and development, education, health and audio-visual services. Indian companies will enjoy 100 percent foreign direct investment permission in key Omani services sectors.

Notably, the pact enhances mobility for Indian professionals, with Oman raising intra-corporate transferee quotas from 20 percent to 50 percent. The agreement provides a comprehensive and forward-looking framework for services trade, covering IT, business and professional services, R&D, education, health, and audio-visual services. A major highlight of the FTA is an 8 times extension of permitted duration of stay for Contractual Service Suppliers from 90 days to two years, with the possibility of a further two-year extension.

It also features the world’s first global commitment on traditional medicine, covering India’s AYUSH and wellness sectors, alongside cooperation in pharmaceuticals, organic products, Halal certification and standards.

The CEPA addresses non-tariff barriers to improve market access and paves the way for future discussions on social security for workers. Officials expect the agreement to drive substantial growth in bilateral trade, create jobs in labour-intensive industries, empower MSMEs, artisans and women-led enterprises, and strengthen supply chains. It also opens new opportunities for Indian services exporters, given Oman’s USD 12.52 billion in services imports, of which India currently holds only a 5.31 percent share.

Describing the agreement as a “blueprint of a bright future,” Prime Minister Modi said it would infuse new energy into bilateral ties. Saying that the signing of the agreement was a major outcome of his visit, PM Modi said that it will benefit the youth of the two nations. “We have also covered substantial ground in other futuristic sectors. May India-Oman friendship keep getting more robust in the coming times,” he added.

Commerce Minister Piyush Goyal highlighted that the CEPA unlocks nearly universal duty-free access for Indian goods, expands services commitments and ensures greater mobility for Indian professionals while safeguarding national interests.

He said that this is a balanced and ambitious agreement that will boost bilateral trade, strengthen supply chains, create employment, and deepen long-term economic partnership, in line with India’s vision of inclusive and sustainable growth

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