SYLLABUS

GS-2: Bilateral, Regional and Global Groupings and Agreements involving India and/or affecting India’s interests.

GS-3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment. 

Context: The India–Oman Comprehensive Economic Partnership Agreement (CEPA) entered into force on 1 June 2026, marking a major milestone in India’s economic engagement with the Gulf region and providing unprecedented market access for Indian goods and services in Oman. 

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• Signed in December 2025, the agreement is one of India’s most comprehensive trade agreements in the Gulf region and is expected to significantly boost bilateral trade, which has already crossed US$ 15 billion in recent years. 

• According to the Ministry of Commerce and Industry, the CEPA is expected to nearly double India’s exports to Oman in the coming years while strengthening India's presence in the Gulf, East African, and West Asian markets. 

• The agreement aligns with India’s broader strategy of strengthening economic partnerships under its Act West Policy and expanding its network of high-quality trade agreements.

Key Features of India–Oman CEPA

1. Transformational Market Access for Trade in Goods

• Oman has granted 100% duty-free access on 98.08% of its tariff lines, covering 99.38% of India’s exports by value, making it one of India’s most comprehensive trade agreements in the Gulf region. 

• Prior to the CEPA, only about 15.33% of India’s exports entered Oman duty-free under the MFN regime. All tariff concessions under the agreement take effect immediately. 

• Major beneficiaries include gems & jewellery, textiles, marine products, pharmaceuticals, engineering goods, processed foods, footwear, automobiles, and other labour-intensive sectors. 

2. Calibrated Liberalisation with Protection for Sensitive Sectors

• India has offered tariff liberalisation on 77.79% of tariff lines, covering 94.81% of imports from Oman by value, while maintaining safeguards for sensitive sectors. 

• Sensitive products such as dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices, and key agricultural commodities have been kept in the exclusion list. 

• The agreement also incorporates Tariff Rate Quotas (TRQs) and Minimum Import Price (MIP) mechanisms for selected products to protect the domestic industry, food security, and farmer interests.

3. Services and Professional Mobility Commitments

• Oman has offered market access commitments across 127 services sub-sectors, making it the most comprehensive services offer extended by any GCC country to India. 

• Key sectors include IT and computer services, professional services, healthcare, education, engineering, financial services, telecommunications, construction, tourism, and research & development services. 

• For the first time in a bilateral FTA, Oman has provided binding commitments for categories of professionals such as engineers, doctors, IT professionals, teachers, accountants, and consultants.

4. Trade Facilitation and Regulatory Cooperation

• Oman will accept certificates issued by India’s Export Inspection Council (EIC), reducing duplicative testing and inspections at Omani ports. 

• India’s NPOP organic certification and Halal certification systems have been recognised by Oman. 

• Dedicated chapters on Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT) seek to reduce non-tariff barriers, improve transparency, and strengthen regulatory cooperation.

5. Sector-Specific Export Opportunities

• All marine products, including shrimp, fish, and cuttlefish, now enjoy immediate duty-free access, benefiting major exporting states such as Andhra Pradesh, Kerala, Tamil Nadu, and Gujarat. 

• Import duties on gems and jewellery have been eliminated, providing Indian exporters a competitive advantage over suppliers from countries such as China, Thailand, Italy, and Turkey. 

6. Investment, MSMEs and Strategic Connectivity

• The CEPA establishes a structured framework for investment facilitation, enhancing regulatory certainty and improving the business environment for investors. 

• The agreement is expected to strengthen the competitiveness of MSMEs, startups, women entrepreneurs, and service providers by integrating them into GCC value chains. 

• Oman’s logistics hubs at Sohar, Duqm, and Salalah will provide Indian businesses improved access not only to Oman but also to wider GCC and East African markets, creating a strategic economic corridor connecting South Asia, the Gulf, and East Africa.

Significance of the Agreement

• Boosting India's Export Competitiveness: Immediate duty-free access on a vast majority of tariff lines will improve the price competitiveness of Indian products in the Omani market and provide an advantage over competing exporters. 

• Strengthening India's Gulf Outreach: Oman occupies a strategic location at the entrance of the Persian Gulf and serves as a gateway to the wider GCC, West Asian, and East African markets. The CEPA strengthens India's economic footprint in the region. 

• Supporting Diversification of Oman’s Economy: The agreement complements Oman’s efforts to diversify its economy beyond hydrocarbons by promoting manufacturing, logistics, services, and investment cooperation. 

• Deepening Strategic Partnership: Beyond trade, the CEPA reinforces India–Oman ties in areas such as logistics, connectivity, energy security, supply chains, and people-to-people exchanges.

India–Oman Relations

Political Relations

• India and Oman enjoy historically close ties dating back centuries, with formal diplomatic relations established in 1955 and elevated to a Strategic Partnership in 2008. 

• Oman is a key pillar of India’s West Asia Policy and an important partner in regional forums such as the GCC, Arab League, and Indian Ocean Rim Association (IORA). 

• Oman was invited as a Guest Country during India’s G20 Presidency (2023) and actively participated in over 150 G20-related meetings. 

Economic & Commercial Relations

• Oman is India’s second-largest trading partner in the Gulf region, while India is among Oman’s leading trade and investment partners. 

• Bilateral trade reached US$ 10.61 billion in FY 2024–25, reflecting strong economic engagement between the two countries. 

• More than 6,000 India–Oman joint ventures operate in Oman, with cumulative investments estimated at about US$ 7.5 billion. 

Defence Cooperation

• Oman is regarded as India’s closest defence partner in the Gulf region, and defence cooperation constitutes a major pillar of the strategic partnership. 

• Oman is the first Gulf country with which all three wings of the Indian Armed Forces conduct bilateral exercises. 

• The two countries cooperate closely on maritime security in the Indian Ocean Region (IOR) and maintain regular service-level staff talks. 

Cultural Cooperation

• India and Oman share deep civilisational and cultural ties rooted in over 5,000 years of people-to-people exchanges. 

• Cultural initiatives such as the “Mandvi to Muscat” lecture series have helped promote awareness of the historical links between the two countries. 

Diaspora Relations

• Oman hosts one of the largest Indian communities in the Gulf, with approximately 6.77 lakh Indians residing in the country as of 2025. 

• The Indian diaspora includes professionals such as doctors, engineers, teachers, chartered accountants, nurses, managers, and entrepreneurs, making a significant contribution to Oman’s economy and society. 

• Twenty-two Indian schools in Oman cater to the educational needs of more than 48,000 students.