India–Oman CEPA: Transformational Duty-Free Access and Strategic Trade Corridor

The India–Oman Comprehensive Economic Partnership Agreement (CEPA) officially became operational on 1 June 2026, following its signing on 18 December 2025 in Muscat and completion of domestic ratification procedures in both countries. This landmark pact creates a wide-ranging economic framework that extends far beyond basic tariff cuts, encompassing:

  • Trade in goods
  • Trade in services
  • Investment facilitation
  • Professional and business mobility
  • Regulatory cooperation
  • Disciplines on non-tariff barriers and trade facilitation

At its core, the CEPA delivers an exceptional outcome for Indian goods exports: 99.38% of India’s exports by value now enter Oman at zero customs duty, covering 98.08% of Oman’s tariff lines. On the reciprocal side, India has undertaken tariff liberalization on 77.79% of its tariff lines, carefully ring‑fencing sensitive segments such as dairy, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices and critical agricultural items.

Key takeaway: The CEPA is structured as “tariff liberalization PLUS” – securing duty-free access, deeper services commitments, investment facilitation, reduced non-tariff barriers and predictable mobility routes for professionals and businesses.

1. Strategic Significance of the India–Oman CEPA

1.1 Evolution of Bilateral Trade

Oman is India’s second-largest trading partner in the Gulf region and a crucial logistics gateway to the GCC and East Africa, thanks to its modern ports and logistics hubs. Bilateral trade figures underscore a healthy upward trajectory:

  • USD 10.61 billion in FY 2024-25
  • Rising to USD 11.18 billion in FY 2025-26

The CEPA is expected to accelerate this momentum, positioning India and Oman as strategic partners in newly emerging supply chains and economic corridors that link South Asia, the Gulf and East Africa.

1.2 High-Level Political and Institutional Backing

The Agreement was signed in Muscat in the presence of Hon’ble Prime Minister Shri Narendra Modi and His Majesty Sultan Haitham bin Tarik Al Said, reflecting the political priority accorded to this partnership. It was subsequently operationalized in India in the presence of Union Minister of Commerce and Industry Shri Piyush Goyal and H.E. Issa Saleh Al Shibani, Ambassador of Oman to India.

To commemorate the Agreement’s entry into force, the first consignments benefiting from preferential tariffs – including agricultural products and gems and jewellery shipped from Mumbai, Kolkata and Chennai – were flagged off, symbolizing the start of a new trade regime for exporters.

2. Goods Trade: 99.38% Duty-Free Access to Oman

2.1 Immediate Zero-Duty Coverage

Under the CEPA, 99.38% of Indian exports to Oman by value now receive immediate duty-free treatment, encompassing 98.08% of Oman’s tariff lines. This is one of India’s most extensive tariff elimination packages achieved with a Gulf partner.

Previously, under the MFN regime, only 15.33% of India’s export basket enjoyed zero duty in Oman. With CEPA in place, Indian products now secure a clear price edge in Oman’s approximate USD 28 billion import market, particularly against suppliers that do not benefit from any preferential agreement.

Key benefits include:

  • Direct tariff savings for Indian exporters
  • Enhanced competitiveness for MSMEs and labour-intensive industries
  • Stable and predictable market access terms
  • Improved ability to participate in regional value chains

2.2 Calibrated Liberalization by India and Protection of Sensitive Sectors

India has agreed to tariff liberalization on 77.79% of its tariff lines, which together account for 94.81% of imports from Oman by value. However, India has consciously carved out several categories from concessions to protect domestic interests.

Sensitive items excluded from tariff concessions include:

  • Dairy products
  • Cereals
  • Fruits and vegetables
  • Edible oils and oilseeds
  • Rubber
  • Leather
  • Spices
  • Other key agricultural commodities

In addition to exclusion lists, the Agreement provides for:

  • Tariff Rate Quotas (TRQs) on identified products, and
  • Minimum Import Price (MIP) mechanisms for specific sensitive industrial and agricultural goods.

These tools allow India to control import surges, safeguard farmer incomes, protect domestic manufacturing and maintain food security, while still expanding export opportunities.

3.