The Oman CEPA, a new gateway for India’s exports

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed on 18 December 2025, entered into force on 1 June 2026 — making it Oman's first bi...

What Happened

The India-Oman Comprehensive Economic Partnership Agreement (CEPA), signed on 18 December 2025, entered into force on 1 June 2026 — making it Oman's first bilateral trade agreement since its deal with the United States in 2006.
Under the agreement, India will receive 100% duty-free access on 98.08% of tariff lines in the Omani market, covering 99.38% of total bilateral trade value, with all zero-duty concessions applied immediately upon entry into force.
India has agreed to reduce or eliminate tariffs on approximately 78% of its tariff lines for Omani products, covering nearly 95% of imports from Oman, while placing 2,789 tariff lines on a protected "exclusion list."
The CEPA covers goods, services, investment, rules of origin, customs facilitation, digital trade, intellectual property, and technical barriers to trade — going well beyond a standard goods-only FTA.
Key Indian export sectors expected to benefit include apparel, agricultural products, processed food, gems and jewellery, transport equipment, precision instruments, iron and steel, electrical machinery, marine products, and copper products.
The agreement also includes provisions for professional mobility and enhanced services trade, opening new pathways for Indian skilled workers and service providers in Oman.

Static Topic Bridges

Comprehensive Economic Partnership Agreement (CEPA)

A CEPA is a broader and more comprehensive form of trade agreement than a conventional Free Trade Agreement. While FTAs typically focus on reducing tariffs on goods, CEPAs additionally cover services trade, investment protection and promotion, intellectual property rights, digital commerce, professional mobility, and regulatory cooperation. India's CEPA framework was pioneered with the UAE in 2022 and has since been extended to Mauritius, Australia (via ECTA), and now Oman.

India's UAE CEPA (2022) was concluded in a record 88 days of negotiations and entered into force in May 2022.
A CEPA typically requires signatories to negotiate and liberalise services schedules (similar to GATS commitments at WTO) alongside goods tariff schedules.
CEPAs include Dispute Settlement Mechanisms, Rules of Origin provisions, and regulatory harmonisation chapters absent from simpler FTAs.

Connection to this news: The Oman CEPA follows the India-UAE CEPA template and extends India's CEPA network within the Gulf Cooperation Council (GCC) region, diversifying economic ties beyond oil trade.

Rules of Origin in Trade Agreements

Rules of Origin (RoO) are criteria used to determine the national source of a product. They are essential in FTAs and CEPAs to prevent "trade deflection" — the routing of third-country goods through a low-tariff partner to gain preferential access. RoO provisions typically require a minimum percentage of local value addition (often 35-40%) or a specified change in tariff classification.

India's trade agreements use both the "Value Addition" criterion and the "Change in Tariff Heading" criterion to determine origin.
The CAROTAR (Customs Administration of Rules of Origin under Trade Agreements) Rules, 2020, govern how Indian customs authorities verify origin claims under all of India's trade agreements.
Weak or easily circumvented RoO in earlier agreements (notably ASEAN FTA) were identified as a key factor in import surges from China via member states.

Connection to this news: The Oman CEPA's RoO provisions will determine whether Indian goods genuinely benefit from preferential access or whether Omani imports could become a conduit for third-country goods, making robust RoO a critical implementation parameter.

India-Gulf Cooperation Council (GCC) Trade Relations

The Gulf Cooperation Council (GCC), comprising Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman, is India's largest regional trading partner. The Indian diaspora in GCC countries — approximately 8.9 million people — makes it the largest source of inward remittances to India, contributing roughly $40 billion annually. India and GCC countries are engaged in ongoing negotiations for a broader India-GCC FTA alongside the bilateral agreements.

India's total trade with GCC countries stands at approximately $180 billion annually.
Oman is strategically located as a transit hub between South Asia, East Africa, and the wider Middle East, giving it significance beyond its own domestic market.
Oman's GDP is approximately $104 billion (2024), and India is already one of Oman's largest trading partners.
The Oman CEPA is the second bilateral India-GCC member agreement after the UAE CEPA (2022).

Connection to this news: The Oman CEPA builds on the UAE CEPA foundation and positions India to pursue broader GCC-wide market access, leveraging Oman's strategic location for re-export opportunities into East Africa and the wider Middle East.

Professional Mobility in Trade Agreements

Professional mobility provisions in trade agreements allow skilled workers, professionals, and service providers to work in partner countries under facilitated visa and recognition arrangements. These typically cover Mode 4 of services trade under the GATS framework — the movement of natural persons. India has consistently pushed for stronger professional mobility provisions in its trade agreements, reflecting its comparative advantage in skilled human capital.

Mode 4 (Movement of Natural Persons) under GATS covers temporary movement of natural persons to supply services abroad.
India has a diaspora of approximately 8.9 million in the GCC, making professional mobility frameworks particularly significant for maintaining and expanding this economic corridor.
Professional mobility provisions typically cover Intra-Corporate Transferees, Independent Service Suppliers, and Contract Service Suppliers.

Connection to this news: The Oman CEPA's professional mobility chapter creates a structured framework for Indian professionals already working or seeking to work in Oman, adding an important human capital dimension to the agreement beyond goods and investment flows.

Key Facts & Data

India-Oman CEPA signed: 18 December 2025; entered into force: 1 June 2026.
Duty-free access for India in Oman: 98.08% of tariff lines (99.38% of trade value), effective immediately.
India's tariff liberalisation for Oman: ~78% of tariff lines, covering ~95% of imports.
India's tariff exclusion list: 2,789 tariff lines protected from liberalisation.
Oman's GDP: approximately $104 billion (2024).
India's total trade with GCC: approximately $180 billion annually.
Indian diaspora in GCC: approximately 8.9 million persons.
First Oman bilateral trade deal since Oman-US FTA of 2006.
Key Indian export beneficiaries: apparel, gems and jewellery, marine products, iron and steel, transport equipment, processed food.