Strategic Upgrade in India-Oman Economic Ties

The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is one of the latest major milestones in bilateral economic relations. Going beyond a conventional free trade agreement, the CEPA integrates trade in goods and services, investment facilitation, professional mobility, and regulatory cooperation into a single, coherent framework.

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Rather than prioritizing short-term tariff gains alone, the agreement is designed to promote sustained economic integration. It balances deeper market access with domestic safeguards, offering businesses greater predictability, streamlined regulations, and expanded opportunities, without compromising national policy priorities.

India-Oman economic engagement: Trade and services snapshot

Merchandise trade trends

Trade and commerce form a core pillar of India–Oman relations. Bilateral trade expanded from US$8.94 billion in FY 2023–24 to US$10.61 billion in FY 2024–25. During April-November 2025, trade stood at US$7.23 billion, indicating continued momentum.

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Services trade

India’s services exports to Oman rose from US$397 million in 2020 to US$617 million in 2023, led by IT, telecommunications, transport, travel, and business services. Services imports increased from US$101 million to US$159 million, reflecting deeper two-way engagement.

This expanding trade base provided the rationale for pursuing a comprehensive partnership agreement.

Market access in goods: India’s export gains

Under the CEPA, India secures near-universal duty-free access to the Omani market:

• 08 percent of tariff lines
• 38 percent of export value (based on FY 2022–23 averages)
• All concessions apply from day one

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Previously, only about 15 percent of India’s export value entered Oman duty-free under the MFN regime. Exports worth roughly US$3.64 billion, earlier subject to tariffs of up to 5 percent, are now expected to gain immediate price competitiveness.

With Oman’s total imports exceeding US$28 billion, Indian exporters stand to benefit from simplified procedures, reduced compliance burdens, and faster market entry across a wide range of product categories.

India’s market access offer and built-in safeguards

India has offered tariff liberalization on 77.79 percent of tariff lines, covering 94.81 percent of imports from Oman by value. At the same time, a robust exclusion list safeguards sensitive sectors.

Key excluded or protected areas

• Strategic domestic sectors: transport equipment, select chemicals, cereals, spices, tea, coffee, and animal-origin products
• Sensitive value chains: rubber, leather, textiles, footwear, petroleum products, and minerals
• Agriculture: dairy, oilseeds, edible oils, fruits, vegetables, and honey

This calibrated approach preserves manufacturing competitiveness and domestic agriculture interests while enabling export-led growth.

Sectoral impact analysis

Engineering goods

Engineering exports to Oman reached US$875.83 million in FY 2024-25. Under the CEPA, all engineering products now enjoy zero-duty access, replacing earlier tariffs of up to 5 percent.

Exports are projected to rise to US$1.3-1.6 billion by 2030, with strong prospects in iron and steel, industrial machinery, electric equipment, motor vehicles, and copper products. MSMEs are expected to benefit significantly through deeper participation in Oman’s infrastructure and industrial projects.

Pharmaceuticals

Oman’s pharmaceutical market is projected to grow from US$302.84 million (2024) to US$473.71 million by 2031. The CEPA provides binding zero-duty access for finished medicines, vaccines, and key APIs.

Regulatory fast-tracking allows products approved by authorities such as the USFDA, EMA, and UK MHRA to receive marketing authorization within 90 days, substantially reducing approval timelines and compliance costs.

Marine products

Oman’s marine imports averaged US$118.91 million (FY 2022–24), while imports from India remain modest. Immediate duty-free access under the CEPA improves competitiveness for Indian seafood exports, including shrimp and fish.

Given the labor-intensive nature of the sector, export expansion is expected to generate employment in coastal regions and processing hubs.

Agriculture and processed food

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India is the second-largest supplier of agricultural products to Oman, with exports rising to US$556.34 million in 2024. Duty-free access strengthens India’s position in products such as boneless bovine meat, eggs, biscuits, butter, honey, and condiments.

At the same time, sensitive agricultural products remain protected through exclusions or phased tariff elimination over five to ten years, balancing export growth with food security concerns.

Electronics

Oman imported electronics worth US$3 billion in 2024, while India’s exports stood at US$123 million. The CEPA eliminates residual tariffs on select electronic products, improving certainty and enabling gradual market share gains in high-value segments.

Chemicals

With Oman importing US$3.13 billion worth of chemicals annually, immediate zero-duty access and tariff reductions of up to 5 percent provide Indian exporters a competitive edge. The agreement also supports longer-term cooperation in petrochemicals, green hydrogen, and industrial inputs.

Textiles

India’s textile exports to Oman rose sharply to US$131.8 million in 2024, capturing a 22 percent market share. Zero-duty access enhances competitiveness against suppliers such as China, Bangladesh, and Türkiye, supporting employment across major textile clusters in India.

Plastics

India’s plastics exports benefit from immediate duty elimination, offering a price advantage of up to 5 percent. With Oman importing over US$1 billion worth of plastics annually, the CEPA supports export expansion in an MSME-dominated sector.

Gems and jewelry

India’s exports to Oman stood at US$35 million in 2024, compared to Oman’s total imports of US$1.07 billion. Duty-free access is expected to drive export growth of up to US$150 million over three years, supporting employment in jewelry clusters across India.

Services, investment, and professional mobility

Services trade reached US$863 million in 2024, with a surplus of US$447 million for India. Under the CEPA, Oman has committed to liberalization across 127 services sub-sectors, including professional, IT, education, healthcare, tourism, and R&D services.

Key mobility gains include:

• Increase in the Intra-Corporate Transferee (ICT) ceiling from 20 percent to 50 percent
• First-ever FTA commitments for specific professional categories
• Binding assurances for Indian workers in manufacturing and non-services sectors
• Future negotiations on a Social Security Agreement (SSA) to avoid dual contributions

State-wise and employment impact

The CEPA is expected to deliver geographically diversified export gains across agriculture, textiles, food processing, marine products, gems and jewelry, and engineering goods.

Labor-intensive, MSME-driven sectors stand to benefit most, supporting employment generation, higher capacity utilization, and inclusive growth across production clusters nationwide.

Regulatory cooperation: Reducing non-tariff barriers

The CEPA includes dedicated chapters on:

• Technical Barriers to Trade (TBT): ensuring standards and conformity assessments are transparent and non-discriminatory
• Sanitary and Phytosanitary (SPS) measures: facilitating trade in food and agricultural products while protecting health and safety

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Conclusion

The India-Oman CEPA represents a comprehensive and forward-looking framework that balances liberalization with safeguards. By expanding market access, strengthening services trade, facilitating mobility, and reducing regulatory friction, the agreement is expected to boost exports, generate employment, and deepen long-term economic integration between India and Oman.

Key takeaways

• The India–Oman CEPA establishes an integrated framework covering trade in goods and services, investment, professional mobility, and regulatory cooperation.
• Bilateral trade reached US$10.61 billion in FY 2024-25, underscoring the growing depth of economic engagement.
• India receives 100 percent duty-free access in Oman across 98.08 percent of tariff lines, covering 99.38 percent of export value, effective from the agreement’s entry into force.
• The CEPA unlocks opportunities across engineering goods, pharmaceuticals, agriculture and processed food, marine products, textiles, chemicals, electronics, plastics, and gems and jewelry.
• A calibrated liberalization framework, including exclusion lists and phased tariff reductions, protects sensitive sectors while supporting MSMEs, labor-intensive industries, and regionally balanced export growth.

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