New Delhi, June 2. India and Oman on June 1 operationalised their long-awaited Comprehensive Economic Partnership Agreement (CEPA), a landmark trade pact expected to significantly deepen bilateral economic ties, boost exports, enhance services trade and facilitate greater investment flows between the two countries.
The agreement, which entered into force on June 1 after both countries completed their respective internal procedures, was originally signed in Muscat on December 18, 2025, in the presence of Prime Minister Narendra Modi and Haitham bin Tarik Al Said.
The operationalisation ceremony was attended by Commerce and Industry Minister Piyush Goyal and Oman’s Ambassador to India, Issa Saleh Al Shibani. To mark the commencement of the agreement, the first consignments availing preferential tariff benefits – including agricultural products and gems and jewellery exports – from Mumbai, Kolkata and Chennai were flagged off.
The CEPA is being viewed as one of India’s most comprehensive trade agreements with a Gulf nation. It provides immediate duty-free access for 99.38 percent of India’s exports by value, covering 98.08 percent of Oman’s tariff lines. Before the agreement, only about 15 percent of Indian exports enjoyed duty-free access under the Most Favoured Nation regime.
Officials said the pact would strengthen India’s economic engagement with the Gulf region while providing Indian exporters a competitive advantage in Oman’s nearly $28-billion import market. Bilateral trade between the two countries rose to $11.18 billion in FY 2025-26 from $10.61 billion in the previous fiscal year, reflecting growing commercial engagement.
Describing the agreement as a “defining milestone”, Goyal said the CEPA aligns with Prime Minister Modi’s vision of creating trade partnerships that generate opportunities for farmers, fishermen, women, youth, entrepreneurs and micro, small and medium enterprises. He said the agreement would act as a force multiplier for India’s economic presence in the Gulf region by creating new opportunities for exporters and professionals while strengthening India’s integration into regional and global value chains.
Commerce Secretary Rajesh Agrawal said the pact comes at a time when global trade and supply chains are undergoing major shifts. According to him, the agreement establishes a framework for deeper integration across trade, services, logistics and investment, creating more resilient value chains and enhancing economic competitiveness for both countries.
The agreement contains broad commitments covering trade in goods and services, investment facilitation, professional mobility, regulatory cooperation and mechanisms to address non-tariff barriers. Officials described it as a framework that extends well beyond tariff reduction and lays the foundation for a long-term economic partnership.
Major gains for Indian exporters
Among the biggest beneficiaries are expected to be labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, marine products, engineering goods, processed foods and pharmaceuticals.
Indian marine products, including shrimp, fish and cuttlefish, will now enter Oman duty-free, replacing import duties of up to 5 percent. The government expects exports from coastal states such as Andhra Pradesh, Kerala, Tamil Nadu and Gujarat to expand significantly as Indian suppliers become more competitive in Gulf seafood markets.
The gems and jewellery sector is also expected to benefit substantially. Oman has eliminated import duties of up to 5 percent on gems and jewellery products from the first day of implementation. Government estimates suggest India’s exports in this segment could increase six-fold to nearly $150 million within three years, benefiting major manufacturing clusters in Surat, Jaipur, Mumbai, Kolkata and Chennai.
Agricultural and processed food exports are expected to receive a major boost as well. India already accounts for a significant share of Oman’s imports of products such as bovine meat and eggs. Duty-free access is expected to improve competitiveness for products including basmati rice, cashews, onions, potatoes, honey, butter and sweet biscuits, while enhancing opportunities for mango exports from India.
Boost for pharmaceuticals and manufacturing
The CEPA provides guaranteed zero-duty access for Indian medicines, vaccines and pharmaceutical ingredients. It also introduces regulatory facilitation measures under which products approved by leading international regulators such as the USFDA and European Medicines Agency can receive marketing authorisation in Oman within a defined timeline, reducing compliance burdens and speeding up market entry.
In the manufacturing sector, all engineering products, including machinery, automobiles, electrical equipment, iron and steel products, will receive duty-free access. Indian electronics manufacturers are also expected to gain from full tariff certainty across all electronics categories, helping them compete more effectively in the Omani market.
Engineering exports to Oman, which stood at nearly $876 million in FY 2025-26, are projected to rise substantially by the end of the decade as infrastructure and industrial demand in the Gulf region continues to expand.
Expanded services market access
The agreement also contains what the government described as Oman’s most ambitious services market access commitments to India. Oman has opened 127 services sub-sectors, including information technology, engineering, healthcare, education, financial services, construction, telecommunications and tourism.
For the first time in a bilateral free trade agreement, Oman has provided binding commitments for specific categories of professionals, including accountants, engineers, doctors, IT specialists, educators and construction professionals.
The pact introduces clearer mobility provisions for Indian professionals. Business visitors will be able to stay in Oman for up to 90 days, independent professionals for up to 180 days, and intra-corporate transferees for as long as four years. The agreement also provides for future negotiations on a social security arrangement aimed at avoiding dual social security contributions and ensuring continuity of benefits.
Protecting sensitive sectors
While granting significant market access to Oman, India has retained safeguards for sensitive sectors. Products such as dairy items, cereals, fruits, vegetables, edible oils, oilseeds, spices, rubber and certain agricultural products have been excluded from tariff concessions.
The agreement also incorporates tariff-rate quotas and minimum import price mechanisms for selected industrial and agricultural products to protect domestic industry, food security and rural livelihoods.
Strategic gateway to the Gulf
Government officials said the CEPA is strategically important because Oman serves as a gateway to the wider Gulf Cooperation Council market and East Africa through its ports at Sohar, Duqm and Salalah. Enhanced access to these logistics hubs is expected to help Indian exporters expand their regional footprint and strengthen participation in global supply chains.
With the agreement now in force, India expects bilateral trade, investment and services exchanges with Oman to accelerate significantly, reinforcing New Delhi’s broader strategy of building diversified and resilient economic partnerships as part of its vision for a developed India by 2047.
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