New Delhi: In a significant development, the Comprehensive Economic Partnership Agreement (CEPA) between India and Oman is set to come into force on June 1. Experts are of the opinion that it will mark a significant milestone in bilateral economic relations. The two countries will formally announce the decision on Monday. Indian goods and services will gain greater access to the Omani market, with the implementation of the agreement. This will further strengthen the trade and economic ties between the two nations.
It is important to note that this will be the fifth Free Trade Agreement (FTA) implemented during Prime Minister Narendra Modi’s tenure. To recall, India had earlier operationalized similar agreements with Mauritius, the United Arab Emirates (UAE), Australia, and the European Free Trade Association (EFTA). In addition, India has signed trade agreements with the United Kingdom and New Zealand.
CEPA vs FTA
Notably, the modern trade agreements generally consist of around 20 chapters covering comprehensive rules related to trade in goods, trade in services, investment, intellectual property rights, customs procedures, and dispute settlement mechanisms.
Similar bilateral frameworks are also known as Comprehensive Economic Cooperation Agreements (CECA), Comprehensive Economic Trade Agreements (CETA), or Economic Cooperation and Trade Agreements (ECTA).
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India-Oman Trade Relations
- Bilateral trade between India and Oman stood at $11.18 billion in FY 2025-26.
- This was higher than $10.61 billion recorded in FY 2024-25.
- During the period, India’s exports to Oman were $4.02 billion, while imports stood at $7.16 billion.
How Will India Benefit?
India will receive 100 percent duty-free access on 98.08 percent of tariff lines in the Omani market under the agreement. These tariff lines account for 99.38 percent of the total trade value. This is expected to enhance the competitiveness of Indian products and provide a major boost to exports.
Exports of apparel, agricultural products, processed food items, gems and jewellery, transport equipment, and precision instruments are expected to witness significant growth. Iron ore and steel, electrical machinery, marine products, industrial machinery, and copper products will also benefit from zero-duty access.
A Key Highlight of the Agreement
It is important to note under the agreement, Indian medicines and vaccines will receive duty-free access to the Omani market. This is expected to provide a major boost to India’s pharmaceutical industry.
The agreement is also likely to benefit India’s automobile sector, as the existing 5% import duty on vehicles will be eliminated.
Major Boost for the Services Sector
The agreement is expected to deepen cooperation in the services sector as well. India’s services exports to Oman increased from USD 397 million in 2020 to USD 665 million in 2024. Telecommunications, information technology, transportation, and tourism have been the key contributors to this growth.
Sensitive Sectors Kept Out
To protect domestic industries and farmers, India has placed 2,789 tariff lines on its “exclusion list,” meaning these products will remain outside the scope of tariff concessions under the agreement.
India’s Influence in the Middle East Set to Grow
- India is steadily strengthening its presence in the Middle East.
- The Oman CEPA serves as another key pillar in India’s expanding trade engagement with the Gulf Cooperation Council (GCC).
- New Delhi is also set to begin trade negotiations with Qatar in the near future.
- India has already signed the Terms of Reference (ToR) to initiate talks on a broader trade agreement with the GCC bloc, which includes Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain.
- The proposed agreement is expected to further deepen economic cooperation and enhance trade ties between India and the Gulf region.
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