India and Oman sign CEPA to deepen trade, services and labour mobility

India and Oman signed a Comprehensive Economic Partnership Agreement that significantly liberalises trade in goods and services and enhances the mobility of professionals. Under the agreement, Oman will grant India duty-free access on 98.08% of its tariff lines, covering 99.38% of India’s exports to the country. India, in turn, has offered liberalised tariffs on 77.79% of its tariff lines, accounting for 94.81% of its imports from Oman.

The agreement was signed in Muscat by Commerce and Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed Al Yousef, in the presence of Prime Minister Narendra Modi and Sultan Haitham bin Tarik. Alongside tariff reductions on merchandise trade, the pact includes wide-ranging concessions to strengthen India’s services sector, including improved terms for the movement of workers.

India exported goods worth $4.06 billion to Oman in 2024–25, accounting for 0.93% of its total exports, while imports from Oman totalled $6.5 billion, accounting for 0.91% of its total imports. The CEPA is Oman’s first bilateral trade agreement since its deal with the United States in 2006 and only India’s second agreement with a Gulf Cooperation Council country, following the UAE pact signed in February 2022.

Speaking at the India–Oman Business Forum earlier in the day, the prime minister described the agreement as a blueprint for the future of bilateral ties, saying it would energise trade, strengthen investor confidence and open new opportunities across sectors. The commerce minister has also highlighted that the agreement positions Oman as a strategic gateway for India to the wider GCC region, Eastern Europe, Central Asia and Africa.

The agreement is expected to deliver significant gains for labour-intensive sectors. According to the government, full tariff elimination will apply to sectors including gems and jewellery, textiles, leather, footwear, sports goods, plastics, furniture, agricultural products, engineering goods, pharmaceuticals, medical devices, and automobiles. The commerce minister said the pact would support employment generation and strengthen MSMEs, artisans and women-led enterprises, while also reinforcing supply chains and long-term economic cooperation.

At the same time, India has excluded sensitive items from the agreement, including dairy and other agricultural products such as tea, coffee, rubber and tobacco, as well as gold and silver bullion, jewellery, footwear, sports goods and certain metal scrap categories.

A major highlight of the CEPA is the enhanced mobility framework for Indian professionals. For the first time, Oman has made extensive commitments under Mode 4, raising the quota for intra-corporate transferees from 20% to 50%. The permitted duration of stay for contractual service suppliers has been extended from 90 days to two years, with the option to extend by a further two years. The agreement also eases entry and stay conditions for skilled professionals in sectors including accountancy, taxation, architecture, medical and allied services.

The government describes the services component of the pact as comprehensive and forward-looking. Oman has made commitments across sectors such as computer-related services, business and professional services, audiovisual services, research and development, education, and health. These measures are expected to create new opportunities for Indian service providers, encourage high-value job creation and deepen commercial engagement. Oman currently imports services valued at about $12.52 billion, with India accounting for 5.31% of that total.

The agreement also permits 100% foreign direct investment by Indian companies in key services sectors in Oman through a commercial presence, significantly expanding opportunities for Indian firms in the region. Both sides have agreed to hold future discussions on social security coordination once Oman’s contributory social security system is operational.

India’s trade with Oman remains heavily weighted towards petroleum and mineral-based products. In 2024–25, petroleum products accounted for 35.1% of India’s exports to Oman, followed by processed minerals at 9.2%. Other key export categories included aircraft and spacecraft parts, cosmetics and toiletries, and basmati rice, collectively accounting for around 55% of exports. On the import side, crude oil and petroleum gases accounted for 38% of India’s imports from Oman. In contrast, fertilisers, acyclic alcohols, and ammonia together accounted for over two-thirds of total imports.

Source: The Hindu