Agreement Eliminates Duties on Most Indian Exports to Oman and Strengthens Strategic Trade Connectivity
The Comprehensive Economic Partnership Agreement (CEPA) between India and Oman, signed by Prime Minister Narendra Modi and Sultan Haitham bin Tariq on December 18, 2025, officially came into effect on June 1, 2026.
Under the agreement, 99.38% of India’s exports by value, covering 98.08% of Oman’s tariff lines, will receive immediate zero-duty access. Prior to the agreement, only 15.33% of Indian exports enjoyed duty-free treatment under the Most Favoured Nation category.
The sectors expected to benefit include textiles, leather, footwear, gems and jewellery, plastics, marine products, engineering goods, pharmaceuticals, medical devices, automobiles, sports goods, and agricultural and processed food products.
Tariff Concessions and Sensitive Product Protection
India has offered tariff concessions on 77.79% of tariff lines, covering 94.81% of imports from Oman by value.
Certain products, including dates, marble and petrochemicals, will be liberalized under a Tariff Rate Quota mechanism. The agreement provides zero duty on imports of up to 2,000 tonnes of Omani dates annually.
Several sensitive sectors remain outside the scope of tariff concessions, including gold and silver bullion, jewellery, dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber and spices, with the objective of protecting domestic industries.
Bilateral Trade and Strategic Importance
Bilateral trade between India and Oman increased from $10.61 billion to $11.18 billion during FY 2025-26.
India’s exports stood at $4.02 billion, while imports from Oman reached $7.16 billion. Oman remains India’s second-largest trading partner in the Gulf region.
The agreement is expected to strengthen India’s access to the Gulf Cooperation Council (GCC) market and East Africa through the ports of Sohar, Duqm and Salalah.
Oman’s geographic position outside the Strait of Hormuz has also added to its strategic significance. According to the article, trade from Oman increased by 246% during periods when the Strait of Hormuz faced disruptions, highlighting its role as an alternative trade and energy gateway during geopolitical uncertainties.
Expected Impact on Exports and Employment
The agreement is expected to increase Indian exports by $2–3 billion over the next two years.
The anticipated growth is expected to support MSMEs and labour-intensive sectors, including textiles, women artisans, agriculture and fisheries.
The CEPA is also expected to provide Indian exporters with an additional avenue for market diversification amid ongoing tariff-related challenges affecting global trade.
Concerns Over Market Size and Rules of Origin
The article notes concerns regarding the relatively small size of Oman’s domestic market, with a population of approximately 5 million and a GDP of $115 billion.
Industry stakeholders have also raised concerns about the possibility of Chinese goods being routed through Oman to access preferential tariff benefits. The article emphasizes the importance of implementing strict Rules of Origin (RoO), particularly for sensitive products.
Beyond a Traditional Free Trade Agreement
According to the article, the India-Oman CEPA extends beyond a conventional Free Trade Agreement (FTA).
In addition to trade in goods, the agreement covers services, investment, intellectual property rights (IPR), customs cooperation, dispute settlement mechanisms and professional mobility.
The CEPA is India’s fifth major trade agreement since 2014, following agreements with Mauritius, the UAE, Australia and the European Free Trade Association (EFTA).
