India–Oman CEPA marks a confident turn in India’s trade strategy

After a long period of reticence over foreign trade and providing high protection to domestic manufacturing, India is opening up. This is evident from the sheer number of trade pacts it has signed, or is discussing, with major economies. The Comprehensive Economic Partnership Agreement (CEPA) with Oman is indeed, as India said, “a significant step in building a stronger economic partnership.” This is also the second agreement in the last six months, after one with the United Kingdom.

The recent agreement was signed on Thursday by Commerce & Industry Minister Piyush Goyal and Oman’s Minister of Commerce, Industry & Investment Promotion Qais bin Mohammed Al Yousef. This was the most significant outcome of Prime Minister Narendra Modi’s visit to Oman.

India regards the CEPA as an important milestone in India’s engagement with the Gulf region, as Oman “is an important strategic partner in the region and is a key gateway for Indian goods and services to the wider Middle East and Africa.” This optimism is not groundless, because the existing Indo-Omani ties are quite wide and deep.

There are around 7 lakh Indian nationals living in the Gulf nation, including Indian merchant families with a presence of over 200-300 years. More than 6,000 Indian enterprises already operate in Oman across sectors. Annual remittances from Oman are in the region of $2 billion. The bilateral trade is over $10 billion, which is expected to get a big impetus under the CEPA framework.

The CEPA offers stupendous tariff concessions for Indian businesses, as Oman has agreed to allow zero-duty access on 98.08 per cent of its tariff lines, which cover 99.38 per cent of India’s exports. This means that all major labour-intensive sectors like gems & jewellery, textiles, leather, footwear, sports goods, plastics, furniture, farm products, engineering products, pharmaceuticals, medical devices, and automobiles will be exempted from tariff. Most tariff elimination becomes effective immediately.

At the same time, India has been able to shield sensitive products like agricultural products, including dairy, tea, coffee, rubber and tobacco products, gold and silver bullion, jewellery, footwear and sports goods, and scrap of many base metals.

India hopes that its services sector can gain hugely from the CEPA, as our contribution to Oman’s services imports, which is worth $12.52 billion, is just 5.31 per cent.

From India’s perspective, the issue now is tapping into the export potential that is in Oman. The institutional mechanism is in place with CEPA. Political relations between the two nations are good, as evident from Prime Minister Modi receiving the Order of Oman, the Sultanate’s uniquely distinct civilian honour, from Sultan Haitham bin Tarik. Now, the economic policy framework at home has to ensure that the opportunities available are grabbed.

Proper domestic follow-through is the need of the hour. Indian exporters, especially small and medium enterprises, must be made aware of the opportunities created by the agreement and supported in meeting standards, logistics requirements, and market intelligence needs. Trade facilitation, access to credit, and timely resolution of regulatory bottlenecks will be crucial. Without such support, even the most generous tariff concessions can remain underutilised.

The India-Oman CEPA thus is a signal of India’s renewed willingness to integrate with global markets on its own terms—confident, pragmatic, and selective. If leveraged effectively, it can strengthen India’s economic presence in the Gulf and beyond.