India–Oman CEPA Explained: Who Gains, Who Is Protected, and What Exporters Must Do Next
- Dhriti Mukherjee Pipil
- Dec 19, 2025
- 4 min read
The signing of the India–Oman Comprehensive Economic Partnership Agreement (CEPA) marks an important step in India’s evolving trade strategy in the Gulf region. Announced as India’s second major free trade agreement in six months after the India–UK deal, the CEPA has been positioned as a growth catalyst for Indian exports, labour-intensive industries, MSMEs and services trade.
However, trade agreements do not automatically translate into export success. To understand what the India–Oman CEPA truly offers—and its limitations—it is essential to move beyond headline tariff cuts and examine who gains, who is protected, and what Indian exporters must do next.
What Is the India–Oman CEPA?
The India–Oman CEPA is a bilateral free trade agreement aimed at reducing tariffs, improving market access, and strengthening economic cooperation across goods, services and investment.
Under the agreement:
Indian exporters receive zero-duty access on over 98% of Oman’s tariff lines
These tariff lines cover 99.38% of India’s exports to Oman by value
India offers tariff liberalisation on 77.79% of its tariff lines, covering 94.81% of imports from Oman
This asymmetric liberalisation reflects India’s calibrated approach—opening markets for exports while shielding sensitive domestic sectors.
Why Oman Matters in India’s Trade Strategy
Oman is India’s third-largest trading partner in the Gulf, after the UAE and Saudi Arabia. In FY25, bilateral trade stood at USD 10.6 billion, with Indian exports valued at USD 4.1 billion.
More importantly, Oman plays a strategic role as:
A gateway to the GCC market
A logistics and energy hub linking West Asia, Africa and Central Asia
A relatively stable, rules-based economy with demand for Indian goods and services
The CEPA therefore has both commercial and strategic significance, even though Oman is a small market in absolute terms.
Who Gains from the India–Oman CEPA? (Sector-Wise Analysis)
Labour-Intensive Export Sectors
The agreement is explicitly designed to support employment-generating industries, including:
Textiles and apparel
Gems and jewellery
Leather and footwear
Sports goods
Furniture and plastics
Full tariff elimination in these sectors improves price competitiveness for Indian exporters, particularly MSMEs and artisan-based enterprises.
Engineering Goods, Pharmaceuticals and Medical Devices
Indian exports of:
Engineering products
Pharmaceuticals
Medical devices
stands to benefit from lower landed costs in Oman. However, exporters will still need to meet quality standards, certification norms and buyer expectations, which tariffs alone cannot solve.
Services Trade and Professional Mobility
One of the most under-reported aspects of the India–Oman CEPA is its services chapter.
Key gains include:
100% FDI access for Indian firms in Oman
Easier entry for IT, business, professional, R&D, education and healthcare services
Extended stay for contractual service suppliers—from 90 days to two years, with the option of a further two-year extension
Improved quotas for intra-corporate transferees
Specialised access has also been created for AYUSH and wellness services, a first in India’s FTAs.
Who Is Protected Under the India–Oman CEPA?
India has strategically excluded several sensitive sectors from tariff concessions, including:
Agricultural products such as dairy, tea, coffee, rubber and tobacco
Gold and silver bullion and jewellery
Certain labour-intensive products like footwear and sports goods
Scrap of base metals
For select products of interest to Oman, India has offered tariff-rate quota (TRQ)–based liberalisation, ensuring controlled market access rather than full openness.
This reflects India’s attempt to balance export ambition with domestic economic stability.
Will Zero Tariffs Automatically Boost Indian Exports?
Not necessarily.
According to trade research, over 80% of Indian goods already enter Oman at an average tariff of around 5%, though duties can rise sharply for specific products such as alcohol, tobacco and certain meats.
While tariff elimination improves competitiveness, sustained export growth will depend on:
Product quality and compliance
Branding and differentiation
Supply reliability and logistics efficiency
Understanding Oman’s limited but specialised demand
In a relatively small market like Oman, export growth will be incremental—not explosive.
What Indian Exporters Must Do Next
1. Move Beyond Tariff Arithmetic
Exporters must understand:
Rules of origin
Product-specific exclusions
Standards, labelling and conformity requirements
Tariff benefits are usable only when compliance capacity exists.
2. Focus on Value Addition, Not Just Price
Competing purely on price is unsustainable. Indian firms must invest in:
Quality upgrades
Packaging and branding
Product adaptation for Gulf consumers
3. Use Oman Strategically, Not in Isolation
Oman should be viewed as:
A testing market
A regional logistics base
A stepping stone to the broader GCC and African markets
4. Services Firms Should Act Early
Indian service providers—especially in IT, healthcare, education and wellness—should explore:
Local partnerships
Investment opportunities under 100% FDI
Long-term establishment rather than short-term contracts
What the India–Oman CEPA Ultimately Signals
The India–Oman CEPA reflects a broader shift in India’s trade policy:
Away from defensive protectionism
Toward selective, employment-oriented openness
With strong safeguards for sensitive sectors
Yet, trade agreements do not substitute for export capability building. They only create the framework. Outcomes depend on how well firms, MSMEs and professionals can translate access into actual trade.
Conclusion: From Agreement to Capability
The India–Oman CEPA is a meaningful opportunity—but not a guarantee. It rewards preparedness, not presence. Exporters who understand the agreement, invest in capability and align with market realities will benefit. Those who rely solely on tariff cuts will not.
Understanding trade agreements beyond headlines is no longer optional—it is essential.
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