India-Oman CEPA to strengthen energy security, trade resilience and export growth: Report

India and Oman's Comprehensive Economic Partnership Agreement (CEPA) entered into force on June 1, 2026, marking Oman's first bilateral trade agreement in ne...

What Happened

India and Oman's Comprehensive Economic Partnership Agreement (CEPA) entered into force on June 1, 2026, marking Oman's first bilateral trade agreement in nearly two decades and India's second CEPA within the Gulf Cooperation Council (GCC) region.
The agreement grants Indian exporters 100% duty-free market access across 98.08% of Oman's tariff lines, covering 99.38% of India's export value, with zero-duty access effective from the first day of implementation.
India offered liberalised tariffs on 77.79% of its tariff lines, covering 94.81% of its imports from Oman, with sensitive sectors such as petroleum, urea, and chemicals receiving phased duty reductions over up to 10 years.
Key Indian export sectors set to benefit include textiles and garments, engineering products, automobiles, pharmaceuticals, gems and jewellery, chemicals, and agricultural products.
Oman committed to 127 services sub-sectors including IT, professional services, education, health, and tourism, while allowing 100% Foreign Direct Investment by Indian companies in major services sectors through commercial presence.

Static Topic Bridges

Comprehensive Economic Partnership Agreement (CEPA)

A CEPA is a broad-spectrum bilateral trade agreement that goes beyond tariff reduction to cover trade in goods, services, investment, intellectual property rights, digital trade, and government procurement. Unlike a basic Free Trade Agreement (FTA), a CEPA is legally binding and encompasses a wider range of economic cooperation. India's CEPA strategy has been part of its broader economic diplomacy to build deep commercial linkages with strategic partners.

India-UAE CEPA: signed February 18, 2022; came into force May 1, 2022 — India's first CEPA in the Middle East, negotiated in 88 days.
India-Oman CEPA: signed December 18, 2025; in force from June 1, 2026 — India's second CEPA within the GCC.
Distinction: FTA = primarily tariff reductions on goods; CEPA = goods + services + investment + IPR + digital trade.
A CEPA is a binding treaty unlike an MoU (non-binding memorandum of understanding).
Mode 4 commitments: Oman raised the quota for intra-corporate transferees from 20% to 50% under the CEPA — significant for Indian IT and professional services workforce mobility.

Connection to this news: The India-Oman CEPA is India's second CEPA in the GCC, building on the template of the India-UAE CEPA (2022) and deepening India's economic footprint in the Gulf region.

India's Energy Security and Gulf Dependence

India is the world's third-largest oil importer and consumer. Over 85% of India's crude oil requirements are met through imports, with the Gulf region — particularly GCC countries — accounting for the bulk of this supply. Oman plays a dual role as both an energy supplier (crude oil and LNG) and a transit gateway for India's Gulf trade, making it strategically critical for India's energy security diversification.

India-Oman bilateral trade reached USD 10.61 billion in FY 2024-25, up from USD 6.70 billion in FY 2017-18.
Oman's exports to India are dominated by petroleum products and urea (over 70% of total exports).
India is Oman's fourth largest source of non-oil imports and third largest destination for non-oil exports.
Approximately 84% of crude oil and condensate passing through the Strait of Hormuz goes to Asian markets; India is the second-largest recipient at 14.7% of total Strait flows.
Engineering exports from India to Oman reached USD 875.83 million in FY 2024-25.

Connection to this news: The CEPA's energy provisions and zero-duty access for engineering goods directly support India's goal of diversifying energy partnerships and building resilient supply chains in the Gulf.

GCC and India's Trade Diplomacy

The Gulf Cooperation Council (GCC), established in 1981, comprises six Gulf states: Saudi Arabia, UAE, Kuwait, Oman, Bahrain, and Qatar. India has historically pursued trade and strategic engagement with GCC members, given the region's importance as an energy supplier, remittance source, and market for Indian exports. India and the GCC signed a Framework Agreement on Economic Cooperation in 2004, though a broader GCC-India FTA has remained under negotiation.

GCC established: May 25, 1981; Headquarters: Riyadh, Saudi Arabia.
Over 8 million Indian diaspora live in GCC countries, making it India's largest source of remittances.
India-UAE CEPA (2022) boosted bilateral non-oil trade, with total trade reaching USD 101.25 billion in FY 2025-26.
India-Oman CEPA is Oman's first bilateral trade pact since 2006 (its earlier agreement with the US was not implemented).
Rules of Origin provisions in the CEPA prevent third-country goods from receiving preferential treatment by routing through Oman.

Connection to this news: The India-Oman CEPA deepens India's bilateral trade architecture within the GCC, advancing the broader India-GCC economic relationship beyond the UAE.

Key Facts & Data

India-Oman CEPA signed: December 18, 2025; in force: June 1, 2026.
India's second CEPA in the GCC (after India-UAE CEPA, 2022).
Oman's first bilateral trade agreement since approximately 2006.
India granted 100% duty-free access on 98.08% of Oman's tariff lines (99.38% by export value) — Day One effect.
India offered duty liberalisation on 77.79% of its tariff lines (94.81% of import value from Oman).
Oman committed 127 services sub-sectors; 100% FDI permitted in major services.
Mode 4 intra-corporate transferee quota raised from 20% to 50%.
India-Oman bilateral trade: USD 10.61 billion in FY 2024-25.
Strait of Hormuz: ~20% of global petroleum liquids consumption and ~34% of global crude oil trade transits daily; India is the second-largest recipient (14.7%).