India-Oman FTA likely to come into force from June 1: Piyush Goyal

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed in Muscat on December 18, 2025, is expected to come into force on June 1, 2026, ma...

What Happened

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed in Muscat on December 18, 2025, is expected to come into force on June 1, 2026, making it India's most recent bilateral trade pact to enter implementation.
Under the agreement, Oman grants India 100% duty-free access across 98.08% of its tariff lines, covering 99.38% of India's exports to Oman by value — all concessions effective from Day 1.
India offers tariff liberalisation on approximately 94.81% of its imports from Oman by value, with phased elimination over 5–10 years for sensitive agricultural goods.
This is Oman's first bilateral trade agreement since its Free Trade Agreement with the United States in 2006.

Static Topic Bridges

Comprehensive Economic Partnership Agreements (CEPAs) and India's FTA Strategy

A Comprehensive Economic Partnership Agreement (CEPA) is a broader form of free trade agreement that covers not only goods (tariffs, rules of origin) but also services trade, investment promotion, intellectual property, government procurement, and dispute resolution. India has used the CEPA framework — distinct from plain FTAs — to negotiate more comprehensive economic integration with key partners.

India's CEPA/FTA timeline (selected): Singapore (2005), ASEAN (Goods: 2009, Services: 2015), South Korea (2010), Japan (2011), UAE CEPA (May 2022), Australia ECTA (December 2022), Oman CEPA (signed December 2025, in force June 2026).
The India-UAE CEPA, implemented from May 2022, served as a template for the GCC-region CEPA approach — rapid conclusion, Day-1 liberalisation, and service sector commitments.
India has finalised trade deals since 2021 with Mauritius, UAE, Australia, Oman, New Zealand, EFTA bloc, UK, and the EU — covering 38 countries whose combined global imports stand at approximately USD 12 trillion.

Connection to this news: The India-Oman CEPA follows the UAE CEPA model in geographic and strategic terms, deepening India's Gulf engagement and expanding the GCC-region trade framework ahead of a potential India-GCC FTA.

Rules of Origin and Tariff Liberalisation Mechanisms

Rules of Origin (RoO) are the criteria used to determine the national source of a product, which is essential for determining whether goods qualify for preferential tariff treatment under an FTA. RoO prevent "trade deflection" — where third-country goods are routed through an FTA partner to unfairly claim preferential duties.

Tariff liberalisation under the India-Oman CEPA covers major Indian export sectors: textiles (tariffs eliminated from up to 12% → 0), leather and footwear (16% → 0), gems and jewellery (up to 4% → 0), processed foods (up to 70% → 0 on 99.7% of lines), marine products (up to 20% → 0), engineering goods, pharmaceuticals, and automobiles.
India has committed to eliminating tariffs for Oman's marine and industrial products from Day 1, while retaining 5–10 year phase-outs on sensitive agricultural items.
The CEPA includes commitments on Traditional Medicine (AYUSH) across all modes of supply — the first such comprehensive commitment made by any country to India, creating opportunities for Yoga, Ayurveda, and wellness services in the Gulf.

Connection to this news: The June 1 implementation date triggers immediate duty-free access under Day-1 concessions, making RoO compliance critical for Indian exporters to actually realise tariff benefits from the agreement.

India-Oman Economic and Strategic Relations

India and Oman share deep historical, cultural, and economic ties rooted in maritime trade across the Arabian Sea. Oman is a member of the Gulf Cooperation Council (GCC) and holds strategic significance for India owing to its location at the mouth of the Persian Gulf, its large Indian diaspora (approximately 8 lakh Indian nationals), and its role as an energy supplier and investment partner.

Bilateral trade between India and Oman reached approximately USD 10.6 billion in FY 2024-25.
Oman ranked as India's 29th largest export destination and 25th largest import source in FY 2024-25.
Oman is part of the GCC, with which India has been negotiating a broader regional trade agreement since 2006.
The CEPA covers goods, services (including computer-related, healthcare, education, audio-visual, and R&D services), investment, and professional mobility.

Connection to this news: India's push to bring the CEPA into force by June 1, 2026, reflects the strategic priority of cementing Gulf economic partnerships, particularly as India seeks to leverage FTAs to diversify export markets amid global trade uncertainty.

Key Facts & Data

Agreement type: Comprehensive Economic Partnership Agreement (CEPA)
Signed: December 18, 2025, in Muscat, Oman
Expected in force: June 1, 2026
Oman's tariff lines granted duty-free: 98.08% (covering 99.38% of India's exports by value)
India's tariff liberalisation: ~94.81% of imports from Oman by value
India-Oman bilateral trade (FY 2024-25): ~USD 10.6 billion
Oman's last bilateral trade agreement before this: US-Oman FTA (2006) — a gap of nearly 20 years
Key Indian export sectors: textiles, leather, gems & jewellery, processed foods, marine products, pharmaceuticals, engineering goods, automobiles
Key Oman export items: marine products, industrial goods, petroleum products
AYUSH/Traditional Medicine: first comprehensive commitment by any country to India across all modes of supply