The India-Oman Comprehensive Economic Partnership Agreement (CEPA) will take effect on Monday, extending zero-duty access on 98% of tariff lines, which cover 99.4% of India’s exports to Oman. In return, India will open up 77% of its tariff lines for Oman, covering 94% of its total exports to India. This is India’s 15th bilateral trade agreement.
For India, the most visible gains lie in merchandise exports. Oman’s gains are concentrated in energy and industrial inputs, said Ajay Srivastava, founder of Global Trade Research Initiative.
With over 6,000 India–Oman joint ventures and Indian investments exceeding $7.5 billion—mainly in the Sohar and Salalah free zones—the CEPA is as much a strategic pact as a trade deal, he added.
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The India-Oman goods trade in FY 26 stood at $ 11.18 billion with India’s imports at $ 7.16 billion and exports at $ 4.02 billion. Most of the trade is confined to petroleum and its products, chemicals and fertilizers.
Beyond Tariffs
“Given the small size of bilateral trade, its real value goes beyond tariffs: it strengthens India’s economic and geopolitical presence at the mouth of the Gulf, deepens Indian firms’ role in Omani logistics and supply chains, and supports India’s wider strategy on energy, services and regional connectivity,” Srivastava said.
The negotiations on CEPA between India and Oman had started in November 2023 and concluded last year with the agreement’s signing on December 18. It comes into force from June 1.
Beyond goods trade, the CEPA also covers services, investment, government procurement, dispute settlement, and other regulatory aspects. It also incorporates mutual recognition agreements, reduction friction in goods and other exchanges.
All zero-duty concessions would apply for India from the first day of the agreement’s entry into force, providing immediate certainty to exporters.
Presently, only 15.33% of India’s export value and 11.34 % of tariff lines (2022–24 average) enter the Omani market at zero duty under the Most Favored Nation (MFN) regime. With CEPA, Indian exports to Oman that earlier faced duties of up to 5 %, valued at around $ 3.64 billion of the around $ 4.02 billion are expected to gain significantly from improved price competitiveness.
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India has identified electronics, chemicals, textiles, gems and jewellery, and plastics as areas of growth. Oman is a major importer of these products but India’s share in these imports is between 4-10% despite having the capacity.
New Era for Service Professional
While opening up 77.79 % of the total tariff lines (12,556), covering 94.81 per cent of India’s imports from Oman by value, India has placed multiple tariff lines in the exclusion list.
Products like marble blocks, dates and petrochemicals will also be subject to quotas by India. The annual quota for duty free dates will be 2,000 tonnes, polyethylene 150 kilo tonnes and polypropylene 75 kilo tonnes. The imports beyond the quota will be taxed at normal rates. In petrochemicals and some other products the duty relaxations will be spread over a period of time ranging from 5 to 10 years. Oman’s gains are concentrated in energy and industrial inputs.
In services Oman has offered concessions in sectors like computer related services, business and professional services, audio-visual services, research and development, education and health services. Another highlight is the enhanced mobility framework for Indian professionals, including a notable increase in the quota for Intra-Corporate Transferees from 20% to 50%. This will enable Indian companies to have 50% staff from India as against the limit of 20%.
The duration of stay for Contractual Service Suppliers has been extended from the existing 90 days to two years with the possibility of a further two-year extension. The agreement also provides for more liberal entry and stay conditions for skilled professionals in key sectors such as accountancy, taxation, architecture, medical and allied services, supporting deeper and more seamless professional engagement.
The CEPA further provides for 100 per cent Foreign Direct Investment by Indian companies in major services sectors in Oman through commercial presence, opening a wide avenue for India’s services industry to expand operations in the region.
TOPICSCEPAomanThis article was first uploaded on May thirty-one, twenty twenty-six, at thirty-six minutes past eight in the night. © The Indian Express (P) Ltd