In a significant move to deepen economic ties, India and the Sultanate of Oman have officially inked a Comprehensive Economic Partnership Agreement (CEPA). The pact, signed on December 18, 2025, promises to unlock new opportunities for Indian exporters, particularly in sectors that generate substantial employment.
Key Highlights of the India-Oman CEPA
The agreement, finalized after several rounds of negotiations, is strategically designed to benefit India's core export strengths. Oman has agreed to eliminate tariffs on a wide range of Indian goods, with a major focus on labour-intensive industries. This includes sectors like textiles and apparel, leather products, footwear, gems and jewellery, agricultural produce, and various engineering goods.
For Oman, the deal facilitates easier access to the Indian market for its key exports, including certain petroleum products, metals, and chemicals. The pact also encompasses modern trade aspects, including rules for services, investments, and technical standards, aiming to create a more predictable and transparent business environment for companies from both nations.
Expected Impact on Trade and Investment
This free trade agreement is projected to give a substantial boost to bilateral trade volumes. India is one of Oman's top trading partners, and the CEPA is expected to further consolidate this position. By removing or reducing customs duties, Indian products will become more price-competitive in the Omani market, potentially increasing their market share.
Beyond merchandise trade, the agreement is anticipated to stimulate cross-border investments and collaborations. Sectors like information technology, healthcare, tourism, and logistics are likely to see enhanced cooperation. The stability offered by the treaty could encourage Indian businesses to set up a stronger presence in Oman, using it as a gateway to other markets in the Gulf region.
A Strategic Win for Employment and Diplomacy
The deliberate focus on labour-intensive sectors underscores the agreement's domestic importance for India. By securing full tariff elimination for products from these industries, the government aims to support small and medium enterprises (SMEs) and boost job creation within the country. This aligns with broader economic goals of promoting manufacturing and exports.
On the diplomatic front, the India-Oman CEPA strengthens a historically warm and strategic partnership. Oman is a crucial partner for India in the Gulf, with strong people-to-people ties facilitated by a large Indian diaspora. This economic pact adds a robust new layer to the relationship, fostering greater interdependence and shared prosperity. The successful conclusion of this deal also signals India's continued commitment to engaging with key regional partners through modern trade agreements.
The implementation of the agreement will now be closely watched by industry bodies and exporters, who are poised to leverage the new tariff advantages to expand their footprint in Oman and the wider Middle East.
