India and Oman have formalised a comprehensive economic partnership agreement (CEPA) aimed at deepening economic integration and expanding bilateral trade.
The partnership was formalised during Indian Prime Minister Narendra Modi’s visit to Oman.
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This agreement was signed by India’s Commerce and Industry Minister, Shri Piyush Goyal, and Oman’s Minister of Commerce, Industry & Investment Promotion, Qais bin Mohammed Al Yousef.
The agreement is expected to boost trade, expand exports, create employment and reinforce supply chains. This is the first bilateral agreement Oman has signed with any country since its agreement with the US in 2006.
The CEPA secures significant tariff concessions for India. Oman will provide zero-duty access on 98.08% of its tariff lines, which will cover 99.38% of India’s exports to the country.
Key labour-intensive sectors such as agricultural products, automobiles, engineering goods, footwear, furniture, gems and jewellery, leather, medical devices, pharmaceuticals, plastics, sports good and textiles will benefit from full tariff elimination.
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By GlobalDataImmediate elimination will apply to 97.96% of these lines.
India said that it will offer tariff liberalisation on 77.79% of its tariff lines, covering 94.81% of its imports from Oman by value.
For products of export interest to Oman that are considered sensitive to India, tariff liberalisation will mostly be based on tariff-rate quotas.
Sensitive items including agricultural products like coffee, dairy, gold and silver bullion, jewellery, certain labour-intensive products, rubber, scrap of many base metals, tea and tobacco have been excluded from concessions to protect domestic interests.
Oman is a strategic partner of India and acts as a gateway for Indian goods and services to the Middle East and Africa.
More than 6,000 Indian enterprises operate in Oman across various sectors, and annual remittances from Oman to India are around $2bn (OR769.73m), indicating strong economic links. Bilateral trade between the nations currently exceeds $10bn, with further growth anticipated under the CEPA.
This agreement is the second free trade pact signed by India in the past six months, following a deal with the UK.
It forms part of India’s strategy to secure trade agreements with economies that complement its labour-intensive sectors and offer new opportunities for businesses in India.
The agreement also addresses the services sector, a key driver of India’s economy.
Oman’s global services imports are valued at $12.52bn, with Indian exports accounting for 5.31% of this.
The CEPA includes a comprehensive services package, with Oman making significant commitments in sectors such as audio-visual, business and professional services, computer-related services, education, health services, and research and development.
The agreement also features an enhanced mobility framework for Indian professionals. Oman has increased the quota for intra-corporate transferees from 20% to 50% and extended the permitted stay for contractual service suppliers from 90 days to two years, with a possible further two-year extension.
The CEPA is said to offer “more liberal entry and stay conditions for skilled professionals” in sectors such as taxation, accountancy, architecture and medical services.
It also allows for 100% foreign direct investment by Indian companies in Oman’s major services sectors, enabling Indian operators to expand their operations in the region.
Both nations have agreed to future discussions on social security coordination once Oman’s contributory social security system is operational, supporting labour mobility and worker protection.
The CEPA also includes provisions to address non-tariff barriers that may limit real market access, despite tariff concessions.
Shri Piyush Goyal said: “The India-Oman CEPA strengthens the historical strong ties of India with Oman and signifies an ambitious and balanced economic framework that significantly enhances opportunities for Indian exporters and professionals.”
