India, Oman sign CEPA, unlocking near-zero duty access for Indian exports and services

New Delhi, December 19: India and Oman on Thursday signed a Comprehensive Economic Partnership Agreement (CEPA), marking a major milestone in India’s strategic and economic engagement with the Gulf region and opening unprecedented market access for Indian goods, services and professionals.

The agreement was signed in the presence of Prime Minister Narendra Modi and Sultan Haitham bin Tarik of Oman by commerce and industry minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef.

The CEPA provides zero-duty access for 98.08 percent of Oman’s tariff lines, covering 99.38 percent of India’s exports by value, making it one of the most liberal trade agreements India has concluded to date. Immediate tariff elimination applies to 97.96 percent of tariff lines, significantly boosting competitiveness for Indian exporters.

Labour-intensive sectors including textiles, leather, footwear, gems and jewellery, engineering products, plastics, furniture, agricultural products, pharmaceuticals, medical devices and automobiles are expected to benefit directly, with strong employment potential for MSMEs, artisans and women-led enterprises.

India will extend tariff liberalisation on 77.79 percent of its tariff lines, covering 94.81 percent of imports from Oman by value. Sensitive sectors such as dairy, tea, coffee, rubber, tobacco, precious metals, select agricultural items and certain labour-intensive products have been excluded or placed under tariff-rate quota safeguards to protect domestic interests.

The agreement delivers an ambitious services package, with Oman making first-of-its-kind commitments across 127 sub-sectors, including computer-related services, business and professional services, research and development, education, healthcare and audio-visual services. These commitments are expected to unlock high-value opportunities for Indian service providers in a market where India currently holds a modest share of Oman’s USD 12.5 billion services imports.

A key feature of the CEPA is enhanced mobility for Indian professionals. Oman has, for the first time, offered commitments across key Mode 4 categories, increasing the quota for intra-corporate transferees to 50 percent and extending permissible stays for contractual service suppliers to two years, with scope for extension. Entry and stay norms have also been liberalised for professionals in accountancy, taxation, architecture, medical and allied sectors.

The agreement allows 100 percent foreign direct investment by Indian companies in major services sectors in Oman and provides for future negotiations on social security coordination once Oman’s contributory system is implemented.

In a landmark move, Oman has made the first-ever comprehensive commitment on traditional medicine across all modes of supply, creating new opportunities for India’s AYUSH and wellness sectors and promoting medical value travel.

Additional provisions address non-tariff barriers, including fast-tracking marketing authorisations for pharmaceutical products approved by leading global regulators, mutual recognition of halal certification, acceptance of India’s organic certification framework and enhanced cooperation on standards and conformity assessment.

Bilateral trade between India and Oman currently exceeds USD 10 billion, supported by a strong Indian diaspora of nearly 700,000 people and more than 6,000 Indian businesses operating in Oman. The CEPA is expected to deepen supply chain integration, boost exports, generate employment and strengthen long-term economic cooperation.

This is India’s second free trade agreement in the last six months, following the agreement with the United Kingdom, and Oman’s first bilateral trade agreement since 2006.